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Full Analysis of iPhone Economics: Bad News?

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Re: Full Analysis of iPhone Economics: Bad News?

#71

Post by mattmanser »

pvg wrote: post #68
xenophanes wrote: post #54

Earlier quoted context omitted.

> [all] apps trying to make money are not free. No, 3 of my 4 apps are paid, even though I'm not making a serious effort to make money. Why shouldn't they be? I don't mind making a little money. Just because filtering the numbers to get useful results is infeasible doesn't mean we should pretend averages across the entire store mean anything for a person who sets out to build an app store oriented business. It remind…

No, 3 of my 4 apps are paid, even though I'm not making a serious effort to make money. Why shouldn't they be? I don't mind making a little money. Nobody said they shouldn't be. The point is 'serious effort' vs anything else is not readily measurable. This is something you say, rather than something you do. 'Trying to make money' vs 'Not trying to make money' is measurable - if you're not trying to make money, you do…

There is nothing useful about those numbers, there's nothing based on hard fact, it's all conjecture, but worst he's presenting conclusions off the numbers that make no sense. In my mind this line summed up his total lack of understanding:

Today if you decide to develop a free app, you pay your $35,000 development cost, then you find your free app competing against just a modest set of 60,750 rival free apps on the iPhone. Imagine if you are your consumer, scrolling past that set, to find you.

Firstly 35k assumes a decent sized app, not a few day job like a lot of these apps are. Secondly a lot of these apps have NO rivals. Search 'Nottingham Cinema times'. 2 apps. But guess what. Those guys also make 'Leicester Cinema Times', 'Birmingham Cinema Times', 'London Cinema Times', etc., etc.

All the same tiny piece of code.

And what about all the hoo-hah about those guys who had 20,000 apps like 'Pamela Anderson Pictures' that were eventually pulled? Guess what. Search 'Claire Danes', 'Kiera Knightly', any female actress. 59 p app for each one of them. Probably thousands of them. Same piece of code.

And look at some of the numbers he throws about, 2.1 billion app capable phones vs. 80 million iPhones. I'm sorry, but add up ALL of Europe and ALL of North America and you've not got 2.1 billion people. But I bet a large proportion of those iPhones are in that market. And I bet the vast majority of app purchases are in that market.

And worst of all for those 2.1 billion phones. THERE'S NO MARKET.

Roughly 50% of the people I know have an iPhone. And I'm probably downplaying that number. Young professionals with large disposable incomes. Just the sort of people you can make a lot of money off.

He's not comparing like for like, he's not realising that the median earnings per serious software shop is actually higher much higher than the average per app because of so much dross and he claims a 'typical' app costs 35k without considering that they probably only asked the serious software shops and not people like the poster above you or those shops which are pumping out 100s of apps per week.

Re: Full Analysis of iPhone Economics: Bad News?

#72

Post by MicahWedemeyer »

adolph wrote: post #30

"former Nokia executive" [number froth] "What I have been telling my readers and followers and this blog and in my books, that the real money is in true mass market services like SMS, MMS and WAP. That is where the REAL money is." This guy makes a strong case for skating to where the puck used to be.

I'd say there are a lot of pucks, and he's suggesting skating towards some of the less sexy ones. The app store is shiny and new and fun for hackers, but his point about market size is pretty valid.

All iphones are SMS-capable. Not all SMS-capable phones are iphones. Just like Twitter never killed blogging, smart phones still haven't killed plain old dumb phones, either.

Re: Full Analysis of iPhone Economics: Bad News?

#73

Post by smokey_the_bear »

sorbus wrote: post #45
metageek wrote: post #31

Earlier quoted context omitted.

Yeah, but he doesn't take into account the fact that 73% of apps do not get 73% of the downloads.

However, paid apps do get all of the purchases. The number of downloads doesn't matter, only income does.

Free apps have in app purchases, and ads. Some developers do very well off of free apps.

Re: Full Analysis of iPhone Economics: Bad News?

#74

Post by metageek »

pvg wrote: post #68
xenophanes wrote: post #54

Earlier quoted context omitted.

> [all] apps trying to make money are not free. No, 3 of my 4 apps are paid, even though I'm not making a serious effort to make money. Why shouldn't they be? I don't mind making a little money. Just because filtering the numbers to get useful results is infeasible doesn't mean we should pretend averages across the entire store mean anything for a person who sets out to build an app store oriented business. It remind…

No, 3 of my 4 apps are paid, even though I'm not making a serious effort to make money. Why shouldn't they be? I don't mind making a little money. Nobody said they shouldn't be. The point is 'serious effort' vs anything else is not readily measurable. This is something you say, rather than something you do. 'Trying to make money' vs 'Not trying to make money' is measurable - if you're not trying to make money, you do…

"I don't think there was any claim to reaching the 'standards of science'."

Science is how we know things. This article doesn't help us know very much, because it's so sloppy with its numbers.

Re: Full Analysis of iPhone Economics: Bad News?

#75

Post by Tichy »

adamt wrote: post #53
AlisdairO wrote: post #5

I'm not sure I buy that a typical iPhone app costs $35,000 to develop. Considering the simplicity of most apps, combined with the fact that many apps are effectively the same program with some content alteration, it seems like a really inflated figure.

