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How much money can you make in the iOS App Store? (riverofnewsapp.com)
148 points by dralison on Feb 28, 2011 | hide | past | web | favorite | 31 comments

It's certainly possible to make a living on the App Store, but you can't depend on a megahit like Angry Birds or Tiny Wings.

My theory is that you'll need probably a dozen or so apps in the $1.99 - $4.99 range. The $0.99 point has too many psychological problems in terms of perceived value and competition to be worth it IMO. Ads also aren't a viable source of steady revenue for any non-Top 100 apps.

Each of my (paid) apps get downloaded around 10 times a day (and trust me, I have some pretty obscure apps [1]), so this theory is based on 10 apps * 10 downloads/day * $2.99 avg price * .7 Apple Tax = $210/day = $75k a year. That's not quite Google money, but it's all you, which (for me) makes up for the other $40k.

So there you have it: have a dozen moderate, long-tail successes to make good money on the App Store. And with what, 80 million? iOS devices in the wild, how hard is 10 downloads per day? (easier said then done, right? ;))

Other tips:

- MOST IMPORTANT: be well-designed. App Store buyers love that (take a look at Dylan's app, it's very pretty).

- If you can't design, then try stick with Apple's default look. It might not be unique, but it definitely won't be ugly.

- Have a reusable app design. It's so convenient to be able to write the core app once and just swap out data sources for each new app.

- Build apps fast and be agile; don't focus on one app for months on end without launching. MVP and get real-world feedback.

- Make it clear that your users can get in touch with you via email or Twitter. And then respond to them!

- Update often!

- Try Lite versions of your apps with In-App upgrades.

Full disclosure: this is what I'm trying to do :)

[1]: http://itunes.apple.com/us/app/brocabulary-new-and-improved/...

> and trust me, I have some pretty obscure apps

This is a very good point. Everyone gets fixated on being the top-whatever in the category but the key is to be in the top 5 for your niche category. For example, search Salsa. I have on good authority that one of those top 5 paid apps was selling in excess of several thousand copies a month.

Do your market research. Dominate your niche. Compete in that niche. The App Store is a closed marketplace - people are looking for their niche interest. Some niches are more profitable than others.

> But I can earn twice as much in the corporate world. (Software engineers are paid well.)

I don't know why he is doing this silly line of argument. This is mostly passive income. He creates a product and it sells itself (with updates irregularly). When you work for a company, you trade time for money. Time == Money in the corporate world. That is a linear relationship. The beauty of marketing and creating your own product is that the linear relationship can become geometric - you can change the equation - with hard work, luck, and delivering what customers want.

And stop thinking of apps as revenue generators and start thinking of them as lead generators, portfolio pieces. Not all businesses make money from product.

> This is mostly passive income.

As a non-iOS developer I don't really know if an app that's 1 years old and has not been updated will continue to generate sales.

I make lots of comments on HN. Each of those is theoretically `passive income` for karma, but that doesn't mean I will keep getting karma for those comments...

Yes they do, but how much depends on your rating and amount of competition. A few months ago I killed a $1.99 app that hadn't been updated in over a year, yet 3-4 people were still buying it a day. I just felt bad charging for something I had no plans to go back to, and that had become a lot less useful after changes Apple made in iOS4.

Clearly you're not going to live on $5 a day, but I think a good strategy is to build a decent number of smaller "library" apps while working to fry bigger fish.

> - Build apps fast and be agile; don't focus on one app for months on end without launching. MVP and get real-world feedback.

In general I believe the whole lean/MVP thing, but I wonder about its applicability in the app store.

Launching without a fully baked product may hamstring you for a while if you get bad reviews/ratings upfront. Also, by having a great product from the start, you may be able to get ranked higher because you get free exposure in the "new" lists. If you have a barebones product, aren't you essentially wasting the free exposure you get for being a new app (that you won't get when you update)?

There is a slight difference between shipping something broken and shipping something that gets updated, frequently. One thing I learned from Apple is that it's more important that you ship something that works comepletely rather than feature complete (see copy and paste).

I like buying apps that I know are constantly in development because I know the developer is still interested and still adding features. Also, the apps that get updated tend to have more exposure and show up in lists more readily.

Very true point, as it's a crucial difference between your typical web app launch and an App Store launch.

