Classroom Companion: Business

 Case Study 13.2 The Mobile App Duopoly
Several companies offer mobile apps, 
but the market is dominated by only two 
of them: Apple’s App Store and Google 
Play. The app market is thus a duopoly.
The apps are designed for two types of 
smartphone technologies:
5
App Store apps can only be loaded 
down on iPhones and some other 
Apple products. The apps are running 
on the closed-source iOS operating 
system of Apple. The market share of 
iPhone is approximately 15% of the 
international smartphone market.
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Google Play apps can be loaded 
down on smartphones with the 
open-source Android operating sys-
tem of Google. Android phones are 
produced and marketed by several 
independent manufacturers. The 
market share of Android smart-
phones is about 85%. The market 
share for Google Play is then 5.7 
times larger than that of App Store 
since the market for apps is the same 
as the market for operating system 
technologies.
Several of the apps are available for both 
iPhones and Android smartphones. 
Some apps are available only for one of 
the technologies. Google Play was 
designed as a production platform for 
independent app developers. Initially, 
App Store was proprietary but was soon 
opened for independent developers to 
produce their own apps directly on the 
platform.
The business models of Apple and 
Google are different as is evident from 
the statistics for mobile apps shown in 
.
Table 
13.2
 (Nelson, 
2018
). The data 
are for the third quarter of 2018.
Both app stores contain approxi-
mately the same number of apps. The 
 
Chapter 13 · Digital Monopolies and Oligopolies

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majority of the most popular apps (e.g., 
Facebook, Instagram, YouTube, Uber, 
and Google Maps) are available in both 
stores. The table shows that Apple 
acquires 66% of the total revenues from 
the app market (12 out of 18.6 billion $), 
while only 33% of all downloaded apps 
are from App Store. Other statistics show 
that iPhone users spend almost twice as 
much on paid apps than Android users 
(Blair, 
2019
). This is one reason why 
Apple, despite having a much smaller 
market share, earns more on apps than 
Google. Other reasons are associated 
with different charges for developers and 
share of revenues per app.
The apps duopoly is obviously much 
more complicated than other duopolies 
since there is no simple relationship 
between market shares and revenues.