Yesterday developer Rick Strom wrote a blog posted titled “The Incredible App Store Hype“, in which he detailed some of the revenue stats he was seeing from the iPhone applications that he had released (some of which rank on the App Store’s top apps lists), and what other developers could expect to make accordingly. His conclusion? That most of the 36,000 applications on the App Store aren’t selling at all – for many apps, most days go by without a single sale.
Surprised? You shouldn’t be.
As marketplaces go, the App Store has a very low barrier to entry that makes it easy for anyone to sell their wares, which means that it’s flooded with apps. There’s no way Apple could prominently present these 36,000 applications to users without overwhelming them, which means most apps fall into obscurity as soon as they’re submitted. If you can’t find a way to get the word out, nobody is going to find your app on their own.
Now, as someone who regularly likes to cover the success stories of the App Store, I thought this would have been fairly obvious to other developers and have thus failed to insert disclaimers that these cases were not typical results. But the fact that Strom’s post was written seems to indicate that perhaps we need to make this a bit clearer.
So here goes: The App Store probably will not make you rich.
To underscore the point, let’s go over some of the stats presented by Strom. His application Zen Jar ranks #34 on the Social Networking top apps list. And while most of us would probably assume it would take at least a hundred daily downloads to place there, the reality is quite surprising: Zen Jar reached the 34th position with only 30-35 downloads a day (or around $20 a day for a 99 cent app). Similarly, Sprint Board Pro, which ranked 95th in the Board Games section of the store with 6-8 daily downloads. Granted, these aren’t exactly the most popular categories, but If it takes fewer than 10 downloads a day to make the top 100 bestsellers of any category, that’s saying something.
Strom likens the App Store to a lottery, with the time and cost spent developing your application as the price of admission. And I think he’s right in this respect. The thing is, I don’t really see how this differs from many professions where the rich and elite are given heavy media coverage while everyone else toils away in obscurity. This is true for the entire entertainment business, where actors train for years just so they can vie for a limited number of spots. Most writers struggle to have their books published, let alone see them become popular. Basically any job that has the potential to make you rich is going to require a combination of hard work, talent, and luck. Those with lower barriers to entry will see huge amounts of competition. There’s a reason everyone isn’t wealthy.
Strom writes that software entrepreneurs frequently use the “huge successes” of a market to gauge its potential, rather than looking at the average outcome. I think this may be true for some of them, just as some would-be actors venture to Hollywood with the expectation of simply jumping into the spotlight only to find themselves waiting tables at a diner. But I think that most developers understand the risks involved, and how unlikely it is that their app will hit the big time. The same can be said for most of the web entrepreneurs I meet. They may invest many months or years into their work, but they know that the vast majority of new online ventures are bound to fail.
So for all of you iPhone developers who are new to these somewhat discouraging facts of life, I’m sorry if I (and the media as a whole) have failed to underscore the low probability of striking it rich on the App Store. To those of you who keep building things anyway: rock on.
The 20/80 rule is in full effect – maybe skewered closer to 10/90.
Your strongest line: “If you can’t find a way to get the word out, nobody is going to find your app on their own.”
Like most good ideas, people expect the idea to sell itself without a marketing & PR plan.
Jason, Tyler,
All this is also true of the music industry. All you need sometimes is just the marketing and PR plan, not a good product: the Apple store has “farting” apps, the music industry has the Backstreet Boys.
Still, lots of bands trying to be the next Rolling Stones often without talent or marketing. And the same 2 or 3 success stories of bands “discovered” online, which serve as a motive for the new legions of teenage musicians to get in a band.
As you said Jason, “Rock on”
“the Apple store has “farting” apps, the music industry has the Backstreet Boys”
LOL! I like that… Add britney to it too.. SIngs like she is vomiting..
Let’s face it, the iPhone is the favorite of the hipster crowd with short attention spans. Most of these people blow all their savings on constantly upgrading their Apple gadgets and won’t shell out for software.
I think you a developer is better off targeting a more mature, business oriented crowd. That means developing for Android or Palm.
