The analysis in the article is breathtakingly wrong. The data used is wrong. The math used is wrong. The conclusions are wrong.<p>First, the article assumes each developer creates one app (160,000 * 8700 = $1.392B revenues, $1.392 * 30% = $418mil "profit"). This error leads to further errors down the line.<p>Second, Apple App Store sales is estimated to hit apx $4.9B 2012 [1]. This means apx $1,470mil in gross income (what the article calls "profit"). The article uses only $1.39B revenues and $418mil in gross income in its calculations as outlined in point one.<p>Third, this analysis assumes every developer would not purchase an iPhone if they were not developing software. Given that the vast majority of iOS developers do it part time, I think this assumption is highly unlikely.<p>Fourth, including profit from phones as a % of appstore profits is just wrong. Phone profits are not included as part of appstore profits. Thus it cannot be used as a % of it. It is <i>additional</i> income, on top of the appstore.<p>Finally, just to give you an idea of how little profits from developer matter... In the last 4 reported quarters, Apple earned a pre-tax net income of $49,000mil. Or $134mil per day. This versus the article's $64mil over the entire year from developers. Somehow I don't think they spend a lot of time or effort trying to get money out of developers.<p>[1] <a href="http://www.mediabistro.com/appnewser/apples-app-store-revenue-expected-to-increase-70-in-2012_b26843" rel="nofollow">http://www.mediabistro.com/appnewser/apples-app-store-revenu...</a>
What's really depressing is that Apple's App Store revenue (whatever its source) comes from basically having strip mined a thriving freeware and shareware community. They did at least wait until CNET clear-cut the VersionTracker rainforest, but still.<p>Three years ago, a hobbyist could make an app in their free time, put it out there for cheap or free, and see what happened. If the app was any good, what would happen could easily be that they made a livable income off of their creation.<p>Today, that hobbyist has basically three options:<p>1. Pay Apple $99/year for the privilege of showing their creation to the world, and release it through the App Store. Feel their enthusiasm for the project drop as they go through that tooth-pulling process, but expect that it will all be worth it since the App Store will at least give them some good exposure. Watch as it doesn't.<p>2. Pay Apple $99/year for the privilege of showing their creation to the world, and release it on their own. This is a lot like the old days, except that now Apple is taxing you, and the old tools for spreading the word have largely starved.<p>3. Don't pay Apple a dime and release the app unsigned. Explain on the download page that the end user will have to edit their security preferences to allow unsigned apps. This looks sketchy to users, and now our hobbyist is suspected of being a criminal.
<i>Very few apps do make $8,700 (but those that do, often make far more)</i><p>is that true? i would have thought it's a power law. in which case it would be more correct to say "Very few apps do make $8,700 (and of those that do, few make far more)" since with a power law distribution, no matter what level you pick, the extremes are still extremes (if you see what i mean - the 1% have their own 1% who are the crazy rich part of the crazy rich...)<p>so does anyone have any numbers?<p>[it strikes me that, depressingly, you could summarize this as: no matter how good you are, getting an order of magnitude better is still hard.]
I doubt apple makes a substantial amount from developers alone. Quoting [1] which is the research I believe rmah is talking about...<p>"Global Apple App Store revenue is set to increase to $4.9 billion in 2012, up from $2.9 billion in 2011, according to an IHS Screen Digest Mobile Analyst Commentary from information and analytics provider IHS (NYSE: IHS). This means that nearly half of the revenue generated by the App Store in its five-year history will be earned this year alone."<p>Those are some pretty strong numbers. Given that the number is projected, even with a generous error rate of +-20%, any revenue from developer fee will be eclipsed by 4.9 billion.<p>While the author's estimate that apple generates 15% of its revenue from developers is inaccurate, it has to be said that the entry fee to get into iphone / ipad development is high. I would know since I'm currently developing a product that works across iphone / android / web. Here are our costs thus far (excluding phone-device prices ).<p>Apple:<p>Mac Air 1200$<p>Developer account 99$<p>DUNS number 200$<p>Server certificate for notifications 175$<p>Android:
Developer account 25$<p><For development - Use the mac or boot an old clunky win
laptop with Win-XP on it><p>Web:
0$ so far<p>Developing for apple devices is costly. For the same 1200$ that I could spend on mac air, I can get 2 powerful Win-7 laptops - ~ 500-700$ each [2]. Device fragmentation on android does require you to test on more devices, but there are services[3] that allow you to work around that problem. Besides, when netflix can release their app by testing it on a subset of 8 android devices [4], I don't see why that strategy is not good enough for others.<p>The author does have a point, but one that should not have been expressed as a percentage of apple revenues.<p>[1] - <a href="http://www.isuppli.com/Media-Research/News/pages/Maps-and-Passbook-in-iOS-6-Help-Propel-Apple-App-Store-Growth-in-2012.aspx" rel="nofollow">http://www.isuppli.com/Media-Research/News/pages/Maps-and-Pa...</a><p>[2] - <a href="http://www.dell.com/us/soho/p/vostro-laptop-deals" rel="nofollow">http://www.dell.com/us/soho/p/vostro-laptop-deals</a><p>[3] - <a href="http://stackoverflow.com/questions/1852248/is-there-an-android-testing-service-i-can-use-to-give-me-real-debug-information" rel="nofollow">http://stackoverflow.com/questions/1852248/is-there-an-andro...</a><p>[4] - <a href="http://techblog.netflix.com/2012/03/testing-netflix-on-android.html" rel="nofollow">http://techblog.netflix.com/2012/03/testing-netflix-on-andro...</a><p>[EDIT] - Formatting
Even if the stats were correct, it wouldn't make any difference to me as an iOS developer. The author seems to suggest iOS development is apple-win and developer-lose. Which might be the case if iOS were not an in-demand skill.<p>But as a developer, your own income is obviously not limited to what you can make on your own apps, and since diving into iOS six months ago my income has far exceeded any investment i've made in the platform. Mostly through making apps for other people, by my own app itself has very nearly recouped my total apple investment to date.<p>This is somewhat tangential to the author's main point, but my take is that there are many angles the author has failed to think of, and it's not a fair analysis of either apple or developers.
I did the math out for people in my talk at JailbreakCon, and <1% of Apple's iPhone-related profit could possibly be coming from the App Store, and it is likely quite a bit less than that (I made a couple conservative estimates, and totally ignored iPod and iPad hardware).<p>(The talk was recorded, and I believe has been posted in various places; it also goes through why tiered pricing models for things like bandwidth work the way they do, as many people who are confused by the App Store also never worked that out for themselves either.)
How many developers are doing precisely the same thing? How much revenue is Amazon making because I can read Kindle books on my iPad vs buying a kindle? How many skinner-box game developers are hocking virtual sheep with a free to sart game?
Well Apple's content (iTunes, App Store) exists mostly to move their hardware.<p>Compared to Amazon where the hardware exists to give users access to content.<p>Explains some of the price differences between the devices.