

How We Built iTeleport into a Profitable Business on the App Store - jsherwani
http://blog.iteleportmobile.com/quality-over-quantity-how-we-built-iteleport?c=1

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chc
What they don't mention: They got in during the "gold rush" period on both
platforms. That is a huge competitive advantage that can't be replicated. I'd
be surprised to see someone who released an iPhone app a year ago who could
show similar numbers.

Though I do think it's very cool that they're posting these stats. This kind
of openness is uncommon.

~~~
hboon
But someone who made it in during the gold rush period should only have an
advantage if they made it into the top 100 category or store-wide chart.

What kind of advantage would they have otherwise?

~~~
jerrell
There are some App Store sales advantages which stem from simply having sold a
large number of copies. For example:

1\. More ratings (shown as numbers next to 1-5 star ratings) - Help convince
potential buyers that your app is significant

2\. More reviews - advantage as with #1, but also higher chance of having at
least 1 review in a larger number of countries.

3\. Recommendations in iTunes - On the iTunes interface to the App Store,
users are shown 'People who bought X also bought Y'-type recommendations. High
sales increase the chance of your app featuring in these.

So by getting in early, you sell copies through being the main/only product
choice in your area. Then, when competitor apps arrive there are some residual
advantages like these which place you ahead of the pack.

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jacquesm
What strikes me is this though: Ok, they are making good money and that's fine
with me. But if this would be an open platform they would not have been able
to compete with some open source port of the VNC client for that machine.

The _only_ reason this works is because the platform is somewhat closed.

Closed platforms => closed source => profits

Open platforms => open source => no profits

(or at least not for 'utility' level stuff like this).

Once you've shelled out the money for that ipad you're good to go and spend
some more on applications, but an open source developer is not expecting a
return on his investment so will not be shelling out money for development
tools.

If it works like that, we'll see what happens when android powered pads are
going to be available, I expect that 'apps' like this will not be making any
money at all.

~~~
mechanical_fish
_they would not have been able to compete with some open source port of the
VNC client_

That depends on the culture of your open platform. The Mac OS is an open
platform -- in the sense that you can compile and run any open source software
you want on a Mac -- but there are quite a few Mac apps that successfully
compete against open source "equivalents". Consider Transmit: An FTP/SSH/EC2
app. Or Textmate: A text editor for programmers.

It's not the platform that matters. It's the customer base. It doesn't matter
how many users the platform has; what matters is whether they have money and
are willing to spend it for higher quality, less wasted time, greater ease of
use, or some other value that your software provides.

I'm not sure there's any first-order reason why people couldn't develop a
really polished VNC client for, say, Linux and make money on it. There are
just second-order reasons: Linux is a fragmented software platform (many
distros, many moving parts), running on incredibly diverse hardware, with a
culture that actively discourages charging money for software and has
therefore built little or no infrastructure or culture to support such
business. Most difficult of all, Linux must compete with the Mac, which _has_
built a culture of paying for quality and has used it to vacuum up many of the
most valuable desktop-software customers.

~~~
jacquesm
Transmit I would consider 'at risk', of having their lunch eaten one of these
days, textmate (like ultraedit) has a loyal following and will be here for the
time being.

If it was as easy to apt-get some package on to the mac as it is to install
stuff on most linuxes (or 'yum' if that's your flavour) I think that would
change matters considerably.

The initial hurdle to deployment is the hard one, if there would be a package
manager with a sizeable repository installed by default on OS/X I think it
would make life much harder for those earning a living writing software.

Just like 'tucows' changed the world of closed source utilities for sale on
the PC platform, only then a bit more dramatic because the vanguard would
already be pre-installed.

Openness includes removing barriers to getting at stuff, not just that it is
'open' to modification, I suspect the majority of the 'hackers' on this forum
have never modified a line of code in most of the stuff they download and
install.

~~~
loewenskind
I certainly hope you're wrong. Writing software is one of the few things left
that a normal working person can get into and become financially independant.

Personally I expect to just see the prices of software to come down on Mac and
Windows but start charging on Linux if more people start using it. A couple of
bucks is no big deal if the software is easy to buy.

~~~
jacquesm
One of the bigger drawbacks to the whole open source movement was the inroads
that it made on -surprise- people like me that made a good living selling
software they wrote.

For every package on the windows platform there were suddenly 3 or more
competitors available, 90% feature complete in a race to the bottom for
marketshare, which they all got and then suddenly figured out they had to make
money somehow.

And then they imploded, but the damage to the market was done, everybody
expected 'free'.

Apple has bucked that trend to some extent, but I don't think this was a
reversible process, all software, including operating systems and so on, with
the exception of niche code and in-house software for deployment in a company,
some firmware or as a back-end for a service will be free. And even some of
the latter will be free (see 'reddit').

So, I changed tack, way ahead of the pack I aimed at a service driven income
stream rather than selling bits of software.

My then partner Michael saw it coming with great clarity and together with
another guy called Paul (who was founder of one of the first ISPs in NL) they
changed my future in a fairly dramatic way.

So if you haven't seen the elephant yet, maybe you need a higher ladder, but
he's coming for sure. None of the 'old' ways of making money can be taken for
granted. Read 'being digital' by Nicholas Negroponte if this hasn't convinced
you.

It's old (by internet standards) but it is in many ways a visionary book. Far
more so than Gates' 'the road ahead'.

~~~
loewenskind
I understand what you're saying, but I'm not sure it will play out exactly
that way. So many movies/songs were being copied that some people were
speculating that no one would be willing to pay for movies/songs at some
point.

Then iTunes came along and showed that actually people just wanted (a) to not
pay such a rediculous amount and (b) to be able to conveniently get the
product. $15 for a CD that has just one song I want? Nah, I'll just download
it. $1 for exactly the song I want and I don't have to mess around with
torrents and shady software and sites? Done deal.

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maukdaddy
This is excellent data to see. I'm tired of paying for crappy $1 apps and will
gladly pay extra for something that works well and looks great.

Good to see that niche markets exist in the app ecosystem that support pricier
apps.

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CamperBob
If there's a killer app for the iPad, this is it. I'm not surprised to see
them doing well at a $25 price point. It's worked well for me for a long time,
on both the iPhone and iPad.

