I'm at StackOverflow DevDays in Boston, and Dan Pilone gave a great presentation on the iPhone environment. The iPhone isn't really a gold rush, but there is money to be paid. Figures show that the top grossing apps were $50, even though $.99 sell more. The fact is, you're not going to be able to make a $.99 app and expect to make it rich. If you put in hard work, you can get paid. If Pilone's presentation was online, I would link to it.
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>
I'm really happy to hear you enjoyed the talk. To be clear, it's the top grossing app in Sept 09 that was $50. My information for that statistic comes from the Sept. Distimo report available here: http://distimo.createsend4.com/t/r/l/hllhtd/yuldzkhi/r
I am just surprised by the number of articles written with the exact same tone. Its like saying, I opened the first coffee shop in XYZ place and made a heck of money than 10 more coffee shops opened and most of us are barely making enough money to sustain ourselves. Yes, if you come up with an insanely good idea which is new and cannot be replicated easily for example: what smule is doing, no matter what, you will do extremely good. The probability of being a lucky 1 hit wonder is diminishing because of big brands now in the foray with a total of 85k+ apps on appstore. Now only the best of the best will survive who are in it for the long haul and have the patience, persistence and vision to stay there and develop a business and not looking to hit a jackpot kind of a mindset.
I think there's something that's different about the App Store, which is basically the same as on the Internet: the barrier to entry is very low.
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.
It's a gold rush. The first prospectors do pretty well. The later ones starve. It's the people selling auxilliary stuff to the prospectors that make a killing.
I've been publishing to the store since Nov. 08 (started in Aug 08). We've had marginal success but it's certainly a very challenging road. There are a number of pains that bother me but that's to be expected, Apple did a HUGE thing breaking down the mobile software barrier and opening the doors to international sales. We would not being doing as well if we relied solely on app sales, fortunately we're building an app for a Comedy Central show and it's compensating us well.
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)
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.
The common iFart example isn't a reflection of the store, it's a reflection of culture.
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.
I was tossing around iPhone app ideas with some non-techie friends a while back. Everyone had a hyper-specific need for an app, but then I mentioned the Daily Show bit about the fart apps that was on a while ago and it seemed to have the most traction amoung the diverse group. I guess it comes down to people being willing to pay a buck for a cheap laugh, thus, there is a market.
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.
"Most apps take at least six months of full-time work and cost between $20,000 and $150,000 to develop, according to Forrester Research"
So here the strategy is simple: just develop stupid things that takes a few days. If you check the top apps, half are not hard to code at all but stupid things that people are willing to buy.
So instead to write a smart, interesting application that costs 100,000$ it's better, I think, to write 20 applications costing 1000-3000$ each.
Interesting, but not really surprising. Artists & musicians aren't "getting rich" either.. Is there some reason a normal(ish) distribution wouldn't apply to iPhone earnings?
It seems the same as with any "hit" driven environment. Getting a top-40 song, a top blog, the next NYT bestseller, or top iPhone app takes a lot of work and a little luck. There are those who are suited to it, persevere and get that big break. Then there are a few who just don't get lucky and thousands of wannabes who fail to execute, be it on minor flaws or epic levels.
Btw I submitted this news report yesterday, but I titled the submission with Newsweek's title/headline for the article - "Striking It Rich: Is There An App For That?" (Hardly anyone noticed that submission :-).
--
On other posts, I've seen some commenters suggest that hn submissions should keep the original title of the article and not editorialize by typing in a new title, but as this this submission shows, sometimes, re-titling a news report makes it easier for people to understand what the news report is about.
Sometimes the original titles are just not very informative. So in those cases it may be a good idea to change the title. But I still think that one should not editorialise -- i.e., one should try to use a title that faithfully summarises the article.
When I submitted it that was the default title that came up (and what is in the title of the web page) so I didn't re-title it deliberately, but I agree a change in title can often make a big difference.
Newsweek picked two really bad examples for this article. One is flat out profitable and the other is making ~$100k. From my perspective that's rich in this economy where many talented and qualified people can't even find a job. I'm sure there are lots of real examples of people losing money on the App Store but Newsweek couldn't be bothered to find any.
