Apple's large chunk of revenue comes from hardware sales with huge margins. Around 10% would come from app store last time I checked. Google's large chunk of revenue comes from ads, also around the 90% mark.
They use the data collected from any activity on your phone and merge it back with any other data they have of you, to display ads on all the platforms you use. Less time spent on your phone, less usage they can collect to get your behavior, less specific ads. I thought it was common knowledge.
