Posted by: Olga Kharif on October 23, 2008
Google just announced that it will share revenues from Android Market with operators. Developers will get 70% of the revenues from selling their applications through the marketplace. And, once Google’s costs are covered, wireless carriers, whose networks allow for access to the store, will get the rest.
That’s quite different from Google rivals’ business models. As you’ll recall, Apple pockets that 30% revenue cut.
For carriers, working with Google vs. Apple won’t make a difference near-term. Apple has said that its 30% revenue share just barely covers its iTunes Apps Store operating costs. But longer term, the picture could change. Analysts believe that Apple should be able to make money off of the App Store, once most of its infrastructure is in place. After all, Apple is able to make money off of sales of music. I’d expect the same to hold true for Android Market. So, in the long term, Google’s move could help it attract carrier partners.