
If you're trying to make money, dump your iPhone strategy - justinweiss
http://www.fiercedeveloper.com/story/if-youre-trying-make-money-dump-your-iphone-strategy/2009-06-10
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haseman
In short, what this guy is saying is correct...but only for major mobile
software houses. (Which I assume you guys aren't part of)

Here's the longer version:

I've been a mobile software developer for 6 years. I've written software for
BREW, JavaME, Android, to name a few. I've also published a book about Android
(msg me if you want to know the title) so I have a little experience on the
subject.

What we're seeing, essentially, is new money vrs old money. In the old way,
one's relationship with the carrier was valued above all things. They were the
gatekeepers of their respective markets. What they said went, and that was
final. But it wasn't always this way.

In the beginning of the BREW and j2me world, it was a free-for-all. Anyone
could get rich with a ring tone or wallpaper app. Over the years, however, the
big players crowded out the amatures and what's left is a pretty stable system
where only the well connected can make any serious money. Deck placement and
promotion matter above all else and it's through these two things that the
carriers control their app stores.

Fastforward to today, and what you'll see is what was happening in the early
days of the GetItNow/MediaMall. A few amatures are getting rich and the big
guys have to slug it out with every nerd in his or her basement...The lesson,
however, is that it won't always be this way. So make you're money, corner
your market, and build your start up right now. The market is, in my humble
opinion, stabilizing away from the basement programmer and back to the big
guys.... The days of fart apps at #1 are passing, but that doesn't mean you
can't make money on it in the mean time.

~~~
newsio
Out of curiosity, what do you think of the fragmentation of mobile platforms,
that makes it difficult to develop for/port apps from iPhone -> BB, etc.?

What's your medium-term view of the market, over the next 1-3 years? iPhone is
the buzzword now, what about the potential of BB/Pre/Ovi/Windows Mobile?

~~~
haseman
You're straying into consulting land ;-)

In short:

Win Mo: Stable, no big wins or losses

Brew: uh, yea no comment (I think the developers conference was canceled)

Java ME/BB: Blackberry needs to innovate towards the pre/android or it's going
to stagnate and die. Java ME needs to die. Haven't had time to look at Java FX
yet.

Pre, I think, will go like Android did(except it looks a lot better) there's
HUGE hacker appeal but it will probably take 2 years or so to take off.

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jasonlbaptiste
Spam, propaganda, and not true.

"While I know that there are thousands of apps you can buy for your
iPhone/iPod touch, I've never actually met anyone who's ever bought one."

Did you forget about 1 Billion+ App downloads? Sure, a large portion of them
are free. Those free apps can make money with ads+incentives for a freemium
upgrade to the "Pro" version. Yes, Apple is harsh with developers. Yes, the
iPhone app game is way harder than it seems. I'd rather deal with Apple's
process as a small dev, than dealing with carriers and their nonsense. Do they
even want to deal with someone making a game on the weekend for fun? Probably
not. GTFO and don't come back.

~~~
haseman
I think you have to look at his audience before you judge what he's saying. If
you're a major company the Apple app store is a really bad play right now...if
you're nimble startup then what he's saying is crap. Your overhead is much
lower so gambling 70k worth of your own development is different than the half
million it costs to make a major mobile app.

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tylermenezes
So a guy who works for a company promoting non-iPhone development says we
shouldn't develop for the iPhone? Right, I should listen. Because, you know,
everyone I know with an iPhone just downloaded a few trials and gave the
really expensive device to their kids.

I also get the feeling that there were some fake accounts involved in getting
this to the homepage.

~~~
ibsulon
Alternatively, people looked at it and thought it was so absurd that everyone
had to read it. :)

------
justinweiss
I've rarely heard someone argue so strongly for inserting middlemen back into
the supply chain. It's interesting, in a twisted sort of way.

~~~
amr
And I don't understand his complaining about EA not charging more for their
game. Is he saying they are not making money? Or that they are not making
_enough_ money? It is odd to see someone argue that.

~~~
haseman
Honestly, they're probably not making any money. I'm sure they're mostly
setting themselves up for holding market share in the future. But yea, it's
still odd.

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jsz0
Honestly I have a hard time taking anything this gentleman says seriously when
he starts his article saying he doesn't know anyone who buys iPhone apps. How
can you have an accurate view of the iPhone app market if you don't even know
any consumers who use it? I know plenty of people who buy LOTS of apps. I've
personally probably spent over $100 on apps of different kinds.

"Instead, EA had to sell it to me for $5.99. What a shame."

Yea it's a shame consumers are benefitting from competition and getting higher
quality software in the process. I would think by now software developers
would understand if you don't offer me a good product at a good price I will
just steal it and you will get $0. Be happy with my $5.99 because you could
have much less with this attitude.

~~~
ankhmoop
_Be happy with my $5.99 because you could have much less with this attitude._

Your $5.99 isn't enough to support developing anything but a _cheap_ , top-50
hit of an application. Thanks to remarkably steep price competition and
remarkably poor discoverability, the app store very much lacks anything
resembling a long tail.

We sold a small app for $1.99, just to compete with similar apps in the space.
If we'd sold our app for $5.99, we would have made a tidy profit on solid
initial sales and moved on to make another application. However, at the $5.99
range we're competing with much more polished and comprehensive applications.
This left us barely covering our development costs at the $1.99 price, with
our sales rapidly declining after the first month.