Totally agree, this is like many industries where the 80/20 and 90/10 rule apply. Where 20% get 80% of the traffic or 10% get 90% of the traffic.
Wikipedia has about 1% of the contributors accounting for over 95% of the articles! I believe this is also known as the Power Law Distribution.
In the App Store, you must break into the elite top-25 app section to make it big. That separates the A-listers from the D-listers.
The tides have died here.. Above the horizon, the Pre Wave is coming! Get your JS surfboards ready and get ready to riiiiiiidee duuuuuuudeeeess
Truth is that a good idea and a good bit of luck does sell itself! Google, Yahoo, FaceBook, Twitter. None of those got there with greate MKT and PR. They just “happened”. Just like most of those Apps.
ya seriously
Ummm or even 2/98?
That’s what I meant.
I think if you are talking about an independent small time developer making a standalone app that makes him his millions (or even a hundred grand), the odds are more like 1/500. As the article mentions, this is only going to get harder as the number of apps grow, but what wasn’t discussed is the fact that as more professional studios enter the space, consumer expectations and developments costs will also rise drastically–I doubt if iShoot launched today it would do as well as it did initially as it would be competing with some exceptionally well polished games from some much bigger players.
I think startups will have a bigger chance of winning if they don’t position themselves as mobile-only companies, and use their apps to extend the power of a larger service, like Mint or Pandora. Then they can give the app away for free and use it as a carrot to push traffic to the parent offering. Twitter is the prime example of this, and even better for them, they get other people to do their development dirty work for free.
Getting people to pay decent money for a premium app is close to impossible (at scale), and while its slightly easier to get traffic with free versions, good luck monetizing using advertising on its own.
I think a huge win along these lines will be the ultimate extension of one of the mainstream MMOs onto a mobile device. What if Blizzard released a mobile version of WoW that integrated with your existing account? Maybe all you could do was play some microgame and collect experience points, but it would give a lot of marginal value to a lot of users, especially more casual subscribers who already have a tough time justifying the expense.
I’m obviously heavily biased, but that is our philosophy at my startup, life360.com. We are going to launch a few mobile apps to test point demand and different ways of marketing our product, but we aren’t expecting that mobile alone will make the company a winner. Our company also won Google’s Android Developer Challenge, and if you want even more sobering statistics, just look over there. Even of the 50 companies that were supported by Google, none were able to succeed as independent businesses.
Wow, all that from a facebooker!
It should be used as a gateway to profit, not a profit machine. If you’ve got a popular app, whether or not it’s paid for, you’re inevitably going to increase interest in you as a developer.
I see no reason to charge $10 for an app if it reduces users by 1000%, if you’re a good developer having a popular app would work absolute wonders for your portfolio.
How is it possible to reduce demand by 1000%? Maybe you mean 95% or 99%?
100% x 10!
Note to myself: Don’t hire this guy as a developer. 1000%….
Disappointment
Does anyone have a towel, to sop up the cold water?
Jason,
You make a very good and true point. Though mobile app developers should probably look at app stores more of a distribution method as opposed to a means to market their app in and of itself. The latter would probably result in a whole lot of disappointment.
However- the positive side to app stores, even with the risk of getting lost in the noise, is that once you find another way of spreading the word about your app, there’s finally an easy way for users to then get it onto their phones. Pre-app stores, it was a nightmare going from recommendation to an actual download. So even if the app store itself isn’t driving the usage or sales of our app, we (mobile devs) should be thankful there are easy and clear distribution and provisioning methods for our apps.
Much needed post, Jason.
I would like to add one point: before starting to write an app please see the apps that are already there and think hard how you are going to be different and better in at least some aspect. We have enormous amounts of clones in the App Store and that makes situation worse for everybody – where one developer could live off proceeds, 30 developers with identical products (no joke) can not. The users are worse off as well – where developers can not dedicate their full time to a product, quality suffers.
Consider this point for inclusion in this or a different front page article, the word needs to get out.
