Android and iOS app revenue gap continues to shrink

Not too long ago it was pretty much common knowledge that developer revenues were higher with iOS than Android. Recently however, the revenue gap has been shrinking fast and, according to a new report from BI Intelligence, we’re now at a point where Android developers earn about 90 cents for every $1 earned by iOS developers.

So what has caused the gap to decrease? There are actually quite a few factors involved here. For starters, roughly 80% of smartphones are running on Android, and number of Android tablets is continually on the rise.

Google has also been working hard to resolve perceived fragmentation issues, with more than 50% of Android devices now running Jelly Bean. For handsets that are still rocking Android 4.0 ICS and Android 2.x, you’ll also find that most major apps still work without a hitch and that quite a few core Google apps are now updated via Google Play services — making the actual Android version less important than it once was.

These combined factors mean that there is a huge audience for Android apps, and that developers no longer have to worry about whether or not they are targeting the right Android version, as more than half of the Android user base has made the jump to Android 4.0 or higher.

Not surprisingly, the dominant revenue source for Android app developers is advertising. Part of the reason is that ad rates are still lower on Android than iOS, and because free ad-driven apps are very popular among many Android users. In contrast, developers will find that premium apps and in-app purchases are still more profitable on iOS.

So what does all of this mean for developers and end-users? For developers it means that creating apps for Android has become nearly as lucrative of a business as creating iOS apps. For end-users, more revenue for developers will hopefully translate into more app makers creating high-quality Play Store apps.

Android and Google Play have both come a long way in a short amount of time. Now all we need is to see even more developers fully embrace tablet-optimized apps — luckily Google has already started making changes that should help things along.

To get an even deeper look at how iOS and Android revenue differs, be sure to check out the charts and additional report details from Business Insider.