Earlier this week a report from The Guardian stated that Google was making four times as much money off of advertising from iPhone, iPad and iPod ads than it was on the entire Android platform. Android Community elected not to run the story, because frankly, we had doubts about the author’s methods of calculation based on a proposed settlement in the Oracle lawsuit. It appears that we weren’t the only ones: Business Insider reports that a source close to Google has invalidated the claim, saying that the Guardian misunderstood the value and intention of the settlement.
It goes something like this: Google offered to settle the lawsuit with Oracle (now over a year in the making) for $2.8 million US dollars. Charles Arthur of the Guardian reckoned that this figure was a percentage of the total profits of Android, which he gave at .515% – about one two-hundredth of the total. Extrapolating from there, he figured that Android had made Google only $550 million dollars since its introduction in 2008. Getting numbers from Google’s total advertising revenue, he compared it to Google’s ad sales for the iOS platform in the same time period, totaling about $2 billion. (Just for instance, Oracle’s previous assessment that Google makes $10 million a day off of Android would have made it nearly a billion this year alone.)
But Arthur made a mistake that every grade school teacher will call you on: he didn’t show his work. A source “close to Google” told Business Insider that the 2.8 million dollar settlement (which has not been accepted) wasn’t reached by any sort of calculation based on Android profits. Instead it was what Google valued Oracle’s relevant patents at. A little critical thinking goes a long way: with the Android userbase roughly double that of iOS on smartphones and gaining in tablets, not to mention Google’s 30% cut of paid apps in the Android Market/Google Play Store, the original conclusion seems somewhat off base.
Of course, Google isn’t bringing in nearly as much revenue on Android as Apple is on iOS, because it manufactures no hardware and gives its operating system away for free. Google doesn’t mind – it made almost 40 billion in ad revenue last year.
I don’t believe that Google is making ten million dollars a day on Android. If this was true they would be making over 3.5 billion dollars a year, which is a billion more than they say they make. Oracle needs to check their math. Though I also think that this shows that Android and iOS don’t compete with each other directly since google profits from both (and from the looks of it fairly equally). The actual competitors are more Samsung or HTC against Apple. But even then it’s clear that 99% of readers of this website will not purchase an iPhone any time soon, as well as most Android users.
I love how you threw in that last line justifying why Google makes less of Android than Apple does off iOS, It tainted the whole article for me. Everything you said was factual but that little remark left a potent taste of bias and fanboism in my mouth. This really isin’t a criticism though, we are on Android Community after all. I’m just a little disappointed this was delivered to me by Google News (the operative term being ‘news’).
As for the facts, it does seem weird that the Guardian would extrapolate those kind of figures the way they did, that’s certainly bad reporting. Though the lack of objectivity in this article doesn’t seem much better…
Of course Apple would make more money off iOS than Google does with Android. Apple is a high margin company that makes hundreds of dollars whenever someone buys an iOS device, while Google doesn’t make any money from the Android device sales, their income is from the ads on their devices. But it does it really matter who is making more money? Unless your making a financial investment it shouldn’t (and both Google and Apple stock is a great investment). And don’t reject facts because they don’t support your beliefs, that is ignorant and insane. Fanboyism happens with fans of Apple, Google, and Sarah Palin and I can’t stand it in any case.
I don’t understand what you’re responding to here. I acknowledged that everything in the article was factual. I know Apple makes more money than Google I never rejected that fact. I was simply upset by the way the author justified Google’s lessor earnings, it was an unnecessary statement that added nothing to the article. I understand fanboyism occurs everywhere, but good journalism is about objectivity and statements like that are anything but objective.
“Google doesn’t mind – it made almost 40 billion in ad revenue last year” Yea,but where is it making that money ?
Google makes 96% of its revenue off of AdWords and AdSense with a good portion of that coming from YouTube and Google.com (the search engine itself). It should be noted that the way this article states Google’s ad revenue is slightly misleading. Google made $37.9 billion in revenue last year and 96% of that came from advertising. While almost $40 billion did come from advertising alone (because 96% of 37.9 is close to 40), it could lead a reader to believe Google makes a significant amount of money off its other ventures when in comparison, that amount is fairly small ($1.5B to be exact).
Typo in the article. “Applie” instead of “Apple”