Apple Announces Record $1.1 Billion App Store Sales During Holiday Season

[Coder0101]

After this post, I am going to excuse myself from this conversation. It's getting a little tied up in minutiae that takes away points both of you are making. App store success isn't binary. Skill doesn't guarantee success and neither does luck/marketing. It's a combination of the aforementioned and many other things. The app store mirrors pretty much any other industry. It follows the old 80/20 rule. 80% of the money goes to the top 20% of the market.

/prays no one gets pedantic about the percentages

As for bad apps making money? King's portfolio imo (completely subjective cuz lots of people love King). They've taken 1 idea, run it into the ground, and fortunately for them, all the way to the bank. Not much skill involved in rehashing the same app over and over. But they do market the Bejeebus out of them.

Now combine your ideas and hug it out.

Nothing to add here. That's why i replied !

 

[Rogifan]

Convenient timing

Possibly true, but not necessarily. But I imagine that is what the goal of Apple's announcement was, to cause many to assume it directly correlates to hardware sales. However, it doesn't necessarily correlate, but I'm quite bullish and expect Apple to beat earnings expectations. I just hope AAPL hits sub-$100 before truly turning around! lol.

This announcement has nothing to do with Apple stock price. Apple sends out a press release on App Store sales every January. Last year it came out on Jan 8. In 2014 it was Jan 7.

 

[acidsoul]

I'm leaving my day job this month, and as a hobby programmer, should I try being an iOS app developer?
There are some apps I'd love to use on my phone but can't find on the app store, maybe I should make them, or maybe it's just because the app store search is lousy.

 

[naeS1Sean]

And what exactly is your point by posting that?

You can't figure it out?

 

[HenryDJP]

You can't figure it out?

Oh the usual snide little witty responses. It was more a rhetorical question. Too bad you couldn't figure THAT out.

 

[npmacuser5]

Over $1B in app sales over two weeks? I wonder if Android can (or could ever) make that same claim? lol

Good news for Apple. I am not sure how Android could even account for a number given all the different manufactures and app stores. One example, Amazon, notorious for not reporting sales. Their devices are all Android. The point is not about Android but how well Apple is doing and for that good news.

 

[prasand]

This announcement has nothing to do with Apple stock price. Apple sends out a press release on App Store sales every January. Last year it came out on Jan 8. In 2014 it was Jan 7.

I see. Thanks for that information (truly), I'll keep it in mind next year.

 

[Popeye206]

Over 90% of this money is made by only 1% of all apps. So - being an iOS developer is NOT the solution if you want to make money. You have to be ONE of the 1% (or even less)... and you need a ton of luck and marketing money!

I wanted to chime in on this discussion started by Coder... Anyway... what Coder says is probably pretty close to accurate when it comes to direct revenues from the Apple App Store. Remember, many apps are there for other purposes and help support eco-systems of other products. Like the free apps for cars, airlines, banks, and other products. Developers make money making these "free apps" for companies.

Also... let's go back 20 years. If you we're a software developer you had to have several things to have a successful product. First was a good, stable product. Second was a marketing budget. Third was a sales plan. Then you'd have to go out and find a distributor. Then you'd probably start distribution in your country if you we're lucky enough to be picked up by a distributor, otherwise, you'd have to increase your marketing budget and buy space in a catalog distributor. Repeat as needed for new countries. Note... national distributors would take 40-50% margin of your revenue. Catalogs would take 20-50% depending on the risk they saw and how much you paid up-front for the advertising.

Now back to 2016... Now you have an app. You test it. You submit to Apple and with approval, you have world wide distribution to 100's of millions of customers for 30% margin. Luck, advertising, and exposure is up to you.

 

[bstpierre]

I'm leaving my day job this month, and as a hobby programmer, should I try being an iOS app developer?
There are some apps I'd love to use on my phone but can't find on the app store, maybe I should make them, or maybe it's just because the app store search is lousy.

If there is an app you want to use and it isn't available, write it. At the very least you will get an app that you want to use, which is a decent payoff (but won't put food on the table). There is a chance that someone else might want to use it too, and they might be willing to pay some money for it. That would be a bonus!

If you think you have an idea for an app that others might like but you personally do not have a use for then you are starting to take some risks. The main risk is spending a lot of time developing an app that no one wants to use. If you are your first and best customer then spending that time will never be a total waste.