Zen Jar? Never Heard of it.
It would help if TechCrunch actually invested two minutes or more in writing about these struggling iPhone apps, but no, that’s not as interesting as Twitter’s latest CSS modifications is it.
Very good point.
We actually spend a lot of time trying find the best new iPhone apps, even those that aren’t developed by one of the ‘big guys’.
Early on it used to be easier to find the ‘diamonds in the rough’. Now there’s just so much crap flooding the store (seriously, try looking through a ‘new apps’ feed) that it’s harder to find the really neat ones.
How about a story on the mobile apps (not just the iPhone) that should have become big, but instead languished?
It could be a good counter to the articles on apps that should never have made it but somehow hit the homerun (i.e. iFart).
If you dig deeply outside the games and entertainment categories there is some pretty cool stuff that fits the bill, especially on other mobile platforms like Android.
I guess then we are doing fine with 11 to 12 downloads a day.
I guess then we are doing fine with 11 to 12 downloads a day. FYI we are adding a snore sound in our next release
Http://themestingnazi.com
Http://themeetingnazi.com
Mistyped above. DAmn iPhone keyboard
Fail. Cannot even spam properly. What a loser.
Tom,
We are not spamming. We are participating. Look at the context of the post by Jason.
While the big guys make it to the post small devl like us have to remain at the comment level. How else do we get the word out.
Re: app discovery, it feels like Apple’s taking a risk with both iPhone owners and developers by not creating a better search / browse experience within the App Store. We’ve taken a swing at the problem at AppStoreHQ, and while our data supports Rick’s hypothesis (about half of all apps in the store have never received a rating), we’ve also made it possible to explore apps by any combination of keyword, price tier, rating and category. Yes, there are 165 apps related to the search term ‘fart’, but there are also beautifully crafted apps in every category that will never make the top 100 list but are still well worth a closer look. Next time you’re digging for ‘diamonds in the rough’ take us for a spin and let us know what you think.
You’d have to be pretty delusional and hype-mongering to believe that less expensive apps for a much more narrowly adopted platform would financially succeed at anything close to what the shareware developers did for PCs in recent years. And said shareware developers, with a few exceptions, have rarely built thriving, profitable businesses from their efforts.
Sometimes it’s more fun to drink the Kool-Aid than to look at history.
isnt this what is happening to the internet and digital media as a whole? premium natural language location on the internet and mobile will forever be king. thank you for an honest unbiased article about the reality of apps. now maybe we can get down to business.
MyLocator.mobi – find your destiny
so I was having an online discussion about AAPL app store, this guy was boasting that is made a 140% return on investment. initially i said “wow!”, but I thought about it for a minute…..and I came to the point that he really didn’t make a lot: $100 to submit an app, so he made $140 with only $40 in profits….
Have a look at the iPhoneSpree (www.iphonespree.com).
I am sure there are really cool apps that you didn’t know about.
The US and several other major countries suffer badly from the “hit song mentality”. We make heroes out of the tiny percentage of successes and as you said, relegate to obscurity the overwhelming majority of people that make virtually nothing. I think we picked it up in the US during the Gold Rush so that every few decades we invent a new Gold Rush to get excited about. Whether this phenomena is due to a clever marketing conspiracy like the holiday gift season, or the media’s frantic desire for new content, or due to the genetic desire of human beings to gamble is a philosopher’s debate. But it’s real. The Lottery, American Idol, the Dot-Com boom and many more are all different facets of this. Note, in the case of the Dot-Com boom it was the ability for even ordinary Americans to make a killing in the stock market with a minimal investment, or also by simply working at a company that gave stock to its employees including entry level positions before a big IPO.
