While Google has claimed that it activates a whopping 850,000 Android based devices everyday, the revenues it generates from Android seems to be less than one fourth of the revenues it generates from iOS devices.
Yup, you heard that right, ironically Google generates lot more revenue from iOS than Android.
This was revealed when Google made a pre-settlement offer to Oracle ahead of the expected patent and copyright infringement trial on April 16th for infringing Java related patents.
Google has offered to pay a percentage of Android revenues, which works out to $2.8 million in damages for the two patents for the period up to 2011, and then 0.5% of ongoing Android revenue on one patent which expires this December, and 0.015% on another which expires in April 2018.
The Guardian explains:
The $2.8m offer, at a combined rate of 0.515%, suggests that Android’s total revenue from the launch of handsets at the end of 2008 through to the end of 2011 was $543m. [..]
[..] Larry Page, Google’s chief executive, said during an earnings call in October that Google was “seeing a huge positive revenue impact from mobile, which has grown 2.5 times in the last 12 months to a run rate of over $2.5bn.”
But while some people interpreted that to indicate Android revenue, it overlooked Google’s deal with Apple, in place since the introduction of the iPhone in 2007, through which it provides maps and the default search engine for its iPhone, iPad and iPod Touch products, which run Apple’s iOS software. [..]
[..] The figures also suggest that Apple devices such as the iPhone, which use products such as its Maps as well as Google Search in its Safari browser, generated more than four times as much revenue for Google as its own handsets in the same period.
In comparison, just in the fourth quarter of 2011, Apple’s revenue grew to $46.33 billion (63% more than the previous quarter, and up 79% YoY) and its net profit to $13.06 billion (up 97% from Q3 and 117% YoY). As you can see from the chart below, since 70% of Apple revenues comes from iOS devices, it means Apple generated approximately $32.5 billion in revenues in just one quarter compared to Google’s $543 million from 2008 to end of 2011.
Image credit: Ars Technica
So despite an explosion of Android-based devices, Apple has managed to be extremely profitable thanks to its strategy of building the entire product, which includes hardware and software. Google seems to have endorsed Apple’s strategy by buying Motorola.
Google should also be worried as Apple is actively looking at ways to reduce its dependence on Google. We’ve recently heard rumors that Apple plans to add Baidu search to iOS devices next month for users in China and also has used OpenStreetMap’s data in the iPhoto app instead of Google Maps.