App Store profits extremely difficult, developers say
updated 10:55 am EDT, Wed October 7, 2009
Initial success stories overhyped
Despite initial impressions given by Apple and the media, success stories at the App Store are actually rare, a new report suggests. Apple has enjoyed pointing to Trism developer Steve Demeter as an example of App Store profits, as well as a new egalitarian footing for independent developers. Demeter managed to accumulate $250,000 in two months through his iPhone app; while some observers believed he would be able to retire on future iPhone profits, Demeter now admits that he is only living a wealthy lifestyle because he invested in Palm stock, which jumped in value from $1.76 to $12.
Newsweek writes that after conducting interviews with consultants and programmers, it now appears that many developers are failing to turn a profit on their apps. In cases where money is being made, even popular titles are often making less money than might be expected. Trib Cubby developer David Barnard complains that in spite of good reviews and highlighting from Apple, he still ended up in debt because of his app, and having to sell his car. Only the release of a second app, Gas Cubby, has generated a profit. "But we spent a hell of a lot of money to get there," says Barnard.
Forrester Research notes that most apps take six months of full-time work to produce, at costs ranging from $20,000 to $150,000. Developers must then pass through Apple's approval process, where almost 60 percent of submissions are said to be rejected at least once. Once on sale, of the over 85,000 titles currently in the App Store, only a few hundred are believed to be capable of supporting full-time jobs.
Another issue is that even if an app is successful, the reasons for success may be unpredictable and difficult to repeat. Independent developers are also being increasingly shunted to the sidelines, as while half of the top 10 paid apps in 2008 were by small developers, today only one in the list (RedLaser) is an independent project. The app's coders, Jeff Powers and Vikas Reddy, say they are still in debt.
Major companies are said to be hurting App Store prices, deliberately pricing apps low or for free because they can afford to use them as marketing rather than a source of income. 148apps.biz observes that three out of four iPhone apps presently cost 99 cents or less. As a consequence some developers are believed to be migrating to rival platforms, by the likes of Palm, Google and Research in Motion.












It's a business
10/07, 11:11am reply
Wait, you mean before I quit my day job and write an app, I should develop a business plan and a marketing plan and budget for ad placements and get word out that my iFart app is worth your $4.99 and fills a hole in the app store space?
Hogwash! They said there's gold in dem hills and I'sa gonna git what's rightfully mine.
cmoney
Dedicated MacNNer
Joined: Sep 2000
Visibility is a problem
10/07, 11:46am (1 reply) reply
Having written 2 apps of my own, I can tell you visibility is the name of the game. If you get into "New and Noteworthy" (which I have not), you are on your way. But, with 85,000+ apps on the store (of which 75% are pure c***), no one is going to see your work. The genius is of little help, too. What Apple should be doing is highlighting top-rated apps and pushing down low rated apps. Let the public decided what should sell well.
sammaffei
Fresh-Faced Recruit
Joined: Sep 2004
Own Goal
10/07, 11:47am reply
I think developers have devalued their own market place with £0.59 apps. I anticipate prices will start to rise when the average dev realises they aren't going to ship 250,000 copies.
mark@pageworks.co.uk
Fresh-Faced Recruit
Joined: Jan 2008
It is a business, but...
10/07, 11:50am reply
A lot of mac developers jumped on to iPhone development based solely on their love of (almost) all things Apple. A lot of mac developers only develop for the mac because they love the mac. These sorts, they are rolling the dice. How else can you explain agreeing to the absurdly restrictive terms of developing for the iPhone, where you can't sell your products directly but must push your business towards Apple?
Unless you are adding an iPhone app to add some value to what you already sell, its a complete crapshoot, not something you should be basing a business on.
Lynn_Fredricks
Fresh-Faced Recruit
Joined: Jul 2006
Sorry, Don't Buy It
10/07, 12:15pm reply
First of all, there are plenty of apps that are not priced at 99¢. I'm shocked at some of the prices that people want for an app that does almost nothing or can't be done just as easily on the web AND - yep, big and - chances are you'll probably find an app that's just as good or better for free.
