iOS vs. Android Monetization: Why Not Understanding the Differences Could Harm Your Business

Navigating the mobile app landscape is no easy feat. Even if, by the end of 2024, mobile apps are expected to generate over $935 billion in revenue, some studies indicate that up to 99.5% of consumer apps fail, and this is especially true in hypercompetitive niches like audiobooks.

Having said that, in today's world, it is not only about building an app in general terms, but about choosing the right platform to do so between iOS and Android. This means that one where your user base is more likely to be.

Getting this decision right is key particularly in the initial stage, given that many startups have limited resources and need to maximize the impact of their initial development efforts. The differences between iOS and Android are not merely superficial — they can fundamentally affect your app’s success.

Personally, I was involved in making such a decision recently. We opted for a cross-platform approach using Flutter, prioritizing the Android version first since marketing tests tend to be slightly more affordable on this platform. These insights then equipped us for a better launch on iOS.

In this article, I will share some of my experience, and based on it, explain some of the key differences between iOS and Android when it comes to adopting a monetization strategy. I must add that failing to understand the distinctions accurately could increase the chances that your app fails — and why would you want that when the odds are already stacked against you?

Understanding user behavior and fueling engagement

Where are your target users located, and how do they interact with their devices?

First and foremost, you must understand the demographics of each platform.

For instance, iOS users tend to cluster in higher-income regions, particularly in North America, Western Europe, and Japan. With more disposable income at their fingertips, they are more likely to spend money on apps and in-app purchases. This, in turn, creates a lucrative environment for founders who focus on premium pricing models.

Conversely, Android has an extensive reach into emerging markets — such as South America, Africa, and parts of Asia. In these geographies, many users favor free or ad-supported apps, since they don’t want to spend additional money.

These disparities are beyond location, though. User engagement metrics reveal that iOS users typically demonstrate higher engagement levels, spending an average of 4 hours and 54 minutes per day on their devices, while Android users average around 3 hours and 42 minutes. This needs to be accounted for when aiming to create compelling user experiences.

Retention rates also vary. iOS enjoys retention rates between 85% to 88%, while Android's hover around 89% to 91%. However, the latter is accompanied by more fluctuations, as Android users tend to switch between apps more frequently. This suggests that while Android may offer higher initial retention, maintaining user interest is an ongoing challenge.

Find out if your target users are spending money on apps, and if so, how

The spending habits of users further emphasize the need for tailored monetization strategies. As mentioned, iOS users are generally more inclined to spend on apps and in-app purchases, which is why iOS is expected to account for approximately 68% of global app spending in 2024, amounting to around $124 billion. In contrast, Android users are projected to spend about $51 billion.

Beyond this, studies show that iOS users spend an average of $12.77 per app, while Android users only spend $6.19. These insights suggest that iOS users are more likely to engage with multiple paid apps — in the same study, 45% of iPhone owners reported having five or more paid apps, compared to just 19% of Android users.

Session length is another important indicator that impacts spending. As mentioned, users on iOS often engage in longer sessions compared to Android users. Android users may engage in shorter, more varied sessions, which align well with ad-supported models. This pattern indicates that iOS might be more conducive to apps that rely on longer engagement times, such as games and premium content platforms (Codigee - Flutter Development Experts).

Understanding these patterns is crucial to plan your app in order to optimize user engagement and retention. By tracking key metrics such as session length, in-app spend, and user interaction rates, you can design an app that enhances the overall experience. Furthermore, it helps you create platform-specific monetization strategies that align with your target users’ spending behavior.

Defining your monetization strategy

As we know, there are various methods through which apps can be monetized. These include in-app purchases, ads, and subscriptions — with each of them presenting specific challenges and advantages. For instance, while some gaming apps have thrived on ads and in-app purchases, platforms offering recurring content or under a SaaS model might be better suited for subscriptions.

The importance of testing and comparing user behavior

We chose to start testing monetization on Android because of the cost-effectiveness of reaching a large, diverse user base. Android allows for quicker iterations and feedback collection, which is ideal for startups working with limited resources. By launching on Android first, we could test different monetization models at a lower cost and gain a better understanding of what users preferred.

Our initial model was in-app purchases. This was a necessary step since we understood that subscriptions would likely suit our audience better; however, as a young product, we had no basis for selling subscriptions. Selling books individually allowed us to gauge user conversion rates and interest in our catalog, which proved to be effective.