I agree. It obviously possible to spend that much, but many apps could be a damn site cheaper (you can put together a lot in something like Lua/Corona in a few days). It reminds me about from in 2000, people were saying the average e-commerce website costs $250k-$1M to develop. I think it depends who you ask. If you ask the average BigCo, how much it costs, you might get that answer, but the average hacker will proba…

Lua is not allowed anymore.

Re: Full Analysis of iPhone Economics: Bad News?

#76

Post by pvg »

mattmanser wrote: post #71
pvg wrote: post #68

Earlier quoted context omitted.

No, 3 of my 4 apps are paid, even though I'm not making a serious effort to make money. Why shouldn't they be? I don't mind making a little money. Nobody said they shouldn't be. The point is 'serious effort' vs anything else is not readily measurable. This is something you say, rather than something you do. 'Trying to make money' vs 'Not trying to make money' is measurable - if you're not trying to make money, you do…

There is nothing useful about those numbers, there's nothing based on hard fact, it's all conjecture, but worst he's presenting conclusions off the numbers that make no sense. In my mind this line summed up his total lack of understanding: Today if you decide to develop a free app, you pay your $35,000 development cost, then you find your free app competing against just a modest set of 60,750 rival free apps on the i…

There is nothing useful about those numbers

Well, you can keep saying that but you have no numbers and no particularly concrete criticisms of his argument. Maybe he's not comparing like for like. Maybe all your friends have iPhones. Maybe you've forgotten many people outside of North America and Europe own mobile phones. The $35k, as mentioned in other comments in the thread, has very little bearing on his central argument that iPhone apps don't make much money.

And maybe he's made a complete hash of it. But at least we know how he got there.

he's not realising that the median earnings per serious software shop is actually higher much higher than the average per app because

Because what? What's a 'serious software shop'? How do you come to this conclusion? Right or wrong, I have a reasonably good idea how the author of the article came to his. Can't say the same for yours.

Re: Full Analysis of iPhone Economics: Bad News?

#77

Post by xcombinator »

I think this man doesn't get it, as a "former executive" he thinks anything in live is money.

People write apps for iPhones because they dream to do what they love without working for the man. Of course it is only a remote possibility, but it is real.

99% of the people that went to California searching gold didn't find it, as in SouthAfrica, but the now deeper old mine was discovered by a solitary man looking for gold armed just with a mining pan.

There is something in the human spirit that is as valuable as money that makes musicians painters, singers,movie makers or engineers that maybe won't get rich keep trying. Maybe they get to work on what they love.

PS: I'm an iPhone App developer myself, since Linux Click an run app store I believed that a "right" implementation of an Appstore was going to be the future. I expected to be Apple the first to to this. In contrast with this executive they just seem to "get it".

Steve Jobs is really smart in this too, when he creates something he diminish it, so the competitor's executives see an appstore and say: It's only a mere millions dollar market, not important.

IBMs mainframes were the "important stuff", when real money was, mini computers were just "cheap" toys with no real application. People who wanted "job security" deciced to work with the "big boys" because it was safe... until it was not.

Re: Full Analysis of iPhone Economics: Bad News?

#78

Post by maxharris »

Tichy wrote: post #75
adamt wrote: post #53

Earlier quoted context omitted.

I agree. It obviously possible to spend that much, but many apps could be a damn site cheaper (you can put together a lot in something like Lua/Corona in a few days). It reminds me about from in 2000, people were saying the average e-commerce website costs $250k-$1M to develop. I think it depends who you ask. If you ask the average BigCo, how much it costs, you might get that answer, but the average hacker will proba…

Lua is not allowed anymore.

False. See http://www.appleinsider.com/articles/10/06/11/apple_relaxes_...

Re: Full Analysis of iPhone Economics: Bad News?

#79

Post by adolph »

MicahWedemeyer wrote: post #72
adolph wrote: post #30

"former Nokia executive" [number froth] "What I have been telling my readers and followers and this blog and in my books, that the real money is in true mass market services like SMS, MMS and WAP. That is where the REAL money is." This guy makes a strong case for skating to where the puck used to be.

I'd say there are a lot of pucks, and he's suggesting skating towards some of the less sexy ones. The app store is shiny and new and fun for hackers, but his point about market size is pretty valid. All iphones are SMS-capable. Not all SMS-capable phones are iphones. Just like Twitter never killed blogging, smart phones still haven't killed plain old dumb phones, either.

Verily, there are many pucks.

It is pretty funny that the author includes WAP as one.

Re: Full Analysis of iPhone Economics: Bad News?

#80

Post by adolph »

pvg wrote: post #76
mattmanser wrote: post #71

Earlier quoted context omitted.

There is nothing useful about those numbers, there's nothing based on hard fact, it's all conjecture, but worst he's presenting conclusions off the numbers that make no sense. In my mind this line summed up his total lack of understanding: Today if you decide to develop a free app, you pay your $35,000 development cost, then you find your free app competing against just a modest set of 60,750 rival free apps on the i…

There is nothing useful about those numbers Well, you can keep saying that but you have no numbers and no particularly concrete criticisms of his argument. Maybe he's not comparing like for like. Maybe all your friends have iPhones. Maybe you've forgotten many people outside of North America and Europe own mobile phones. The $35k, as mentioned in other comments in the thread, has very little bearing on his central ar…

"Maybe you've forgotten many people outside of North America and Europe own mobile phones."

I wonder how many of those folks have phones that allow them to participate meaningfully in an application marketplace.

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