These statements are on the basis of the statement "as a hobby programmer".

 

[naeS1Sean]

Oh the usual snide little witty responses. It was more a rhetorical question. Too bad you couldn't figure THAT out.

You're so kind and friendly. Thank you. I was only expressing the fact that Apple makes $1000 a second (or whatever the person said it was) and there are homeless and suicidal vets all over the USA, which makes me sad. It's so drastic and doesn't seem right to me. I'm sorry I said anything.

 

[Popeye206]

You're so kind and friendly. Thank you. I was only expressing the fact that Apple makes $1000 a second (or whatever the person said it was) and there are homeless and suicidal vets all over the USA, which makes me sad. It's so drastic and doesn't seem right to me. I'm sorry I said anything.

Your issue is noble it just does not apply here. That's why others are giving you a hard time. BTW... I'm also in NEPA. Hi neighbor!

 

[Nicksd84]

Well, i know over 100 iOS developers and only 1 or 2 of them have been (relatively) successful. Let's revise that to: You either need luck OR marketing money. A good idea is a must, of course. But this alone does not make your app successful.
And - it helps to have Apple on your side to get a worldwide promo.
In addition, competition is tough... for every good idea there are 3-4 remakes quickly. It's not guaranteed that YOUR app is the one to win ;-)

You know over 100 iOS developers?... Daannnnggg

 

[naeS1Sean]

Your issue is noble it just does not apply here. That's why others are giving you a hard time. BTW... I'm also in NEPA. Hi neighbor!

Yeah, I guess. Blah.

Hey

 

[firewood]

I'm leaving my day job this month, and as a hobby programmer, should I try being an iOS app developer?
There are some apps I'd love to use on my phone but can't find on the app store, maybe I should make them, or maybe it's just because the app store search is lousy.

App Store search **is** lousy, so you have to work hard at your market research.

There are many many millions of app buyers, containing customers of many different interests and needs. There's a very long tail of unique app buyers. So if you have an idea for a unique app and can execute it well, it might actually bring in a small amount of hobby income, maybe more than just beer money.

Just don't plan on a bit hit or enough to make a living. The odds for new apps are worse than a spin of the roulette wheel, even for a well executed app. But a portfolio of well executed iOS apps can be a great resume for a new job.

 

[threesixty360]

it always amazes me how much money a company, that is according to all the experts here doomed, can make .....

Good for Apple, good for the few developers that get the lion share of this. Sad that most of it is probably due to IAP which will cause more games that are unplayable without IAP.

I think the thing to remember about Apple and share price is that investors are only interested in how the share price moves, not how profitable the company is. The two things seem related but in the stock market they aren't really. The stock market is really about betting against the perception of others. The "group think" status of Apple is that it's a company based on hit products rather than an iron clad set of business agreements. Companies like Amazon, Google and MS create monopolistic businesses and investors love that.

Apple historically hasn't created a business where customers cant use anything else. Google has, MS has, Amazon has. That's why the stock market is scared and why Apple's doom and gloom is about the timing of when the hits dry up. They all think its going to happen and everyone in the investment game want's to be that one to call it. Because thats how they make the big money.

Personally, I don't care what the stock market thinks as long as Apple can keep making the products I like using. So as long as their profitable its fine by me.

 

[joueboy]

Guilty as charged, I fall on those sales they had during the holidays. I ended up finishing Lara Croft Go which is worth even if I paid for the full price. Perfect timing I had a long break from work so I finished it really quickly. I also got NBA 2K16 which I'm really impressed with the graphics. It's unbelievable how much my iPhone 6S Plus handle such game so smoothly. They said A9X is already a desktop class processor and already beat some some PC's benchmarks. Now we just need a much better controllers but the gap is getting closer.

 

[acidsoul]

If there is an app you want to use and it isn't available, write it. At the very least you will get an app that you want to use, which is a decent payoff (but won't put food on the table). There is a chance that someone else might want to use it too, and they might be willing to pay some money for it. That would be a bonus!

If you think you have an idea for an app that others might like but you personally do not have a use for then you are starting to take some risks. The main risk is spending a lot of time developing an app that no one wants to use. If you are your first and best customer then spending that time will never be a total waste.

These statements are on the basis of the statement "as a hobby programmer".

Thanks for the tip.