There are so many of these 'iPhone development doesn't automatically make you rich' articles that make it to the top of HN. I tend not to look at the comments for those articles, so forgive me if this is a common question, but can anyone tell me why there are so many? You'd think this is something we'd all know by now.
I'm convinced that on these new anyone-can-make-an-app platforms (e.g. facebook, iphone, android), your best shot to make money is to be one of the first out with a product, then with that experience go freelance.
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.
Striking it rich aside, a "a web-hating programmer" is going to have a lot of trouble these days. No matter what project you start on, completely avoiding the web is one way to make sure that your competitors will one day get the best of you.
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.
This sort of article always struck me as silly. Is it really that surprising that not all developers on the iPhone are wildly successful? Or even that most aren't? Welcome to capitalism -- not everyone will be rich.
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?
One of the more interesting points was that even the developers who everyone thought were getting or had gotten rich seem to be struggling to maintain/repeat their success or got rich for other reasons (such as the guy who bought shares in Palm from the revenue of his game).
I'd hope at this point, anyone looking to get into development is grounded in the reality of the market.
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.
This Cubby guy's biggest expense was the $29k he blew on programmers. It's crazy how many people are trying to make money on the iPhone and are either not programmers, or don't have the drive to actually learn how to write code.
[+] [-] phsr|16 years ago|reply
[+] [-] credo|16 years ago|reply
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>
[+] [-] dpilone|16 years ago|reply
[+] [-] gcheong|16 years ago|reply
[+] [-] ujjwalg|16 years ago|reply
[+] [-] Periodic|16 years ago|reply
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.
[+] [-] ajross|16 years ago|reply
[+] [-] jungans|16 years ago|reply
[+] [-] snorkel|16 years ago|reply
[+] [-] pxlpshr|16 years ago|reply
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 $.99 is simply not sustainable.
[+] [-] ssharp|16 years ago|reply
In 2007, "Pirates of the Caribbean 3" grossed nearly a billion dollars while "There Will Be Blood" never even got to 100 million. "Two and a Half Men" is a hit TV show and Arrested Development is off the air. The Arcade Fire were lucky to go gold with "Neon Bible" while Fall Out Boy went multi-platinum the same year.
Given your logic, nobody should bother creating anything of quality. Sometimes quality is successful, sometimes its not. But it's always regarded.
[+] [-] imack|16 years ago|reply
I have this hypothesis that there might be a market for apps that cater to a more female market. Most developers being guys, I figure anything a male would be interested in has been created, whereas female-oriented apps might still have a market. Anyway, just a thought.
[+] [-] antirez|16 years ago|reply
So here the strategy is simple: just develop stupid things that takes a few days. If you check the top apps, half are not hard to code at all but stupid things that people are willing to buy.
So instead to write a smart, interesting application that costs 100,000$ it's better, I think, to write 20 applications costing 1000-3000$ each.
[+] [-] kakooljay|16 years ago|reply
[+] [-] coglethorpe|16 years ago|reply
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.
[+] [-] algorias|16 years ago|reply
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?
[+] [-] eugenejen|16 years ago|reply
[+] [-] credo|16 years ago|reply
[+] [-] hristov|16 years ago|reply
[+] [-] gcheong|16 years ago|reply
[+] [-] jsz0|16 years ago|reply
[+] [-] absconditus|16 years ago|reply
[+] [-] rauljara|16 years ago|reply
[+] [-] fjabre|16 years ago|reply
The only real winners in this whole game have been Apple and iphone dev consultants.
[+] [-] dminor|16 years ago|reply
[+] [-] unknown|16 years ago|reply
[deleted]
[+] [-] psyklic|16 years ago|reply
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.
[+] [-] nearestneighbor|16 years ago|reply
[+] [-] harpastum|16 years ago|reply
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.
[+] [-] catone|16 years ago|reply
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?
[+] [-] gcheong|16 years ago|reply
[+] [-] ssharp|16 years ago|reply
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.
[+] [-] unknown|16 years ago|reply
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[+] [-] haseman|16 years ago|reply
[+] [-] jroes|16 years ago|reply
[+] [-] rscott|16 years ago|reply
[+] [-] easp|16 years ago|reply
[+] [-] mattmaroon|16 years ago|reply