IPhone App Store Developers Aren't Getting Rich
newsweek.com
newsweek.com
Only Three of the top hundred grossing apps cost $50 or more. These three apps are all from big companies and the apps are iPhone versions of their current products.(Two of the three apps are MobileNavigator from Navigon and TomTom's navigator)
I'm surprised that anyone can get away with saying that "Figures show that the top grossing apps were $50". The top grossing apps list is easily verifiable in itunes <g>
An example: Omnifocus ($20) has sold 50,000 copies, and made the company $700,000. It is selling at a consistent rate, no race to the bottom or gimmick app. It rivaled (if not beat, i can't remember now) Flight Control in profits
Also, I was not saying "All $50 dollar apps were top grossing", I was making a point that you do not have to make the next flight control to be able to make a reasonable profit (thats not to say that you don't need a good product to make a profit)
As itunes stats show (today), in the top 100 grossing apps list, only three apps are $50 or higher
Great presentation at SO DevDays
In something like the Console gaming business, there is a huge barrier to entry. Making a copycat game happens, but they are few and far between. It takes a lot of time and money to create a game. Since it does take such an investment, everything is generally thought out much more and markets are analyzed carefully before moving in.
On the iPhone, the barrier to entry is much lower, allowing copycats to crop up very quickly and flooding the market and driving down prices. With a coffee shop there is at least a significant barrier to entry, while it isn't as much so with the App Store.
The same thing has happened on the Internet. It is very hard to make a for-pay site because there are so many others which are willing to offer similar services cheaper. This has lead to most sites on the Internet being free or mostly free. For example, look at on-line newspapers. Many of them aren't able to turn much of a profit on-line because they have to compete with many many other sources of news that are free.
You could argue that the more expensive items are better and so will attract users, but I think the Internet has taught us that a lot of people will settle for a lot less as long as it is cheaper.
If that's the case, who's rushing for gold now that we're paying attention too?
There are a few things to be aware of regarding iFart apps, and it starts by looking at the top charts in Movies and Music. Take a peek — it's all pop culture likely driven by returning customers between the ages of 12-26. Why would the AppStore be any different? It's not. The second thing to be aware of are the big boys. For the first few months it was mostly an indie market but that has long past. Third issue are spammers but I'm not going to go into details, everyone is familiar with them.
When you combine those three issues, along with poor search functionality, Top 100 Charts (out of the entire store) is extremely difficult to hit for 95%+ of the developers. This is where the big-money buying activity occurs. But here's the good news that keeps me optimistic about the future, and hopefully more stable/predictable revenue:
With the recent changes in iTunes 9, I'm most excited about the Top Earners chart. Currently the Top Earners chart is only available based on the entire store, but with a quick hack to the URL you can view Top Earners by category. Top Earners are correlated to app revenue (price), not simply volume which is how the Top Paid charts function (ie: pressure to .99)
Link to Top Earners in Social Networking: http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewTop?id...
We're still in Top 100 Earners by category whereas in Top Paid we're nowhere to be seen. My hope is that sooner or later Apple will make this information accessible to all customers on a per-category basis... and your affluent shoppers, who are avoiding AppStore unless by referral, will be able to find the real gems a little bit easier. If nothing else, improve the margins of "niche" apps because $.99 is simply not sustainable.
1. Right-click and copy the link to the Top Paid chart under said category. The Top Free chart does not work, has to be TP.
2. Replace the popId=30 to popId=38 in the link, then paste it in your browser.
Tada. :) Here's medical: http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewTop?id...
I have this hypothesis that there might be a market for apps that cater to a more female market. Most developers being guys, I figure anything a male would be interested in has been created, whereas female-oriented apps might still have a market. Anyway, just a thought.
That's a pretty silly statement no matter how you take it. Remember the myth (or the myth of the myth) about nobody needing more than 640K of ram? There will always be opportunities for novel applications, more user friendly applications, applications which take advantage of new technologies, etc.
However if you do market research or usability testing, dependent on the use case please do with both genders and perhaps different ages - for example, soft thumbboards may be perfectly fine for someone with one size hands to use and ridiculously hard to use with another. That's an obvious example, and there are other things not so obvious that may come out from that.
In 2007, "Pirates of the Caribbean 3" grossed nearly a billion dollars while "There Will Be Blood" never even got to 100 million. "Two and a Half Men" is a hit TV show and Arrested Development is off the air. The Arcade Fire were lucky to go gold with "Neon Bible" while Fall Out Boy went multi-platinum the same year.
Given your logic, nobody should bother creating anything of quality. Sometimes quality is successful, sometimes its not. But it's always regarded.
That movie was horrible.
braces for downvotes
So here the strategy is simple: just develop stupid things that takes a few days. If you check the top apps, half are not hard to code at all but stupid things that people are willing to buy.
So instead to write a smart, interesting application that costs 100,000$ it's better, I think, to write 20 applications costing 1000-3000$ each.
Btw, if developer talent is normally distributed (talent, it seems, usually is), shouldn't developer earnings also be? I'm not a statistician but it's an interesting question..
For example, a talented chef can only serve similar amount dishes in a night as less talented chefs. But the dishes they made taste much better than those and charge more.
At the same time, a talented plumber or a talented doctors can not serve more customers or patients than a less talented plumber or doctors.
It seems when the benefit of the talent scales, the distribution of their influence is Pareto distribution. So it seems developers, musician, artists, physicists fall into this category.
I think the best description of the process comes from an editor explaining why so many manuscripts fail: http://nielsenhayden.com/makinglight/archives/004641.html#00...
It's harsh, but has given me insight into how the startup world, including iPhone app startups, works.
It's that even those on top aren't winning big. Why play the lottery when the top prize is modest, and the risk is high?
Finally, talented people with preference for working in a system than designing one out of scratch may be out of luck when looking for employment in a low-yield market. I don't think either of us are talking about talent as a static, singular or sole factor of employment probability, after all - and like it or not, there's such thing as Plain Bad Luck for some folks.
The only real winners in this whole game have been Apple and iphone dev consultants.
The markets become saturated too quickly. After a while, your problem becomes advertising rather than product quality. The only way I see to survive somewhat reliably later on is to diversify and become a portal/aggregation company.
If you're talking about simply avoiding 'web apps,' there's still decent money to be made in desktop applications. But, as with almost all industries, there are two ways to strike it rich: get really lucky, or work really hard.
edit: now that I think about it, you might be able to get a couple years out of µC work without dealing with the web, but that's more hardware than software.
My languages of choice are Python for prototyping and (modern) C++ for the actual development. I enjoy working on machine learning types of projects and thinking about algorithms.
Not all developers on [insert platform here] are getting rich. But some are. Not everyone who starts any type of business will strike it rich. But some will. Why is this news?
This isn't going to change anytime soon and it's going to play out across ALL platforms. The AppStore just gets the attention because it has the biggest "easy success" potential to a developer. A crappy app that nobody wants is a crappy app that nobody wants on any platform.
If that realization is the only thing keeping someone from going broke for having tried iPhone development, they'll soon be broke from some other idiotic scheme. Bridge ownership, perhaps.