But, I'm totally willing to pay for an app that I want. For example, I'm an OmniPlan user and bought the $19.99 app. I use it constantly, for me it's a valuable app. Another is delivery status - it's a free widget, but you have to buy it on the app store - totally worth it, again, for me. And there are plenty of other apps I've bought and paid for - they are actually useful and desirable apps.
And I've got to comment on the Gas Cubby. I'm sure this app has its place, maybe even for me, but not at $6.99. There's a balance, between what an app does and what some of these people charge. I'd rather take that $6.99 and apply it to purchasing QuickOffice where I can enter the data in spreadsheet. I know this app does more than that like reminding you you're due for an oil change etc., but exactly how many people feel that such features are with $6.99 or how many people actually are that interested in how much they spend. Yep, there's a place for it, yep, some people think it's right on. Supply and demand.
slider
Mac Elite
Joined: Oct 1999
You say...
10/07, 12:15pm reply
One person's "absurdly restrictive terms" is another's "no big deal".
For a model no one had used before but now shows to be a huge consumer success, and that the competition is rushing to emulate, I'd say Apple deserves credit for a great idea. Complaints such as these don't seem to have thwarted 75,000 apps from being developed, no matter how ridiculous or insignificant they may appear to some.
Personally, I wish I had bought my Palm stock for $1.76 rather than the $15.50 I did 5 years ago.
/
doctor9
Fresh-Faced Recruit
Joined: Aug 2001
Switching platform
10/07, 01:15pm (1 reply) reply
Not sure on the theory there.
Will it take less time to develop an app for a rival platform? I've not seen anyone saying that Android or WebOS development is easier than iPhone development.
Can you charge more for an app on a rival platform? Again, unlikely - early Android users instead seem more into free apps, although I suspect this is more to do with early adopters choosing Android for political reasons - mainstream users will likely buy games - but the downside of a more open device will be more piracy.
The main reason I can see is 'less competition' - but to be frank, once you even get 2000 available apps for a platform, you'll be back in the same boat - how do you get people to know about your app?
Incidentally, this is exactly why the fantasy of musicians putting stuff up directly on iTunes wouldn't work. You end up with a flat market with thousands of apps / millions of songs, but very few people sell enough to even make back their costs.
And all of a sudden, you discover that things like marketing and advertising are not just evil middlemen expenses you can do away with, but that actually, very few people go out looking for products (apps, music) to buy, but instead need to be cajoled that they need something.
JulesLt
Fresh-Faced Recruit
Joined: Jul 2005
As a developer who actually makes a living
10/07, 05:43pm (1 reply) reply
We are a company that makes a living on mobile software. We've been doing it for 9 years now, employing 7 people. I started it myself and while we are not wealthy, we make a good living.
The iPhone sales are doing very well. We're not top 10 paid, but we're not last 100 either. The problem here is a lot of simply bad reporting by everyone in the industry. First you had the reports of people making millions, now losing millions.
Its a business. Just because its an iPhone doesn't mean you approach it any differently. Don't start a business hiring a developer $150,000 to write your iPhone app. That's idiocy. Become a programmer, write it yourself, do a good job, and follow all the regular business rules people have been following for thousands of years of providing good service, good products, at a good price and you will do well.
The iPhone App Store is not a diamond mine and its not a well. Its a place of business. A plumber who has his own business and grows it well can make a big plumbing business. A business man who goes and hires a plumber and expects to make money is an idiot.
alex_kac
Grizzled Veteran
Joined: Aug 2002
who writes this stuff?
10/08, 09:40am reply
"148apps.biz observes that three out of four iPhone apps presently cost 99 cents or less. As a consequence some developers are believed to be migrating to rival platforms, by the likes of Palm, Google and Research in Motion."
They forgot to add "where the exact same thing will happen"
ethical_paul
Fresh-Faced Recruit
Joined: Mar 2002
the guys who write crappy apps...
10/09, 01:56pm reply
...that aren't selling well should try panning for gold in Colorado. i hear all you have to do is show up.
rtbarry
Fresh-Faced Recruit
Joined: Aug 2001