I'll have more spare time without the commute and still have my main job at home, so I'll start with making what I want, and I'd I'm lucky it'll make enough money die my dev account.
[doublepost=1452123990][/doublepost]

App Store search **is** lousy, so you have to work hard at your market research.

There are many many millions of app buyers, containing customers of many different interests and needs. There's a very long tail of unique app buyers. So if you have an idea for a unique app and can execute it well, it might actually bring in a small amount of hobby income, maybe more than just beer money.

Just don't plan on a bit hit or enough to make a living. The odds for new apps are worse than a spin of the roulette wheel, even for a well executed app. But a portfolio of well executed iOS apps can be a great resume for a new job.

Thanks for the tip.

It seems the search won't help for people discovering my app, but I'll have my main job, and it's always good to learn new skills.

 

[jimthing]

Hate to throw a spanner in the works, but there are a few financial facts of note here.

- Software (3rd parties) revenue:
40B / ~8yrs = 5B/yr, / 2.6M jobs = ~15k per job over ALL 8 yrs.

Of course a few devs get the real spoils, many get some, others get virtually none.

vs:
- Hardware+other operating income (including % cut of dev) revenues:
ALL Apple, with revenues ~200B per year.

Sure Apple created the system and platform, invest hugely in r&d, and they should be well compensated. And yes, some third-party devs make some kind of living. But the point here is that it's Apple that take the ultimate spoils by several times the amount ALL the third-party devs put together.

It's obvious to say, but Apple (and it's shareholders; if it has any publically left by the time it completes its stock buyback from these spoils, potentially going private, one wonders, at this rate!) designed the system to take the true lions share of the ultimate cake.

They took some risk developing the system, of course (arguably betting the company on the iOS platform), but let's please be under no illusion as to who the real winner truly is, for better or worse.
That's capitalism for you, folks. :-|

 

[acegreen]

Again, a marketing budget is not needed (although it certainly helps, but I never disputed that). There are enough examples of that such as Flappy Bird that rose all the way to the top without ever investing in any marketing. So what constitutes luck is then the question? In the vast majority of games that seem to have been propelled to the top it was sheer skill of implementation that drove the development. It seems like luck that games such as Alto's Adventure get picked to be frontrunners for Apple or go viral, but the truth of the matter is that you don't get noticed or become viral with a bad idea that is bad implemented. In that sense, luck is something that you create. There are very very little examples of truly bad games (bad idea and bad implementation) that rose to the top. That would be an example that luck is a factor. Name me one or some apps if you can that rose to the top purely on luck (and no skills).

I'm surprised that you are a coder and that you do not name "skills" in your list of things that are needed.

I had to jump in here because of how persistent you are with your comments. Are you an app developer? If not, try making an app and you will quickly revise your statements. I definitely agree with the other statements. It takes ALOT of luck and marketing to get anywhere.

This is coming from a guy with two apps! I agree with you that my apps are no genius inventions so maybe if they were I would have better luck. But take for example Chronic, which has been out for 9 months or so. When I started making apps, I had to go through the whole learning curve first so the first few iterations were horrible. But you have no idea how much effort it takes to make a decent app and implement everything in place to generate income. in-app purchases are a royal pain in the butt to implement because of the verification you need from jailbreakers. So to summarize that app has about 5k downloads and generated about $500. But wait then there is Apple's 30% cut (no taxes since its still peanuts)

So you probably thinking, thats because its a timer. And you are partially true! The real problem is getting noticed. When Chronic first came out, I spent thousands on Facebook ads to get some traction. And slowly now with some tricks (like filling the title with keywords) I'm able to get around 100 downloads per day and about $20 in revenue (excluding Apple's cut)

So thats why I tend to side with the statements below. It takes a lot to get to the top charts but it can also be pure luck like flappy bird and others. Unless you are in the top 1% you pretty much are earning peanuts after Apples cut.

Its VERY competitive now and even Facebook ads have become pretty expensive. I'm trying to get some traction behind my second app StockSwipe but will likely need a job so I can get the money to market it.

In conclusion, don't get fooled by what the media and Apple tell you. $1.1B sounds like a lot but minus the $300M Apple took and the taxes those 1% of devs had to pay and its not so lucrative as you think.

Over 90% of this money is made by only 1% of all apps. So - being an iOS developer is NOT the solution if you want to make money. You have to be ONE of the 1% (or even less)... and you need a ton of luck and marketing money!

