
IPhone App Store Developers Aren't Getting Rich - gcheong
http://www.newsweek.com/id/216788/page/1
======
phsr
I'm at StackOverflow DevDays in Boston, and Dan Pilone gave a great
presentation on the iPhone environment. The iPhone isn't really a gold rush,
but there is money to be paid. Figures show that the top grossing apps were
$50, even though $.99 sell more. The fact is, you're not going to be able to
make a $.99 app and expect to make it rich. If you put in hard work, you can
get paid. If Pilone's presentation was online, I would link to it.

~~~
dpilone
I'm really happy to hear you enjoyed the talk. To be clear, it's the top
grossing app in Sept 09 that was $50. My information for that statistic comes
from the Sept. Distimo report available here:
<http://distimo.createsend4.com/t/r/l/hllhtd/yuldzkhi/r>

~~~
credo
Thanks for the clarification. There is a big difference between saying that
one $50 app did well and saying that "Figures show that the top grossing apps
were $50"

As itunes stats show (today), in the top 100 grossing apps list, only three
apps are $50 or higher

------
ujjwalg
I am just surprised by the number of articles written with the exact same
tone. Its like saying, I opened the first coffee shop in XYZ place and made a
heck of money than 10 more coffee shops opened and most of us are barely
making enough money to sustain ourselves. Yes, if you come up with an insanely
good idea which is new and cannot be replicated easily for example: what smule
is doing, no matter what, you will do extremely good. The probability of being
a lucky 1 hit wonder is diminishing because of big brands now in the foray
with a total of 85k+ apps on appstore. Now only the best of the best will
survive who are in it for the long haul and have the patience, persistence and
vision to stay there and develop a business and not looking to hit a jackpot
kind of a mindset.

~~~
Periodic
I think there's something that's different about the App Store, which is
basically the same as on the Internet: the barrier to entry is very low.

In something like the Console gaming business, there is a huge barrier to
entry. Making a copycat game happens, but they are few and far between. It
takes a lot of time and money to create a game. Since it does take such an
investment, everything is generally thought out much more and markets are
analyzed carefully before moving in.

On the iPhone, the barrier to entry is much lower, allowing copycats to crop
up very quickly and flooding the market and driving down prices. With a coffee
shop there is at least a significant barrier to entry, while it isn't as much
so with the App Store.

The same thing has happened on the Internet. It is very hard to make a for-pay
site because there are so many others which are willing to offer similar
services cheaper. This has lead to most sites on the Internet being free or
mostly free. For example, look at on-line newspapers. Many of them aren't able
to turn much of a profit on-line because they have to compete with many many
other sources of news that are free.

You could argue that the more expensive items are better and so will attract
users, but I think the Internet has taught us that a lot of people will settle
for a lot less as long as it is cheaper.

------
ajross
It's a gold rush. The first prospectors do pretty well. The later ones starve.
It's the people selling auxilliary stuff to the prospectors that make a
killing.

~~~
jungans
Except selling auxilliary stuff to the prospectors is also a gold rush...

~~~
stcredzero
I wonder if anyone's done any old-west historical fiction with a mild-
mannered, quiet, but well respected general store owner who is actually a
scheming Machiavellian underneath?

------
snorkel
The longer the iFart apps remain the top selling apps and hard-working apps
get rejected the less interested I am in developing for iPhone.

~~~
ssharp
The common iFart example isn't a reflection of the store, it's a reflection of
culture.

In 2007, "Pirates of the Caribbean 3" grossed nearly a billion dollars while
"There Will Be Blood" never even got to 100 million. "Two and a Half Men" is a
hit TV show and Arrested Development is off the air. The Arcade Fire were
lucky to go gold with "Neon Bible" while Fall Out Boy went multi-platinum the
same year.

Given your logic, nobody should bother creating anything of quality. Sometimes
quality is successful, sometimes its not. But it's always regarded.

~~~
pchristensen
Not exactly. I would say that most people have a highbrow, but highbrow has a
zillion different niches. Everyone's lowbrow is basically the same - farts,
boobs, various impacts to a male crotch, beer, etc.

------
antirez
"Most apps take at least six months of full-time work and cost between $20,000
and $150,000 to develop, according to Forrester Research"

So here the strategy is simple: just develop stupid things that takes a few
days. If you check the top apps, half are not hard to code at all but stupid
things that people are willing to buy.

So instead to write a smart, interesting application that costs 100,000$ it's
better, I think, to write 20 applications costing 1000-3000$ each.

------
kakooljay
Interesting, but not really surprising. Artists & musicians aren't "getting
rich" either.. Is there some reason a normal(ish) distribution wouldn't apply
to iPhone earnings?

~~~
coglethorpe
It seems the same as with any "hit" driven environment. Getting a top-40 song,
a top blog, the next NYT bestseller, or top iPhone app takes a lot of work and
a little luck. There are those who are suited to it, persevere and get that
big break. Then there are a few who just don't get lucky and thousands of
wannabes who fail to execute, be it on minor flaws or epic levels.

I think the best description of the process comes from an editor explaining
why so many manuscripts fail:
[http://nielsenhayden.com/makinglight/archives/004641.html#00...](http://nielsenhayden.com/makinglight/archives/004641.html#004641)

It's harsh, but has given me insight into how the startup world, including
iPhone app startups, works.

~~~
stcredzero
Apparently, even being a drug dealer works the same way.

<http://www.freakonomicsbook.com/thebook/ch3.html>

~~~
coglethorpe
I don't have statistics to back me up, but I'm fairly certain the odds of
survival are considerably higher for iPhone developers.

~~~
stcredzero
Yes, but the pyramid structure of wealth (concentrated at the top) definitely
applies.

