Google 'not happy' with Android Market app sales

Although devices running its Android mobile operating system now make up 40 percent of all U.S. smartphone sales, Google (NASDAQ:GOOG) admits it is "not happy" with sales of premium applications across its Android Market storefront, vowing significant improvements in the near future. Speaking Tuesday at the Inside Social Apps conference in San Francisco, Android Developer Ecosystem manager Eric Chu said Google will introduce an in-app payments solution during the current quarter, enabling Android Market shoppers to purchase virtual goods, additional gaming levels and the like. Third-party digital payment providers like Zong, Boku and PlaySpan have already introduced in-app purchase options for Android apps; late last year, mobile software analytics provider Flurry reported in-app transactions now account for about 80 percent of developers' average monthly revenue per user on Apple's (NASDAQ:AAPL) rival iOS platform.

Chu said Google also plans to roll out additional carrier billing options in partnership with operators across the globe. Android Market quietly introduced direct carrier billing for premium applications sold on the AT&T (NYSE:T) network late last year; Chu said it is both expensive and time-consuming to forge carrier billing agreements, but added Google recognizes the potential impact on consumer app spending.

Also on tap: Enhanced application discovery tools. According to Chu, Google is at work on improving Android Market's ranking algorithm, effectively making it easier for users to find quality applications. In addition, Google will continue investing in its Android Market support staff, building out a team to enforce the store's terms of service and eliminate apps that violate the rules.

As of November 2010, Android represents 26 percent of nationwide smartphone market share (a 6.4 percentage points leap over the previous three-month period), ahead of iOS at 25 (up 0.8 points), according to digital research firm comScore. Research In Motion's (NASDAQ:RIMM) BlackBerry operating system continues to lead the U.S. market at 33.5 percent of subscribers, but its dominance is shrinking rapidly, decreasing 4.1 points over the previous three months. Despite Android's accelerating growth, Android Market boasts roughly 130,000 apps, far off Apple's pacesetting App Store at more than 350,000.

For more:
- read this Forbes article

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