Well, i know over 100 iOS developers and only 1 or 2 of them have been (relatively) successful. Let's revise that to: You either need luck OR marketing money. A good idea is a must, of course. But this alone does not make your app successful.
And - it helps to have Apple on your side to get a worldwide promo.
In addition, competition is tough... for every good idea there are 3-4 remakes quickly. It's not guaranteed that YOUR app is the one to win ;-)

Only the developers of apps in the top 2% or so make "much money". The other 90%+ make a little pocket change. It's a big gamble... unless you have a major marketing budget or exclusive content. Some companies even spend millions on TV ads.

[doublepost=1452134908][/doublepost]

Hate to throw a spanner in the works, but there are a few financial facts of note here.

- Software (3rd parties) revenue:
40B / ~8yrs = 5B/yr, / 2.6M jobs = ~15k per job over ALL 8 yrs.

Of course a few devs get the real spoils, many get some, others get virtually none.

vs:
- Hardware+other operating income (including % cut of dev) revenues:
ALL Apple, with revenues ~200B per year.

Sure Apple created the system and platform, invest hugely in r&d, and they should be well compensated. And yes, some third-party devs make some kind of living. But the point here is that it's Apple that take the ultimate spoils by several times the amount ALL the third-party devs put together.

It's obvious to say, but Apple (and it's shareholders; if it has any publically left by the time it completes its stock buyback from these spoils, potentially going private, one wonders, at this rate!) designed the system to take the true lions share of the ultimate cake.

They took some risk developing the system, of course (arguably betting the company on the iOS platform), but let's please be under no illusion as to who the real winner truly is, for better or worse.
That's capitalism for you, folks. :-|

Ah couldn't have said it better.

 

[amirite]

This announcement has nothing to do with Apple stock price. Apple sends out a press release on App Store sales every January. Last year it came out on Jan 8. In 2014 it was Jan 7.

As someone who's lost a stupid amount of money in Apple stock recently I feel I should have known that. But it's mildly comforting, thanks.

 

[MacBH928]

Wow...

how things have changed..

Its a long way from 1997 when Apple's total market value was $3.4b (FFI)

 

[peterdevries]

I had to jump in here because of how persistent you are with your comments. Are you an app developer? If not, try making an app and you will quickly revise your statements. I definitely agree with the other statements. It takes ALOT of luck and marketing to get anywhere.

This is coming from a guy with two apps! I agree with you that my apps are no genius inventions so maybe if they were I would have better luck. But take for example Chronic, which has been out for 9 months or so. When I started making apps, I had to go through the whole learning curve first so the first few iterations were horrible. But you have no idea how much effort it takes to make a decent app and implement everything in place to generate income. in-app purchases are a royal pain in the butt to implement because of the verification you need from jailbreakers. So to summarize that app has about 5k downloads and generated about $500. But wait then there is Apple's 30% cut (no taxes since its still peanuts)

So you probably thinking, thats because its a timer. And you are partially true! The real problem is getting noticed. When Chronic first came out, I spent thousands on Facebook ads to get some traction. And slowly now with some tricks (like filling the title with keywords) I'm able to get around 100 downloads per day and about $20 in revenue (excluding Apple's cut)

So thats why I tend to side with the statements below. It takes a lot to get to the top charts but it can also be pure luck like flappy bird and others. Unless you are in the top 1% you pretty much are earning peanuts after Apples cut.

Its VERY competitive now and even Facebook ads have become pretty expensive. I'm trying to get some traction behind my second app StockSwipe but will likely need a job so I can get the money to market it.

In conclusion, don't get fooled by what the media and Apple tell you. $1.1B sounds like a lot but minus the $300M Apple took and the taxes those 1% of devs had to pay and its not so lucrative as you think.

[doublepost=1452134908][/doublepost]

Ah couldn't have said it better.

I'm not a coder myself, but am working with a team that develops a medical device app. In addition, I'm currently recruiting one or a few developers for another health oriented app and associated site.

The point that I'm making (and maybe it hasn't come across clearly enough. If that is the case I apologise) is that of course luck and money are important factors in the current markets. Never did I dispute that. In addition I also never disputed that only a small amount of developers earn most of the money from the App store. That is a clear fact that I would be foolish to attack.