~~~
coglethorpe
With the right binoculars, you can see Steve Jobs standing way up there on
top. I do get what you mean about that, but it seems smaller pyramids can be
built next to the big ones, even if they do pay taxes (so to speak) to the
bigger ones. Maybe the iPhone isn't the best environment for that? Or maybe
the real money is in building apps for other companies who need their services
extended to a new platform.

~~~
stcredzero
I strongly suspect your last sentence is the key!

------
credo
Btw I submitted this news report yesterday, but I titled the submission with
Newsweek's title/headline for the article - "Striking It Rich: Is There An App
For That?" (Hardly anyone noticed that submission :-). \-- On other posts,
I've seen some commenters suggest that hn submissions should keep the original
title of the article and not editorialize by typing in a new title, but as
this this submission shows, sometimes, re-titling a news report makes it
easier for people to understand what the news report is about.

~~~
hristov
Sometimes the original titles are just not very informative. So in those cases
it may be a good idea to change the title. But I still think that one should
not editorialise -- i.e., one should try to use a title that faithfully
summarises the article.

------
jsz0
Newsweek picked two really bad examples for this article. One is flat out
profitable and the other is making ~$100k. From my perspective that's rich in
this economy where many talented and qualified people can't even find a job.
I'm sure there are lots of real examples of people losing money on the App
Store but Newsweek couldn't be bothered to find any.

~~~
absconditus
Where are these talented and qualified people without jobs?

~~~
JCThoughtscream
Given the nation's ridiculous unemployment rate, and especially given
California's even larger numbers? Probably everywhere, actually.

~~~
absconditus
The unemployed people I know of aren't people I would describe as "talented".
Talented people generally aren't unemployed unless they want to be.

~~~
JCThoughtscream
Anecdotal evidence isn't exactly an irrefutable argument.Not to mention you're
begging the question as to how many unemployed people you actually know.

Finally, talented people with preference for working in a system than
designing one out of scratch may be out of luck when looking for employment in
a low-yield market. I don't think either of us are talking about talent as a
static, singular or sole factor of employment probability, after all - and
like it or not, there's such thing as Plain Bad Luck for some folks.

------
rauljara
There are so many of these 'iPhone development doesn't automatically make you
rich' articles that make it to the top of HN. I tend not to look at the
comments for those articles, so forgive me if this is a common question, but
can anyone tell me why there are so many? You'd think this is something we'd
all know by now.

~~~
fjabre
75k apps and billions of downloads suggest we dont know anything.

The only real winners in this whole game have been Apple and iphone dev
consultants.

------
psyklic
I'm convinced that on these new anyone-can-make-an-app platforms (e.g.
facebook, iphone, android), your best shot to make money is to be one of the
first out with a product, then with that experience go freelance.

The markets become saturated too quickly. After a while, your problem becomes
advertising rather than product quality. The only way I see to survive
somewhat reliably later on is to diversify and become a portal/aggregation
company.

------
nearestneighbor
If not iPhone, how is a web-hating programmer to strike rich?

~~~
harpastum
Striking it rich aside, a "a web-hating programmer" is going to have a lot of
trouble these days. No matter what project you start on, completely avoiding
the web is one way to make sure that your competitors will one day get the
best of you.

If you're talking about simply avoiding 'web apps,' there's still decent money
to be made in desktop applications. But, as with almost all industries, there
are two ways to strike it rich: get _really_ lucky, or work _really_ hard.

edit: now that I think about it, you might be able to get a couple years out
of µC work without dealing with the web, but that's more hardware than
software.

~~~
nearestneighbor
Of course, I meant developing for the web (beyond static web sites). I hate
the accidental complexity of web apps and, frankly, that's not where my
expertise is.

My languages of choice are Python for prototyping and (modern) C++ for the
actual development. I enjoy working on machine learning types of projects and
thinking about algorithms.

------
catone
This sort of article always struck me as silly. Is it really that surprising
that not all developers on the iPhone are wildly successful? Or even that most
aren't? Welcome to capitalism -- not everyone will be rich.

Not all developers on [insert platform here] are getting rich. But some are.
Not everyone who starts any type of business will strike it rich. But some
will. Why is this news?

~~~
gcheong
One of the more interesting points was that even the developers who everyone
thought were getting or had gotten rich seem to be struggling to
maintain/repeat their success or got rich for other reasons (such as the guy
who bought shares in Palm from the revenue of his game).

------
ssharp
I'd hope at this point, anyone looking to get into development is grounded in
the reality of the market.

This isn't going to change anytime soon and it's going to play out across ALL
platforms. The AppStore just gets the attention because it has the biggest
"easy success" potential to a developer. A crappy app that nobody wants is a
crappy app that nobody wants on any platform.

------
haseman
Anyone telling you that the App Store is still a gold rush is trying to sell
you something.

------
jroes
This Cubby guy's biggest expense was the $29k he blew on programmers. It's
crazy how many people are trying to make money on the iPhone and are either
not programmers, or don't have the drive to actually learn how to write code.

------
rscott
Bjango wrote what I thought was a good, brief response to this on their site.
<http://bjango.com/articles/golddigging/>

------
easp
Articles about how iPhone developers aren't getting rich won't make you rich.

~~~
mattmaroon
It will help prevent you from becoming poor if you were thinking about iPhone
development.

~~~
roc
This article tells the reader nothing except 'The App Store isn't a free
ticket to millions of dollars'.

If that realization is the only thing keeping someone from going broke for
having tried iPhone development, they'll soon be broke from some other idiotic
scheme. Bridge ownership, perhaps.

