Evernote CEO: iOS More Profitable Than Android and Web
No matter what industry or market you’re looking at, you will always find that businesses and companies invest a great deal of capital and effort in determining the most profitable target audience(s) that they feel they will see a higher return on investment by marketing and selling the goods or services to. Historically, this practice has been a relatively simple matter of determining the largest group of people who had a need or use for a particular product and investing on their impressions.
However, in the heart of the technological age we have seen that targeting a larger audience doesn’t necessarily guarantee a high ROI. Rather, the specific characteristics and attributes of people within the audience groups ultimately determine how profitable a specific venture will be. Recently we have seen a very well-documented example of this phenomenon with the “freemium” Evernote service after CEO Phil Libin discussed the company’s primary focus on iOS-based devices, which ultimately pay off better in the long-run.
Being one who has stayed in-touch with the growing (and profitable) mobile craze, I must admit that Libin’s statement shocked me a bit at first. This is, of course, because the nature of the “open” Android platform allows for it to attain a higher market-share than that of Apple‘s iOS. With this in mind, combined with recent studies that suggest that the Android platform is more “desired” amongst consumers, initially lead me to question why Evernote would see iOS as mightier venture regardless of the fact that the number of users is lower than that of Android. After all, that is part of the reason why Windows Phone 7 is in a rut; something we will likely see with RIM‘s new BlackBerry PlayBook as well.
But as it turns out, loyalty to a platform ultimately takes precedence over the number of users that use it, and this trait on the part of the end-users ultimately helps to determine the potential profitability of a given venture.
So why does this make iOS users a more attractive customer-base to companies like Evernote? The answer to this question really boils down to the stereotype of your average Apple user. Sometimes labeled as “fanboys”, it is more or less a known fact that users of Apple products tend to be loyal Apple customers who stick with their devices without much thought of looking at other products. This is not to say that Apple users are closed-minded individuals who blind themselves to other options, but from what I’ve seen Apple customers rarely see any justification to buy into other product lines.
And from a marketing perspective loyal customers are the best thing that a company can get their hands on because loyal customers will stick with a product, ensuring consistent subscribers and income for the company.
Moreover, I think it’s fair to say that the fact speaks for itself that Apple users aren’t hesitant to drop money on products that they feel to be of superior quality. And what’s better than a loyal customer? A loyal customer that’s willing to spend money. Now that’s not to say that Apple users throw money into the wind, but the general knowledge is that Apple customers tend to, at least in general, be more willing to spend money.
Because Evernote is a “freemium” service that offers both paid and free subscriptions, the willingness on the part of users to spend money is that much more important. Looking at donation-based services like the Humble Indie Bundle, a “pay what you want” game bundle that allowed users to pay whatever they wanted for a set of games, the statistics show that Apple Macintosh users are more generous than most in terms of what they are willing to pay for a product. This pretty much backs up Evernote’s findings, and shows that iOS users make it the profitable venture that it is.
Retrospectively, I honestly feel that the loyal Android users out there – people who are tagged as “Fandroids” – aren’t loyal to Android because of their love of Google (à la Apple), but rather because they see the Android platform as the most advanced and promising mobile operating system right now. But the real question that has yet to be determined is whether or not Android users will hold continued loyalty when (not if) a more robust mobile platform comes about. And even though I’m sure further non-Apple innovations can and will convince some users to move away from iOS-based devices, I think that Apple has more “locked in” iOS users than Google can speak of for Android.
Last but not least, there’s a bit of a status quo that leaves iOS as the more app-centric mobile operating system. This helps to keep iOS attractive for end-users, and ultimately developers as well. And with the perception that iOS has a better selection of mobile apps, it only makes sense that iPhone users are more focused on apps, meaning that they are going to be more willing to try to possibly keep subscription-based apps.
What does this all mean though? When it comes down to it, I really think that this type of information makes it all the more evident that iOS development is the most profitable mobile route for developers, and I think we will ultimately see developers show a greater loyalty to iOS down the road, ultimately allowing Apple to maintain its status quo in terms of superior app selection. In turn, I think this will serve as an anchor for Apple, allowing them to remain competitive even with steep competition in the mobile industry.