What most of the developers here though somehow don't mention is that good developer skills are key and a a basis to get anywhere at all. That is what I shop for when I recruit developers. Of course I look for those that have issued successful apps previously, but the key thing for me is that they are able to convert my business concepts quickly into functional concepts, prototypes and are quick in implementing changes and testing in a structured way (it saves costs that we can divert to marketing for example). In addition I look for a team or people that is/are well connected or integrated with a design group to support the graphical design.

All of this means nothing if you are not noticed in the App Store of course, so indeed luck and marketing spend are factors that increase your chances. But luck is not something that can be quantified up front, and is therefore not something I can take into account when I need to have an app created. Marketing money is much more effective, but frankly not as magical as people make it out to be. The fact of the matter is that app marketing is nowadays much a function of connections and networking and getting mentioned in the right places (blogs, Facebook etc). Often the process then speeds up as it did for most of the featured apps in the App Store (you need some traction before the Apple curators will consider you). So, what I look for in addition in developers is a track record of app placement that is based on a good set of connections. Building a network such as this is also a skill and it is a tangible factor.

I do realise that in my field of work (health and medical devices) the mechanics are a bit different than they are in the games world of the app store. But if you speak to the well established and well-earning developers in the app store, I'm sure they would mention that first and foremost a good and well implemented app is what makes or breaks your success. The thing that I have been mentioning here all along is that with the best of luck and all the marketing money in the world a crap app would still be that. A crap app, that consumers very quickly will review down and will disappear from the charts. There are examples of crap apps making it to the top and earning a lot for a while, but as a business manager I would rather invest in someone that has a good track record of quality apps, than in someone that has been lucky once or a few times with buggy apps.

 

[tomsamson]

If Apple would also release the numbers how much (few) all apps make throughout the year which are not in the top 100 in the US, it would be a bit more clear what is actually going on in the App Store.

 

[acegreen]

I'm not a coder myself, but am working with a team that develops a medical device app. In addition, I'm currently recruiting one or a few developers for another health oriented app and associated site.

The point that I'm making (and maybe it hasn't come across clearly enough. If that is the case I apologise) is that of course luck and money are important factors in the current markets. Never did I dispute that. In addition I also never disputed that only a small amount of developers earn most of the money from the App store. That is a clear fact that I would be foolish to attack.

What most of the developers here though somehow don't mention is that good developer skills are key and a a basis to get anywhere at all. That is what I shop for when I recruit developers. Of course I look for those that have issued successful apps previously, but the key thing for me is that they are able to convert my business concepts quickly into functional concepts, prototypes and are quick in implementing changes and testing in a structured way (it saves costs that we can divert to marketing for example). In addition I look for a team or people that is/are well connected or integrated with a design group to support the graphical design.

All of this means nothing if you are not noticed in the App Store of course, so indeed luck and marketing spend are factors that increase your chances. But luck is not something that can be quantified up front, and is therefore not something I can take into account when I need to have an app created. Marketing money is much more effective, but frankly not as magical as people make it out to be. The fact of the matter is that app marketing is nowadays much a function of connections and networking and getting mentioned in the right places (blogs, Facebook etc). Often the process then speeds up as it did for most of the featured apps in the App Store (you need some traction before the Apple curators will consider you). So, what I look for in addition in developers is a track record of app placement that is based on a good set of connections. Building a network such as this is also a skill and it is a tangible factor.

I do realise that in my field of work (health and medical devices) the mechanics are a bit different than they are in the games world of the app store. But if you speak to the well established and well-earning developers in the app store, I'm sure they would mention that first and foremost a good and well implemented app is what makes or breaks your success. The thing that I have been mentioning here all along is that with the best of luck and all the marketing money in the world a crap app would still be that. A crap app, that consumers very quickly will review down and will disappear from the charts. There are examples of crap apps making it to the top and earning a lot for a while, but as a business manager I would rather invest in someone that has a good track record of quality apps, than in someone that has been lucky once or a few times with buggy apps.

The discussion you and the others engaged in was about:
Developers earnings
Only the top 1% or so make most of that money
Marketing and luck play a huge role
99% of developers earn peanuts
Apple takes a lions share of the earnings

In this post you are:
Pretty much agreeing with everything we are saying
Talking about developer skills as a good skill to have
Your experience when recruiting developers

The conversation drifted away from discussing earnings but based on your second paragraph I would say we are on the same page now.