Coders get 70 percent of Android Market revenue

Google officially opened its Android Market Wednesday and promised that beginning next year, programmers will get the lion's share of revenue from applications sold on the download site for the company's mobile phone operating system.

The first incarnation of the Android Market has more than 50 applications available for download, but they're all free. Google said the site will be able to distribute paid applications early in the first quarter of 2009.

More applications are on the way, and programmers will be able to add their own starting Monday in a process that reflects a much more hands-off approach than Apple has taken with its App Store for iPhone software. Programmers need to pay a $25 registration fee.

"On Monday, to share your app with the world, simply register, upload your application and publish it. It's really that easy," said Eric Chu of the Android mobile platform team on Google's Android developers blog Wednesday.

These screen shots show the Android phone interface to the Android Market. The software shows what applications can be downloaded and reviews of applications that people are browsing.

(Credit: Google)

The first Android-powered phone, the T-Mobile G1 built by HTC, is now for sale, and despite a pre-order option for T-Mobile customers, a few dozen lined up to buy one on Tuesday night in San Francisco. In addition, Google started promoting the G1 on its highly trafficked search page.

Apple gives its programmers 70 percent, too, and Research in Motion offers Blackberry programmers 80 percent.

One difference the mobile phone industry might well find appealing: Apple keeps the remaining revenue, but Google gives it to wireless service carriers, minus billing settlement fees. (Update: It's not yet clear exactly how RIM divvies up the leftovers.)

"Google does not take a percentage. We believe this revenue model creates a fair and positive experience for users, developers, and carriers," Chu said.

Update 12:09 p.m. PDT:: Android phones have a built-in Android Market application. Those without a phone will be able to browse available applications at the Android Market site.

Wooing programmers
Google's considerable clout with developers could be key to helping Android rise from an open-source operating system used on only a tiny fraction of the world's mobile phones into a force to be reckoned with. The company already has given developers millions of dollars in prize money, and another Android programming contest is coming.

One person happy with Android is Buzzd Chief Technology Officer and co-founder Deepen Shah, whose company supplied one of the initial Android Market applications, ad-supported software to find out what's going on at local bars, museums, and other venues. Google's Android software developer kit (SDK) is good, Android applications are easier to write than iPhone apps, and Google makes its programmers available, Shah said.

"We have direct access to a lot of the developers who work with platform" at hackathons and other events, Shah said. That means programmers can build relationships, unlike with Apple: "They threw the SDK out there in hopes developers would latch on to the Apple brand name."

Apple sold an impressive 6.9 million iPhones in the third quarter, showing strong demand for a high-powered Internet-connected device with a rich set of applications. Programmers care deeply about releasing applications on a system that's actually in widespread use, and the iPhone currently has the most alluring combination of adoption and computing power.

Despite competing offerings, Apple and Google are allies in another way. Both are advancing a rebalancing of power that emphasizes independent mobile application download sites, bypassing mobile service operators' gatekeeping.

Democracy in action?
Google and Apple see things differently. Apple is willing to do more hand-holding as part of its attempt to make things easier on its users, but Google is aiming for a more adaptable, free-wheeling, and self-governing system.

"Our vision is there's not gatekeepers," and Google doesn't have an editorial function, said Rich Miner, manager of Google's mobile platforms group. "There's no human looking at the apps to see what they're doing."

That approach has a lot of appeal for Buzzd Chief Executive and co-founder Nihal Mehta. The company submitted its iPhone application three months ago, but it only now arrived on the App Store, he said.

"There's a long queue," Mehta said of Apple's App Store. "The Android process is a lot more democratic. They're basically telling anybody that you can go apply and your app will be in there."

Google wants the Android Market to be like YouTube, with a search function to let people find what they want and user ratings helping to bring the best to the forefront. Making the market wide open will "enable that long tail to happen," Miner said. In other words, there will be room not just for mainstream applications but also for niche products that may only appeal to a narrow segment of users.

User ratings aren't the only factor in how applications are ranked and presented at the Android Market. "Anonymous usage statistics" also are included, Chu added on the blog.

That's not to say there's no oversight at all. Applications that violate Google's terms of service, for example by not warning users during installation time what services such as GPS tracking an application uses, can be removed from the Android Market and even from the phones themselves. And users will help flag software in a grayer area.

"Apps that are harmful aren't going to be rated five stars. They'll quickly be bubbled to the bottom or be yanked off the platform," he said. "These things have helped the carriers feel more comfortable" with Google's self-managing system.

Screening applications can help protect users, but Miner said Android has strong security. For example, the file system "is write-locked so nobody can get access to it," and one application can't get access to another's data.

[Penguinisto]

Only question is: How much advertising will get jammed in there?

[Shankland]

From my testing so far, the only ads I've seen are on Web sites, which is hardly a situation unique to the T-Mobile G1. I haven't used many third-party applications; whether they rely on ad models (as Buzzd does) is also an Android-agnostic issue as I see it, except that perhaps with more advanced browsers and bigger screens such those on the G1 or the iPhone's, ads are more feasible to deliver.

[Malenx]

They don't need to advertise on they phones, and they probably never will. The more people go online, the more google will make in advertising of all their other products. That's how they make cash.

You feed a groups desire to surf and you pocket cash in other areas that they visit.

The phones themselves have no advertising and the OS has no way of forcing it on you. Google stands to profit a ton from opening doors and allowing people to do what they want and how they want.

[t8]

Oh no.
Microsoft is screwed.

[stigmattaman]

@Malenx - Completely disagree. Sure, your dialer's not going to have contextual ads based on your calls, but getting ads on the mobile web is still ads on your phone. Google maps already has some ads on the desktop and don't be surprised if that creeps onto the handset, as well as the mobile Google maps.
If its only about letting people surf, there would be no need to develop an OS, as people are going online any way.

[wireless3]

This is a great opportunity for coders to earn money. I think Android market is a good project of Google. This will be an encouragement for coders and allow more programmers to work from some platform. I think there will be more number applications related to <a href="http://www.mywirelessnetwork.mywirelessrep.com/">wireless services</a> we will find in this.

[technewsjunkie]

I thought Open Source was freely sharing code, without payment. The antithesis of commercial software.
How is this reconciled?

[brian.lee]

If they don't blacklist useful apps like Remote Desktop and Net Share at the Android app store, they might be able to beat Apple. I'm hoping Android gives iPhone and a run for it's money perhaps even a wakup call to Jobs and Co.