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Comment by cageface | Hacker News Reader

First off– let me say that the paid side of the App Store is not where the real money is being made.

This is why I think the whole app economy is a house built on sand. How long are people going to be entertained by this gimmick of junk IAP?

Sure there are a handful of apps where some kind of recurring IAP actually makes sense. But the vast majority of these apps are selling virtual Tchotchkes with absolutely zero real value. Sooner or later this seems bound to lose its novelty.

More and more it seems that the only smart way to make money writing code is selling SAAS B2B apps.

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It doesn't have to be junk. You can sell levels, content packs, editions, etc.

To me, the lesson is that it's really hard to get someone to part with money until they love your app-- and a crappy description and a few screenshots in the app store don't get them over that hurdle.

It'd be interesting to see Apple implement a 24-hour Trialware option-- I'd wager we'd see a huge bump in app quality AND a big bump in actual sales. Free trials are a proven way to sell software.

Absolutely. On the the other side of the fence, it was a great loss when Google decided against the 24-hour refund window for Android apps.

Physical Tchotchkes have done well for 1000s of years. Do you think people will get tired of virtual Tchotchkes and go back to physical?

I know it seems odd that people pay money for essentially tiny bits of entertainment. But the fact is that's what lots of people want. If you want to do something positive try combining the virtual Tchotchkes with something partially educational.

Frankly it's too early too tell if this market has legs. My guess is that it's a lot more limited than most of the current players think but who knows for sure?

What market, the app market?

The number of apps and gross revenue from apps has been growing big. The future of software development is mobile apps.

You might be too young to remember this but people were saying the same thing about the video game business back in the heyday of the arcade. Consumers are fickle.

I do think mobile is important but I think most of the money in apps will be integrating them into some larger business. For example, I'm starting a new app for a big U.S. retailer. The app will be free but presumably it will drive more business for them.

I probably am too young to know anything about the arcade business, but arcades died because better, more convenient technologies replaced them. Their form factors shifted to consoles, handhelds, and computers.

Consider now the adoption rate of smartphones, where we'll have a billion devices in the hands of users within the next few years. Mobile devices are now replacing computers and gaming consoles. Do I see anything replacing smartphones/tablets anytime soon? No. That's why the bet is obvious to me, your audience is shifting to a new platform. Apps ARE the future because that's where the audience is and will be.

Mobile is here to stay, I agree. But I think the future of this kind of mobile app business model is a lot less certain.

Its not the business model that will change. The business model works, thats why there is so much competition in the gaming industry and lots of money being made. What will change are the types of games themselves. Because as competition increases, acquiring a user becomes more expensive, so the games will have to have different mechanics and be of higher quality to differentiate themselves. Your smartphone is increasingly becoming your new console.

True enough, but there's no "law of conservation of gaming". As interfaces, form factors and fashions change, so does the population of gamers and the time and money they spend on gaming. Some of the most brutal periods for the gaming industry have been when the current fashion turned against gaming. That there was a solid growth trend underneath the contrary fashion didn't make a difference to the many studios that went bust in the meantime.

Maybe so, but what proportion of these apps generate revenue for those who buy and use them? How many such apps help people design things, build things, monitor things, simulate things, and discover things? How many mobile apps exist to run accounting, payroll, and HR? Server software that supports mobile clients isn't itself a "mobile app", unless your claim is simply that mobile devices can replace PCs being used as "dumb terminals", which, while true, means the more interesting software components will often be the non-"mobile" bits.

Even "mobile apps are the future of video games" is only true if the market for games that are neither "casual" nor inherently "social" suddenly dries up.

I think there is a big opportunity for mobile developers that build a great app that solves (or greatly alleviates) a problem for users and giving the app away for free, but make money on the back end off service providers that are willing to pay money for access to users/consumers. You'd be moving higher up the marketing food chain from simple ad displayer to lead generator.

I agree. Making money through affiliate and lead generation has been around for a long time and seems to transition nicely as the web evolves.

I'm sure there are plenty of apps that do just this and there will likely be more on the way as global mobile adoption numbers increase.

All the apps I've done on contract have been this kind of app. All of them were free and none of them had IAP.

Honestly I think this is the future of the app business. Apps will be important but most often only as a component of some larger business.

> More and more it seems that the only smart way to make money writing code is selling SAAS B2B apps.

The problem with that is mining good ideas. I seem to only come up with "fun" ideas, i.e. games, with certainly have the aforementioned problems. Would love to come up with a sensible B2B idea one day.

What are you doing to generate ideas?

To come up with sellable subscription products for businesses, you need to obsessively study and interact with your potential audience. Good ideas won't just spring into your mind.

Generating ideas requires fairly intimate knowledge of a niche. The only niches I have that kind of knowledge of are geeky interests (such as games) which are already hugely overserved with quality software. I need to acquire deep knowledge of the more boring interests, where opportunities exist. But I don't see how to get there...

> How long are people going to be entertained by this gimmick of junk IAP?

A very, very long time. It's basic psychology at work. Those little virtual trinkets are simply addictive, and it won't change as long as we keep being human beings.

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