Let’s be honest: as a cell phone the iPhone is average. The phone interface can be clumsy, the email handling is substandard (Blackberry being the absolute standard), even the camera (on the 3G especially) is “pull-your-hair-out” slow. The hook that keeps us married to the iPhone 2 and a bit years later? The App Store.
As the App store nears 100,000 entries (see the proof here) I wanted to address the hidden winners and losers – developers. We all know that Apple is making money from the App store, but how are developers doing?
Call me naive or dumb or idealistic, I thought the App store was the perfect get rich scheme. Create some mediocre App, charge a dollar and release. With Apple’s ‘NO REFUND’ policy it would only take a few hundred thousand people to make traveling the country in an RV for a few years a reality. I appear to be very wrong.
A few weeks back, Newsweek had a web exclusive piece titled “Striking It Rich: Is There An App For That?” In the piece it was pointed out that a few developers have indeed made some healthy profits. But the overall summation comes in the following two sentences:
Not only have most sellers failed to turn a profit … even developers with high-ranking games and applications have made far less than commonly thought. Many come nowhere near recouping their investment at all.
Why are developers having issues?
First and foremost is volume. At more than 85,000 Apps and only 20 categories, it can be hard to get an App noticed. Developers not only need to write and publish an App they have to promote it as well. Most programmers I know are really good at writing code, and only writing code. Marketing is difficult for even the most experienced small business manager; now add 85,000 competitors clamoring for App Store face time. Imagine spending months developing an App only to see it buried under the avalanche of other recent releases.
Another reason for the lack of revenue is time. The Newsweek article points to Forrester Research in saying that most Apps take at least six month of full-time development. For most small developers if they don’t have another revenue stream that is far too long – there isn’t that type of credit floating around in this economy.
On top of that Newsweek goes on to show that nearly 60 percent of Apps are rejected at least once. As previously discussed, Apple can be vague and difficult to get a straight answer from when an App is rejected. That means even more time and frustration for developers.
Another reason for developers’ struggles is us. By nature we want the most for our money. The more expensive an App, the more likely a person is to either not buy or to seek out a cheaper (or free altogether) alternative App. The smorgasbord of Twitter Apps is a great example. Newsweek continues:
Over the past 18 months the average price of apps has crashed: now three out of four cost 99 cents or less, according to the tracking firm 148apps.biz, in part because the Big Brands offer their applications for free as marketing tools rather than as revenue streams.
Bigger developers often have the resources to develop an App, give it away free, and make revenue by either placing ads in the App or promoting a sponsor in some other way. ESPN’s fantasy football App is an example of a big company dipping its hand in both pots, charging for the App and then bombarding you with ads. Smaller developers often do not have the relationships with advertisers to make this model work for them.
One and Done
The iPhone also faces the same development challenges the Nintendo Wii has over the years. Developers have to make an App (or game) for a single platform. Game developers had a hard time when the Wii arrived because it was vastly different from the other gaming platforms. So instead of writing a game for a single computer platform and then adjusting the controls, developers had to write two games, one for the PS3, Xbox 360, and PCs and another game for the Wii.
The iPhone has no peer when it comes to development. Developers have to write software within the iPhone vacuum. The iPadlet device coming next year may change that but for now an iPhone App exists for the iPhone only. Even Adobe’s Flash gives a developer the luxury of platform independence, but want to guess the only major computing device not to support some form of Flash – the iPhone. (Adobe has made it possible to port a Flash application to an iPhone App, but this will now be available until Adobe’s next Flash release.) I can see where small independent developers would shy away from that vacuum and concentrate on larger audiences.
In marketing and selling to the masses, Nintendo has had a hard time getting non-gamers to purchase third party games. While Grandma and Grandpa may own a Wii, research suggests they don’t own any other games outside of the Wii Sports (the game that came with the system).
Apple has made a visible effort to promote the App store. But I wonder how many people actually use it. I know personally of two people, retirement age, who both own iPhones. Neither had used iTunes before and neither has purchased any Apps to this point. Maybe it is a generational anomaly but I fear more people are content with the base Apple software than App developers would like.
Software Giants
It is not hard to understand why we purchase computer programs from a handful of really big vendors. With minor exceptions (and large custom programs), we buy our software from Adobe, Apple, Autodesk, Intuit, or Microsoft. The game developer scene over the past two years is heading toward the same model, a few large game developers consolidating and making the majority of video games. The iPhone App store will at some point undergo the same transition.
Apple has to this point been somewhat responsive to changes. Recently they changed their policy regarding in-App upgrades, paving the way for App demos. They have also at least acknowledged the issue with the App certification process. They too realize that this is new territory and I am confident that they can and will change. If they don’t the iPhone will be surpassed by something else. It is the App store that keeps feeding iPhone frenzy. Remember when the Motorola RAZR was released and everyone and their grandmother owned one? That will be the iPhone’s fate if Apple cannot adapt – and quickly.
I Digress A Bit
As I end I want to give some words of encouragement to the bloggers at Deadspin.com, a sports website. I speak solely for myself in this. They are being sued by a former NFL player and former ESPN analyst. Whether or not what they reported was true, I personally have heard stories of the culture of sexual harassment at the ESPN campus, and I tend to believe their version of events.
Bloggers tend to be at odds with newspaper writers and television personalities because there is a perception that we have no one to answer to. We can write anything we want and there are no repercussions to be had. Nothing could be farther from the truth. Legitimate blogs whether covering sports of the iPhone have their readers to answer to. Say something stupid or make something up and we lose readers. Our loss of readers directly impacts our bottom line much swifter and more completely than it would any newspaper.
As newspaper writers (especially sportswriters) continue to assail the “blogosphere” they miss the media world changing around them. As every newspaper company in the land continues to hemorrhage money, it still amazes me how much hate and vitriol seems to exist towards bloggers. Many of us do not have journalism degrees but that doesn’t mean we can’t write well organized and legitimate news articles. We can be as passionate about what write as any newspaper columnist. Those who deride blogs in general can continue to do so, right up until the day they are out of a job.
Blogging is the new information sphere for many of my generation. While knowingly slandering someone is wrong, just because someone writes for a blog does not make everything posted slander. I have my doubts that the lawsuit against Deadspin will get very far, but I hope it sets some precedent. Just because someone is on ESPN does not make them better human beings.
- Josh Tarrats
Newsweek Striking It Rich: Is There An App For That?
Thanks to Jesus Dias at Gizmodo for the Image!
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