~~~
fauigerzigerk
_Your $5.99 isn't enough to support developing anything but a cheap, top-50
hit of an application_

I can hear traditional airlines grumble: "For 50 USD/EUR we can't even serve
proper meals, assign seat numbers or use central hub airports"

~~~
ankhmoop
Except that for $1.99, we can't even afford to invest in writing a small,
useful application -- and we're a very small, very low-overhead company.

------
snewe
He basically concludes that non-iPhone development has huge sunk costs (i.e.
less competition), so it is where the money is:

"The bar is set too low. Anybody can play in the iPhone space. All it takes is
an idea and few thousand dollars to pay someone to build it. The entire
process, from idea to launch, takes only six weeks.

In my world--the Sprint, T-Mobile, Verizon, AT&T world--a game costs $50,000
to build and $100,000 to port."

~~~
wvenable
The genie is out of the bottle. I don't know who's paying $25.00 a game on
their mobile phone -- but if they did it a year ago, they aren't going to do
it now. Now that has Apple come along and changed the market, every user is
going to compare the experience and price and decide that what came before was
bullsh*t.

~~~
ankhmoop
More likely: the ridiculously steep, unsustainable price competition drives
most smaller players out of the market, remaining companies take advantage of
reduced competition to raise prices back to a relatively sustainable level.

~~~
fauigerzigerk
But who determins what a sustainable price is? What you say could be used as a
general purpose excuse for never lowering the price of anything. That cycle of
lowering prices, shaking out some players leading to consolidation leading to
higher prices leading to more competition leading to lower prices is just how
things work in capitalism.

I'm just not sure if the price for the user has actually dropped or just
shifted towards paying Apple.

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tjmc
What a blatent, self interested diatribe. What's his complaint exactly? That
the platform is too easy to develop for? That middle men like him aren't
getting a cut of the action? That we don't have to deal with the dinosaur
carriers directly anymore? Sounds like a good thing to me.

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drewcrawford
Part of the fail here is comparing the iPhone 3GS to BREW devices is like
comparing a Mac Pro to an Apple ][. As hardware gets better, the same piece of
software becomes less and less valuable.

True, you're always going to have people playing Scrabble. But in this brave
new world of accelerometer location-aware streaming video social network 3D
compass games, Scrabble simply can't command the $25 it used to.

Developers are just scratching the surface of what can be done with the
hardware in a latest-gen smartphone. 2D bitblitting and 16K WAV SFX aren't
going to pull in millions anymore. Sorry to crash your monopoly.

------
orangecat
So an oligopolist is whining that he now has to deal with competition, and I'm
supposed to feel for him? Sorry Konny, welcome to real capitalism.

~~~
fauigerzigerk
I was thinking something similar. But my question is this. Are these lower
prices the result of a better functioning market, or are profits just shifted
away from developers to a new even more powerful middleman, which is Apple? Do
scrabble playing customers end up paying less overall, including hardware and
software? It's not a rethorical question. I really don't know.

------
robryan
Very much a self interest article.

As for EA's pricing, there's no rule that says you need to make a profit off
every product you put out. It wouldn't surprise me if a big games company made
free iPhone versions of there games to drive interest in the console/ PC
versions.

------
octover
When I first told an acquaintance here in Sweden about the terms Apple has, 45
days to make payment and 30% cut, he looked shocked. Turns out cause that is
such a great deal for developers compared to what you will get from any other
player in the industry. Sure you might be one of 50 games on T-mobile and able
to charge $10 for the smallest things. Truthfully it's a good price for the
costs involved, the percentage the carrier takes and the middlemen to even get
to the market.

People need to realize about the iPhone is that while the App Store is great,
in some regards it makes people think it's the end-all-be-all cure. That there
is no need to have a polished well designed application and that marketing
will just take care of itself. I think the race to the bottom will be solved
once the gold rush is off and developers realize they still want to be able to
eat. Right now cause too few knew what the market would look like priced their
apps too low and it was a snowball effect. The market will rebound, users will
either pay for quality or go without.

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geuis
I personally know 2 developers who have made in excess of 6 figures, and one
of those over $1 million. Yes, he buys the beer. =)

As @jasonlbabtiste points out, there are over 1 billion apps downloaded. Yes,
the majority of those are free but many, many, many are not. Even if only 20%
of all apps are paid for, at the minimum of $0.99, that's over $200 million
dollars. That number is of course much greater, considering that apps for more
than $0.99 DO sell, and quite frequently.

So this guy's rant is just that, a rant. Completely unfounded and only based
on personal opinion.

~~~
boucher
It's much less than 20%.

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quizbiz
I misunderstood the title at first to suggest that if you want to make big
money, you can't have expensive gadgets...

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zaidf
Could it be because the iPhone's removed the need for people like you?