Example: When I launched Brocabulary two years ago, I thought it would be a good idea to have a "free week" promotion. Results: 150+ reviews permanently attached to the rating that are far from representative of the current product. And a good chunk of those reviews are (justly) not so hot.

Ratings and reviews are killer on the App Store. Bad, edge-case experiences only really hurt you on the web if they're by a famous blogger or the like. On the App Store, you get a bad review because someone didn't read the description that says the app doesn't work on older generation iPod Touches without microphones and it's stuck there forever. It's just what comes with the territory.

Never launch a bad product, but there are many articles and examples that point out why it isn't a fantastic idea to build on an unproven idea for months. Just like on the web, you should go for a well-executed MVP with steady improvement. Maybe a little more than you might on the web, but the idea still applies.

Plus, with each update, you get a chance to reset your public reviews and ratings (after you hit a certain limit, Apple will display the average score only for that version). I wish the author had overlayed his update releases on the graph, as I bet that many of those spikes come from them.

Ejemplo: Path. Their launch product was pretty minimal, but just useable enough. They've released solid update after update adding new features. Now, it helps that they've got some players backing them and probably got Apple's attention ahead of time, but I think it's still a strategy worth looking at.

Ejemplo: Rdio. I've been an Rdio subscriber since when they launched last summer, and their iPhone app wasn't so great when it first came out. It worked, but all it could really do was play songs. Month after month a new update came out that added new, much-needed features. Hell, they only hit 1.0 a few weeks ago and it's obvious that all the iterations have amounted to a solid app.

Great advice!

It's clear that I'm not going to make a living from just River of News. This is why I slowed down on updates to River of News and have been working on other projects. But I've paid a price for that. My sales precisely track the frequency and quality of the product updates I've done. What buzz and momentum I achieved has been lost and sales have tapered down. My plan is to build a stable of products but I've learned now that I need to continue to show love to the existing products. Like most developers, I prefer to fully immerse myself in one task but I'm going to have to change my way of working.

You're app looks pretty funny.

It seems like the development cost/time is pretty low on that app as well. Good idea.

I was previously working on an early childhood education app. I didn't get very far until the numbers just didn't make sense. Perhaps I was being too ambitious but the velopment costs were extremely high, and I didn't think I could see it for more than $1.99. So I had to sell quite a few to even turn a profit. It's interesting though that you say even you're obscure apps sell 10 per day. During my research I found many that sold one or two per week. So you must be doing something right.

>early childhood education app

>I didn't think I could see it for more than $1.99

Patio11 sells a bingo card creator app for teachers for $30. You can charge $20 easily if you can demonstrate value to parents (parents spend a lot more than that on their children, heck an "educational" DVD costs more than that easily).

you're = you are

I think you meant your.

I've made 100K in the app store during my first 8 months. I agree that diversification is key. Don't go for a homerun, go for multiple singles. This is my strategy and has worked well so far:

1. Always release a free ad-supported version of the app. Advertising revenue has a much better "long tail" than paid apps. There is ~ 5% conversion rate, so your paid apps do better also.

2. Target a specific niche. There is far less competition and you can charge more money. My main apps go for $5 on iPhone and $8 on iPad. If you try to release a "Angry Birds" killer for 0.99c, you are seriously rolling the dice.

3. Re-use the same code base to make multiple apps. This should be done with caution, as there is a fine line between making the most from your work and spamming the app store (which can get you banned). Almost all of my apps share a common code base. This is a sure way to increase discoverability.

Anyway, that's been my experience. As full disclosure I HAVE been featured by Apple and reached the Top 60 top grossing on the app store, so my earnings are a bit distorted by that spike. But even in my lowest month, I have never dipped below $7500.

Awesome to hear about your numbers.

Would you mind linking to your most popular application?

Sure. it's called fantasy monster, you can find it on the app store.

If you don't mind me asking, how many applications is that spread over?


What have you done to get your apps noticed on the app store ?

Nothing. All marketing is organic and word of mouth. Good apps sell themselves. I was featured by apple a couple times.

