At our Inside Social Apps conference on Tuesday, we sat down with Eric Chu, the Group Manager of the Google’s Android Platform, who shared a little bit about the platform’s direction this year.
While Android poised to become a platform of equal or even higher priority for developers than Apple’s iOS, it isn’t as lucrative because of poor payments infrastructure. It’s also difficult to grapple with fragmentation, a consequence of Android’s relatively open approach with multiple handset makers, carriers and now even app stores.
Here are the main takeaways:
In-App Payments Coming This Quarter Despite Delays
They’re coming this quarter, even though several partners have told us they were promised a solution in November, and then December. Chu said that there was a delay with in-app payments because developers were too busy building Christmas applications to give feedback on the product. Google wants to “make sure there’s a consistent purchasing and payment experience for apps in the Android Market.” Since developers have such freedom and aren’t reviewed, third-party in-app payment systems aren’t always of high-quality
Android is asking developers to wait for its official in-apps payments solution in the Android Marketplace, although they can use other payment methods if they’re being distributed through other marketplaces.
Carrier Billing Set to Be a Major Prong of Android’s Payments Strategy Globally
Google has got two of four carriers, with T-Mobile and AT&T, but is waiting on the other major American mobile operators. Chu said the company is pursuing this strategy globally, seeking carrier billing with hundreds of operators throughout the world. The carrier billing strategy means that unlike Apple, Google will probably not derive much, if any, revenue from app purchases, since that share will go to the carriers instead. (To be fair, compared to overall sales of hardware, Apple doesn’t make much from app store purchases either.)
There Will Probably Never Be an Upfront Requirement to Submit Credit Cards, Unlike iOS
Chu said Google will probably stick to its policy of not requiring users to submit their credit card information when they activate their phones. One of the advantages Apple has is that it forces its users to send in their credit card information when they first get their phones — meaning it has millions of credit cards on file and users never have to go through a lengthy payments flow when they want to buy an app. They get the instant gratification of having a paid app the first time they try to buy anything in iTunes. Android doesn’t make you use your credit card information until you want to buy something, a huge reason why users drop off when they’re prompted to buy apps. We reported some hard estimates on this phenomenon two days ago, showing that 98.4 percent of all downloads on Android are free.
More Active Human Policing of Apps That Violate Policy
In a shift away from Google’s cultural preference for pure engineering solutions to spam, Android has started employing a human team that looks at apps that actively violate policy and take them down. For instance, this means that pornography apps that slip into the marketplace will disappear more quickly. Google is also investing in technology that allows for a more scalable way to police the marketplace.
Marketplace Ranking Algorithm Will Not Rely Purely on Downloads
Unlike iOS, Google’s ranking system for applications isn’t based just on downloads per hour. It includes how the app has been rated by users and other signals. This has been a source of consternation for some developers since it’s hard to tell whose apps are performing well financially or by downloads. Chu stressed that this approach will continue. Chu says Android will be tuning its ranking algorithm “so great apps get bubbled up quicker.” It will also be looking to utilize more lists to help users wade through the huge volume of apps.
Developers Will Have Some Kind of Access to NFC
But Google hasn’t decided how deep it will go.
Google’s Position on Alternative App Stores like Amazon’s is Still Somewhat Contradictory
Chu said he would like for there to be one great marketplace but at the same time he stressed that Android is open. He did not say anything disparaging about Amazon’s app store except to imply that competition might pressure Google to run a better app store, even if it creates more confusion for developers and consumers.
Chu Has a Distaste for CPI Networks
The CPI network — a model that lets gamers earn virtual currency by installing other apps to drive them up the rankings — has emerged over the past year as a significant way for developers to pay to acquire users. While Tapjoy is the largest network in the space, Flurry, W3i and Adknowledge are rising as alternative install networks. Chu seemed to dislike this model, saying it favored developers with lots of capital at the expense of other less capitalized ones.
“A developer with deep pockets could just buy a lot of ads to get to the top. So we try to use other signals to help us understand, do users actually like the app? We’re trying to fine-tune to make sure that great apps do well,” he said. He said it’s not clear that users who install apps for virtual currency actually find them valuable.