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You need a lot of skill and a lot of luck, but it is possible to make money as a solo developer. You don't have to price your app at $0.99 either. It is possible to have a stable number of sales every day at a higher price.
 
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So the lesson here is to totally change one's strategy for coming up with new product ideas from "something really useful" to "something totally pointless." Want to know why we haven't sent astronauts to Mars? It's because people keep spending money on stupid stuff. Pity we can divert that brainpower to bigger problems.

So true. You don't know how much this bothers me.
 
Can you sustain a business based on the app store?.. maybe, if you can keep your costs low. However I still believe the greatest benefactor from the App Store is the independent developer.

I'm with InMotion Software too (see posts by bghoward). For those of us developers with an office and employees to support, the confirmation that the number 2 app of all time earned something around $600K is disappointing. It forces us to re-calibrate our thinking. Large investments typical of the software world at large, developed in traditional ways, are virtually impossible to sustain in the current AppStore marketplace. The fun, challenging, and ultimately rewarding task ahead is to figure out how to make it work.

We continue to see the AppStore as an exciting dynamic marketplace that provides great opportunities for new players. But it, like any free market is efficient. That's another way of saying developers will eventually find a way to consistently and profitably produce and effectively promote what people will buy, or find something else to do with their time and money. InMotion is fortunate to be recently cash-flow positive, with sales growing slowly every week, but I suspect we are in a very small minority.

You've heard the old adage: "Be careful what you wish for, you may get it." In the end consumers will get the AppStore they vote for with their dollars. Don't forget the market maker's strategy may be market penetration of its hardware platforms. This strategy, whatever it may be, or however it may evolve, will impact the level of investment and quality of apps produced in the long run.

www.InMotionSoftware.com
 
I'm surprised at everyones optimistic attitude about the app store after seeing these numbers. It is shocking and discouraging.

I have heard the analogy of the California gold rush used to describe the app store and I can tell you that these numbers confirm to me that the app store is an unsustainable bubble that will either have to burst or will completely dry up in the long run.

Just to give you some background on myself, I quit my job 8 months ago and started an iPhone app company. Since then we have released about 7 apps on iTunes. Including our latest app which has an investment, well lets say most people could have easily paid off their mortgage with what we spent (and this is only with 3 employees total).

Think about it, these are the 20 MOST DOWNLOADED APPS. These are the best of the best, most of which came out day 1. With 30,000 apps on the iTunes store what are your chances as a developer making into the top 100 list, much less the 20 most sold apps?

The MOST you can hope for in your wildest dreams for a paid app is 1,000,000 downloads? And if your app is not on the top 20 of all time list, you have sold somewhere south of 380,000 copies. With these numbers I would be shocked if games like iDracula even made 50k after expenses.

To put things in perspective, the average app sells about 15 copies a day at an average price of $1.64.

The price to investment is completely out of whack on the app store. Here is another thing to think about. I estimate that you can buy every app on iTunes for about $75,000. Do you really believe that entire value of investment dollars on the app store is only 75k? Our last game cost a lot more than 75k to develop... and we haven't even made the top 100 list yet. On the other hand how much would it cost to buy every song on iTunes? Every Movie?

It cannot be sustained in the long run, just something to think about before jumping on the bandwagon.


Pulleeeeze. Sounds like Dvorak. "Cannot be sustained"? To the contrary, it's a platform and will continue to grow exponentially.
 
This makes me want to be an iPhone developer!

It really shouldnt. These the sales figures for all time selling apps out many 10,000's of apps.. saying that is almost like saying, musicians sell lots of records therefore I want to learn to play the guitar
 
I'm surprised at everyones optimistic attitude about the app store after seeing these numbers.

It cannot be sustained in the long run, just something to think about before jumping on the bandwagon.


You are living in fantasy land if you think most other businesses in the world are able to turn a better profit faster. Try working in an industry that actually manufactures something. You're happy if after 3 years you're finally in the black, and enjoying a 10% margin on your products, with millions invested in a hell of a lot more than the principals time.

Ridiculous.
 
I have got to figure out how to write the code for the apps I have in my head. :mad:
 
Pulleeeeze. Sounds like Dvorak. "Cannot be sustained"? To the contrary, it's a platform and will continue to grow exponentially.

There are more than 30,000 apps today, growing at just less than 6,000 per month. If that continues apace, by year end there will be roughly 80,000 apps on the AppStore. Yes the platform will grow and grow amazingly. That's Apple's genius. They earned an estimated $61,000,000 gross after payment of royalties on 4th quarter 2008 AppStore revenue, plus whatever hardware sales were driven by the mere existence of the AppStore. Stories of overnight millionaires will no doubt continue to attract thousands of new developers. That looks pretty sustainable to me.

Now examine "sustainability" from the developer's standpoint on the AppStore of today: If you group all paid apps into "buckets" according to daily royalties paid to developers, by far the most common buckets will lie in the range of $12 to $24 per app per day. Use the upper figure and assume sales will continue for a year (both of these assumptions are optimistic). This comes to $8,760/year. Not bad if you consider it extra income, but if you run it like a business and allow for overheads (18%) and the expectation of a modest profit (15%), that leaves a development + updates budget of $5,869, and $0.00 for promotion.

Let's say we don't hire 3rd world programmers and it costs $45/hour to pay employment taxes, benefits like health insurance and vacation, and a moderately competitive wage in the US (say about $68,000 in salary). We can afford to budget about 3 weeks total per app. So **commercially sustainable** development for the vast majority of developers means: deliver 18 bug-free, high-quality, feature-full, innovative apps a year per programmer. If and when you get a "hit", pour a few more dollars into the app to sustain or increase sales.