So the latest Gold Rush is the cell phone software market. It has all the right elements. A barrier of entry whose cost is so low virtually anyone above the poverty line can benefit. It has the powerhouse tech media who are hungry to cover it to find the “next star”. This feeds and fuels the imagination of the hopefuls. (Let’s face it, TechCrunch and so many other Tech blogs are all trying to be the first to find the next high tech superstar or superflop. TechCrunch though, as proven in this article, has the wisdom to question the market forces that feeds it’s own content stream. Kudos). In 2010 it will probably be home robotics or nanobiotech or something else. As long as humans love to gamble and read about gambling successes, this will continue. If there’s any silver lining in the miserable cloud of reduced spending hanging over the industries that I love (tech), it’s that at least we haven’t seen a post a day about some new million dollar funded iPhone Fart App. Wait, I’ll do the patent application now (this is meant in fun):
“Today, Gaseous Cloud Computing raised one million dollars in Series A funding for a revolutionary patent pending app called iFart. The patent’s major claim describes a device that reproduces accurately the sonic characteristics of a human colonic emission on a hand held computing device. A secondary claim includes the ability to deliver new dynamic silent but deadly content via a Wireless link.” Think Kindle with Beans.
@RO
“Let’s face it, TechCrunch and so many other Tech blogs are all trying to be the first to find the next high tech superstar or superflop.”
your wrong.
most tech blogs are riding the hype mobile. the hype mobile pays the bills. remember twitter? most are more concerned with appeasement of the established vc funded bubble pushing startups. the second you remove the bubble hype the tech industry looks as dismal as the iphone apps. anyone here think mark zuckerberg is a genius? hes just someone who got some funding and thats it. fadbook has no meat and potatoes thats why its becoming a circus. face it we dont need another website or application for anything. digital media has its limits. we are at the apex of innovation. now its all about who can make sense of all the cybergarbage. whom ever creates the best integration filter will win the digital media wars online and mobile.
HypeLocator.com – dont believe
I thought this locator dude was a dumb bot.. I guess I was wrong. It is an intelligent bot that can write lengthy comments with jargons thrown in.. Probably, it is powered by Wolfram Alpha Alpha.
My wife conducted an unbiased survey. We have a park near our place and there are always some people begging… you know… for a change to have a meal. She was offering them a lottery ticket or a $10 bill and was asking them to pick what they want.
100% of the American beggars chose a lottery ticket!
We made the same experiment while living in Europe (France, Italy then England) – THE OPPOSITE result – 100% of beggars chose a bill.
Robert, it’s deep in the genes, VERY deep.
That’s odd. Did none of them realize that if they wanted a lottery ticket so bad that they could buy 10 tickets with the $10?
it is almost as odd as treating homeless people as lab rats.
I don’t believe him this a second. While some of the homeless may not be the smartest people around, I think they’d know the value of $10.
If he had said that she’d offered $1 vs the lottery ticket, I would believe that some people would choose the ticket, but no way that’s the case for $10.
The app bubble is bursting and there is nothing one can do to stop it. Smart developers will use their time more appropriately now.
Thank Jason for bringing this information.
At last someone says it loud.
Disclosing this info earlier would have deter many developers from spending their precious time and energy in developing iPhone apps.
Apple was of course pumped up the success Cinderella stories to the mainstream media, which as usual, sold us once again the “American Dream” without criticism and without showing us how stupid we may be to literally work for Apple for free.
Well, better late than never.
It’s Not the story about the American Dream but another one about the Emperor’s New Clothes.
“…the Emperor’s New Clothes.”
You meant to say:… “Steve Jobs new gadget”, -didn’t you?
New Gadget? Which one? I’ll take 2.
While this post is much needed in dispelling the Myth of instant fortunes for anyone submitting apps… I think the beauty of the App store isn’t in delivering lowly developers a load of dough… it’s giving them the chance to do it in the first place.
Well let’s look at risk vs. reward here. For an experienced iPhone developer, Zen Jar couldn’t have taken more than a week to code, test and package up. At $20/day we’re talking a few thousand dollars in the course of a year. Not bad for a week’s work.
