By Star Chang, posted Aug 5, 2012 at 3:12 AM, 985 views,

Chinese iPhone User Doesn’t Like to Spend Money on Software

A report from a Shanghai-based analyst firm claims that the Chinese version of the iOS App Store accounted for 18 percent of total downloads in the second quarter, but just only accounted 3 percent of revenue. China stands as Apple’s second-largest app market in terms of downloads. The report estimates that the country’s share of total App Store revenue was significantly smaller than the estimated 42 percent revenue share from the US, which accounts for 28 percent of downloads. According to the research, it’s notable that the majority of iOS downloads in China are free apps …

Apple’s App Store revenue in China amounted to $37 million over the quarter, up 105 percent from last year. Apple is expected to grow its app revenues in the country this year by 98 percent to $171 million. But the average revenue per iOS app download in China was estimated at 3 cents only, significantly lower than the global average of 19 cents. One possible reason for the low revenue figures in China could be piracy. A large percentage of Chinese iPhone users will jailbreak their iPhone to gain access to free applications. It is estimated that as many as 40 percent of Chinese iPhones are jailbroken.

China rose to become the world’s largest smartphone market last year. According to one recent report, China has 388 million mobile Internet users. It was found more than half of the 21 million iPhone owners in China to be located in urban areas like Beijing and Shanghai. China has plenty of iPhone fever, but the paid-download app market appears to still be maturing here. Since willingness to pay for apps outright is relatively low in China, developers should opt for alternative revenue sources. At the least, Apple’s App Store revenue is still considered better than Google Play store, which does not yet support paid downloads in China.

SOURCE: Stenvall Skoeld via TNW ASIA
More coverage: Squeezing cash from China’s billion phone app market (BBC)