Coders get 70 percent of Android Market revenue

With T-Mobile's G1 now on the market, Google opens the doors to the Android Market. Later, programmers and carriers will share revenue.

Stephen Shankland principal writer
Stephen Shankland has been a reporter at CNET since 1998 and writes about processors, digital photography, AI, quantum computing, computer science, materials science, supercomputers, drones, browsers, 3D printing, USB, and new computing technology in general. He has a soft spot in his heart for standards groups and I/O interfaces. His first big scoop was about radioactive cat poop.
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Stephen Shankland
4 min read

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.

Google's Android Market
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. 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.