Here's another inconvenient truth: fewer than 2% of paid apps will earn enough money to recoup a combined development and promotion budget exceeding $50,000, or about 28 person-weeks of effort - not big numbers in the application development world. Not too many more than 1/2% of apps will make it onto the top 100 list or a promoted list. A small handful of these "exceptional" apps will earn a few hundred thousand dollars.

Keep in mind these numbers will come under even more pressure when the AppStore has 80,000 instead of 30,000 apps. I happen to think the AppStore is an *incredible* opportunity for the small developer, particularly to get into the game industry, but I wouldn't suggest any romantic ideas about earning a million dollars overnight. Success will require innovative approaches to structuring the business, rethinking development processes, and even how promotion is accomplished. Just good old hard work seasoned with a smidgen of good luck. Eventually those who can't make it will leave.

Draw your own conclusions about who will win, who will lose, how customers will be served, and how sustainable the business model is for the average developer.

www.InMotionSoftware.com
 
I really appreciate working devs taking time to post here.

I find the math being done to estimate things like percent chance of selling 10,000, to be overly simplistic, with a lot of factors assumed to be static forever.

It is wise to remember that the user base of 18 million devices is growing very quickly. During one conference call, Apple disclosed, iirc, that they were selling 50,000 3G iPhones a week. Perhaps this has slowed with the economy, but the iphone ecosystem is still very young and growing fast.

The user base, the App Store, and impact of new HW features on app development are all very much guaranteed to change. The app sales playing field will change with them.
 
Its funny really, there have been symbian and windows mobile phones out there for years and there wasn't an easy centralized place to get your apps.

The Handango store has been around for about ten years.

The big difference is that other makers didn't try to control and profit from the sales of every app. Imagine the screams if Microsoft had made a single WM app store before now.

However, Apple has indeed opened the floodgates for other OS/maker based stores. This could have repercussions they didn't expect. Reminds me of the supposed Yamamoto quote:

"I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."
 
pocket god

ah, yes, okay, now i don't feel like a pansy toying around w/pocket god while i'm waiting in line at starbucks in the morning. it somehow lessens my stress about the 30 minute long line when i throw down coconuts at those things.
 
The only apps I've found that I actually use are:

Cycorder, Winterboard, SafariDownloader, Mobilefinder, Netatalk

1. Airsharing (though I picked it up while it was free, I'd have spent $100)
2. Fieldrunners (most addictive game since SMB3)
3. Tris (also free, & before EA nicked it, and worth every penny)
4. Netshare, once in a blue moon.

All I really want, is a nice, simple little midi piano roll editor for writing & arranging tunes on the go, syncable to the workstation somehow. I've got a twelve year old install of Digital Orchestrator Plus that I keep on a motion tablet pc just for writing on the go. It could easily be a direct copy of that program. No keyboard req'd. God how I'd love to ditch that contraption and just conveniently flesh out ideas on my iphone instead.
 
I really appreciate working devs taking time to post here.

I find the math being done to estimate things like percent chance of selling 10,000, to be overly simplistic, with a lot of factors assumed to be static forever.

It is wise to remember that the user base of 18 million devices is growing very quickly. During one conference call, Apple disclosed, iirc, that they were selling 50,000 3G iPhones a week. Perhaps this has slowed with the economy, but the iphone ecosystem is still very young and growing fast.

The user base, the App Store, and impact of new HW features on app development are all very much guaranteed to change. The app sales playing field will change with them.

Thank you. You make good points. I do agree with you that the marketplace is dynamic. The AppStore provides unprecedented opportunities along with interesting challenges. The 3.0 firmware promises to shake things up a bit. I don't rule out Apple changing submission requirements to control app growth, or even creating a "premium" app category. Who knows for sure. So, obvious simplifications aside, what I describe in my previous post is not far off from what a typical developer can realistically expect today. Whatever the future holds, it should be a fun ride for developers and users alike.

Yes the install base is amazing, but examine the dynamic a little deeper. Take the install base of 18 million devices growing at 50K per week. That's an impressive 2.6 million new devices by year end, or about 14.4% growth. Some analysts have predicted user appetite for paid apps will grow 10% this year on a per device basis. Combine these two elements of growth and we come up with 15.8% greater demand for apps year-over-year. 2008 ended with about 20,000 apps, arguably it will be about 80,000 by year end 2009. That's 400% growth. So growth in available apps will outpace growth in demand by a factor of 25. Yes, the analysis if over simplified, but if the actual number is 10 or 15 or even 20, it does not substantively change the points, which are: (1) it will be tougher to get app exposure as time goes on, and (2) the "typical" app will earn less money than it does now. So successful developers will have to find new ways to stand out.

www.InMotionSofware.com
 
The Handango store has been around for about ten years.

The big difference is that other makers didn't try to control and profit from the sales of every app. Imagine the screams if Microsoft had made a single WM app store before now.

However, Apple has indeed opened the floodgates for other OS/maker based stores. This could have repercussions they didn't expect. Reminds me of the supposed Yamamoto quote:

"I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."

Actually, Apple, by releasing a dev kit and helping developers create qualified iPhone apps is basically following the MS consent decree that they were unwilling to do without government intervention. MS was keeping key parts of their Windows OS private so their programs would be better. Apple is, on the other hand, keeping some parts of the iPhone OS private so that the developers don't bring down the OS. Apple is not selling any additional software on their own. There is a case to be made that they should not be able to stop people from creating apps that use certain features, but to Apple's credit, they are not excluding others just so they can profit with a monopoly on the feature.
 
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