Every time Google releases a new version of Android, the platform’s monetization rates improve, reports Tapjoy. According to the company’s latest insights report, the Jelly Bean version of the Android operating system generates $1.63 in average revenue per user (ARPU).
During the month of September, Tapjoy analyzed Android conversion and monetization rates, and found that with the exception of the tablet specific Honeycomb OS, every new version of the Android operating system generated higher ARPU than its predecessor.
For example, Android users with lower end or older devices running outdated versions of the OS don’t monetize very well — Tapjoy reports users still running Eclair 2.1 (released in Jan. 2010) only generate $0.86 in ARPU, but users running the newest versions of Android will monetize at almost twice that rate.
The findings are good news for Android developers, but they also underscore how Android’s fragmentation issues are holding back the monetization potential of the platform.
While Gingerbread may be the most popular version of the Android OS according to Google’s developer dashboard, those users only generate $1.20 in ARPU — 35 percent lower than the $1.63 generated by the 1.8 percent of Android users running Jelly Bean devices.
In June, Google introduced an Android Platform Developers Kit (PDK) in order to address fragmentation issues on the platform by letting OEMs have earlier access to new versions of the Android OS, starting with Jelly Bean. While the move doesn’t seem to have done much to improve new OS adoption speed, the number of users running older versions of Android has has dropped significantly since the summer.
The current Android platform distribution statistics.
Android platform distribution as it looked on June 1, 2012.
In June, 19.1 percent of all Android users were running Froyo, a figure that has since declined to 12.9 percent. Gingerbread has also declined, dropping from 65 percent of all Android devices to its current 55.8 percent share. Ice Cream Sandwich has seen the biggest increase since June, growing from just 7.1 percent of all users to 23.7 percent today. According to Tapjoy, Ice Cream Sandwich users generate an ARPU of $1.19, almost identical to Gingerbread.
Today’s news means that while Android is still fragmented, the older, lower monetizing versions of the OS are seeing their market share decline fairly quickly — a factor that helps explain the significant increases developers have seen in their Google Play revenues and conversions.