Apps With In-App Billing Represent 14% of Daily Revenue Earned Through Android Market

Apps with in-app billing are making 14 percent of the overall average daily revenue in Android Market, Google’s group manager for the platform Eric Chu said today.

This figure really shouldn’t be terribly surprising given the many issues developers have been finding with convincing Android users to pay for apps on the platform. In-app billing launched to consumers at the end of the first quarter six weeks ago and it appears to be powering just under 400 apps so far, according to app tracking site AndroidBrain.

In-app billing promises to be an important source of revenue for developers. On iOS, free apps now make up 14 of the 25 top-grossing apps in the U.S. today, reflecting a strong industry shift away from paid apps. On Android, it may be even more important given the considerable piracy issues developers are facing on the platform.

Overall, Chu said revenue in Android Market is ramping up quickly with a threefold increase in the U.S. over last year. Smaller markets like the Japan have seen a 100-fold increase, while revenue earned through Android Market jumped by eightfold in the U.K.

 

Chu added that direct carrier billing was helping increase conversion rates — especially in Asia. Android users have the choice of paying with their credit cards or sending their purchases directly to their phone bills. Android Market currently has partnerships with three major carriers in the U.S. including AT&T, Sprint and T-Mobile. While the company hasn’t said anything, we would expect to see a deal with Verizon at some point.

Direct carrier billing is important to the platform, since Google doesn’t have the more than 200 million iTunes accounts (and credit card details) that Apple has. This creates friction in the payment process since users have to fill out a lengthy form the first time they want to make a purchase in the store.

 

The number of users either buying apps or making in-app purchases has also jumped by a factor of 6.5 year over year.

 

All of this makes for a very promising picture for the platform. That said, developers are still telling us that they’re only seeing a fraction of the revenue on Android that they can get on iOS. Glu Mobile said in a recent earnings call that its Android portfolio of apps makes one-eighth to one-tenth of what its iOS presence does, for example.