I hate to be a nit picker on what is otherwise such a good post, but I have to pick a nit with this point:

> But no one else has ever enabled an independent developer like myself to connect with so many potential customers

The internet enabled that 10 or 15 years ago and there are countless individual devs who've created successful software products and whole businesses by selling direct. Even better, these people aren't bound to anybody's corporate teat the way iOS developers are to Apple. Apple certainly created a useful new market segment for the individual developer to address but I find this hubris about it pretty sickening sometimes.

I'm the author of the blog post linked here. Thanks for the interest and thoughtful replies.

I certainly have complaints about the dev process Apple has created but I stand by my statement that Apple has allowed me to connect to more potential customers than ever was possible before.

The web has been available to the average person for 10-15 years but that doesn't mean I would have been able to get those people to look at my product. If I held a yard sale I can't realistically say that I have a potential market of all 600k people in Baltimore. Maybe I put up signs around my neighborhood, a small number of people see them and an even smaller number go out of their way to see what I'm selling.

But if I'm given a shop in the high traffic inner harbor, I have access to vastly more people who will already be drawn to the area and happen to see my wares. And even better, that shop in the high traffic area is decorated nicely and already set up with a credit card processing system. All I need to do is line the shelves with product.

I'll stop before I carry the analogy to the point of silliness, but for me to succeed without the App Store would have taken a different kind of product, more infrastructure and a lot more time spent on the things I don't know how to do. Despite theoretical potential, I never would have made it happen. The App Store significantly lowers the barrier to entry.

When I started as a software developer I dreamed of having a product on the shelves at Babbages and CompUSA. I feel I've finally achieved the modern equivalent of that. I would not have been able to make that happen without the ecosystem Apple has set up.

This is really great information. Having seen similar charts many times in the past the question then seems to be, how does a developer for iOS or Android go about getting visibility for their apps? Clearly the visibility as a new app is pretty good, but it tails off fast and it doesn't seem that current methods are providing the visibility necessary for sustainment and/or growth. Outside of the obvious (a traditional marketing campaign, which is expensive) what kind of methods are available?

Great article. One maybe naive question since I have no mobile app development experience: it seems that many apps experienced a spike in downloads when they were first launched; but the downloads tapered off in the long run. It is quite the opposite of websites where the traffic start to build up only after a period of time.

Could this have something to do with the lack of app search engines/recommendation engines to direct users to niche apps? Or is it due to the fact that mobile users only care about the latest (and presumably best) apps out there, hence the shorter life cycle of mobile apps? Thanks.

You are getting initially some good exposure when the app is first released and the app appear on the first page of the AppStore. If you are super lucky your app can feature in the noteworthy section or fully featured. But getting fully featured is not easy and it is up to Apple only to decide on that. One thing that I will definitely recommend is to add some localization for a few other languages. Yes the US AppStore generate potentially the largest source of revenue but other non English speaking countries can be another way to climb in the chart and get some coverage to get your app noticed. One of my app was featured one time on an italian web site and there was definitely a nice side effect on sales + ranking in the Italian store.

(edit: typo/re-wording)

In your own experience, did the app need to be localized at the initial launch or did you see boosts in sales after localizing your app later on?

It's due to the nature of the market place: hits-based due to the charting nature of iTunes. So you typically get a huge boost in exposure when you launch (it's in the "new" chart as well as due to the PR that is drummed up externally) and as long as the resulting sales is enough to give a boost to it's ranking (in the "top X in category" chart, "top X in app store" charts, as well as being featured, which is really another chart), it keeps climbing. If downloads is sustainable at a certain level, the app settles at a particular ranking and earnings. Otherwise it fades and becomes forgotten. Some type of apps — games, novelty apps — are more susceptible to this.

Think of it like music or books. Apple is selling apps (to buyers) like it sells music.

Apps get some extra visibility when they are first released by being visible in the "New Releases" section.

There have been various attempts at improving app discovery, but I don't think there have been any outstanding successes yet.

An interesting thought for the original writer (Dylan Ginsburg):

Not only will you get the benefits of each new app, but as you build a library of apps, you'll get the long-tail benefits of each, significantly raising your income along the way.

I've posted a follow up to the original article.


This article is from the fall. Is there an update?

Do we need an update? I'm not sure if the iOS app market has changed in just a few months. The Verizon iPhone seems to be making a small splash at best and selling mostly to existing iPhone owners.

Well, hasn't the iPad userbase almost doubled in that time?

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