Other findings were that users were more engaged when they started their experience with free books, which helped build trust in the product and ultimately led to purchases. Based on this and other engagement methods, we grew our conversion rates to 12%. It was then that we decided to jump to subscriptions.

If you are thinking about doing the same, here’s the key. To test subscriptions, I strongly recommend having a substantial catalog in place. Once I felt we had this, we started with simple options: a weekly subscription for $8.99 and a quarterly subscription for $49.

Over the next six months, we experimented with other models such as annual subscriptions, weekly options with restrictions, and different user engagement strategies. These findings led us to optimize our plan to launch the iOS version.

We needed around six months of data comparing user behavior between iOS and Android to feel confident. Without these valuable insights, we might have missed out on ways to improve our user experience.

The real test: Is the app generating sustainable revenue?

For an app to survive and defy the odds, it needs to be sustainable. And the only way to accomplish this is by generating revenue. Hence, choosing the right platform to monetize your app is possibly the most important decision you have to make right now.

To help you come to a better conclusion, let’s look at the economics of apps on both platforms, and how the revenue per user varies.

From our personal experience after launching on both platforms, iOS has achieved an average revenue per user (ARPU) of $4.60, compared to Android’s $4.00.

Additionally, the Average Revenue Per Paying User (ARPPU) reflects even more pronounced differences: iOS users generate $85 versus $70 on Android. These figures illustrate the importance of aligning your monetization strategy with user behavior and platform characteristics, and are exemplified by our conversion rate, which was 10% on iOS and 8% on Android.

Having said this, it is not only about revenue, but about sustainable revenue. One-time purchases can generate short-term cash, but recurring subscriptions ultimately can become the lifeblood of an app as a business. The key indicator to measure this is the retention rate. In our case, the retention rate for paid users — after 30 days, since most apps operate on monthly subscription periods — was 30% on iOS and 26% on Android. This indicated a slightly higher level of loyalty from iOS customers.

However, this is our case, and your situation may vary based on your characteristics. For this, it helps to analyze more case studies and look at how apps have performed on both platforms.

Effective marketing strategies: What worked and what didn’t

You’ve built a great app, and now, it is time to share it with the world. You can’t wait for the downloads to start coming.

Keep in mind that, when promoting apps, the strategies that work best can differ between iOS and Android. Given the differences explained above, iOS users are generally more responsive to premium positioning and exclusive content, making marketing messages that emphasize quality and value particularly effective. Conversely, Android users often respond better to promotions emphasizing accessibility, affordability, and free trials.

The best way to measure the efficiency of your efforts is calculating your customer acquisition cost (CAC). This also helps you determine whether your efforts are profitable. Many apps don’t realize that it costs them more to acquire users than the revenue these users bring in. As a result, they can quickly go bust.

For us, our CAC remained nearly identical across iOS and Android. However, we noticed that conversion rates varied based on where we were acquiring users. Platforms like TikTok or Facebook — which have higher CACs — converted better than others such as Google Ads. However, some users who found us through Google Ads stayed for longer. Understanding these dynamics is key to guide your marketing strategies and maximize the odds that your campaigns have a positive ROI.

Final thoughts

I only expect the competition between iOS and Android to intensify. With mobile adoption levels set to keep growing, we will need to keep paying close attention to changes in user demographics and spending habits, and pivoting and adapting accordingly if we want to keep building winning apps. Understanding these trends will be critical if you are seeking to optimize your strategies for growth and success.

When it comes to choosing a monetization strategy, choosing the right platform to start testing can be pivotal for your app’s success. If your app relies on ads for revenue, Android offers a more cost-effective route, allowing you to reach a wider audience with lower initial costs.

However, if subscriptions are at the core of your business model, iOS should be your primary focus. The spending habits of iOS users, along with higher engagement and retention rates, make it a more lucrative platform for subscription-based apps.

If your target market is the U.S., don’t hesitate to run marketing tests directly there, as the difference in user acquisition costs between platforms is minimal. What matters most is understanding the platform-specific behaviors and tailoring your monetization strategy accordingly, to ensure the highest possible return on investment.

And always remember, no matter how much time you allocate, it will inevitably take longer than you expect!