If you expect to be a gazillionaire from putting out one app on the app store, then you are just dreaming. But if you put out a steady stream of useful applications (a category which Zen Jar doesn’t really fall into IMHO but still…) you can make quite a decent living no doubt. You definitely can do better than working in some corporate programming job, with more job security and more control over your life. This will be even more true in version 3, where you can start selling subscription apps which guarantee steady income. Even more true if you port your apps to Android and Symbian as well.
No surprise though. You need to take your marketing in your own end if you want to sell, here like with any other online store. The App Store is no more than a distribution channel.
What you’re saying here could be directly replaced with Google Adsense. Tons of developers jumped in with promises of gold, disappointed by a handful of clicks a day.
What a waste of time. The dream AdSense wove was a huge success for Google though.
http://www.trad...spx?symbol=goog
Your comment makes zero sense, but thanks for spamming!
Drawing the analogy between the IPhone Apps Gold Rush and Google Adsense Gold Rush.
People were driven to make webapps (Iphone Apps) with the stories of people hitting it big like PlentyOfFish (Insert top Iphone App).
Most people on AdSense make dollars a day. Just look at any website owner forum.
Google got a huge amount of developer bandwidth on this promise. Sure dollars don’t make much for each developer, but it adds up for the Goog.
Clearer?
http://www.traderbots.com
The App Store is a warehouse. It’s a distribution point. It’s your job as an app developer to source and create demand and drive traffic *to* the store, rather than sitting around waiting for lightning to strike.
Yes, you’ll probably lose the get-to-the-top-of-the-app-store game. All that says is that you should be playing another game.
So what’s going to be interesting is how OS3 (ie with in-app payment) will change all of this. Anybody got any idea of the sort of apps that people are developing? I presume that payback models will change significantly.
(V weird that OS3 not yet been mentioned)
good article. i would even apply this to all those developing for twitter.
Agreed. Developing for Twitter is more from the last Gold Rush which started with the rush to build clients for all the cool new Web Services. We’re finally seeing the tide reverse there with Yahoo shutting down major services like Yahoo Live, etc. and others. But web service client development is here to stay because web services are here to stay. Whether they stay free is another matter.
Good point. My view is that you can always go tow ways …
1) Build something ‘revolutionary’ (stuff we don’t know we ‘need’ it till we try it)
2) Build stuff you know that people (even better businesses) need it to save money, to make more money or to have a better life.
With approach 1) you can hit it extremely big (see twitter) but chances are probably worse then a lottery
With approach 2) your chances to be the first to hit a new and thus big jackpot might be much smaller but your chances to build a business that supports a respectable income for you and your employees are much better and there is always to grow it into a truly great business over time.
Both usually need good marketing to get noticed and succeed.
Pick your game.
Good luck.
(true for web apps as well as iPhone stuff etc)
Well… what a surprise. This applies everywhere, including in Friendfeed where the top users get likes and comments quite regularly, while the rest "toil in obscurity"
App store is just a method of distribution. It’s up to to the developers to market their software, just like a regular product. Apple’s not going to do the hard work for you.
Jason,
Thanks for shining some light on this for us developers on the fence about developing an iPhone app.
It’s called life people, famous people get more famous, everyone else gets nothing
Normal rules and logic still applies. Great team + Great product + Great marketing and communication + People who love you = Success.
At 70% of $0.99 per unit and a marketplace that’s doubling in size every 3 months how are you going to feed your great team, find a year to design and develop your great product, hire great marketing and communications and still find the time and money to lover everyone?
If you’re even marginally capable, it’s nothing like a lottery. Ever heard of promotion?
Failure is part of the game, folks. You take the risk and develop something and you don’t know for sure how people will respond. Even if you earn nothing from your first app, you definitely learn something. You are allowed to improve it, get feedback and make it better. We were fortunate to do better than most with our first app. My new app for 3.0 I go back and forth on my thoughts of which features will be useful and used by people. Time will tell if it is a success! With the App Store as in the real world, there are no guarantees, but through trial and error, we improve and grow, and hopefully support ourselves along the way.
Why would that surprise anyone? App store downloads are in that category of activity, like blog readership, that almost always falls into a power law distribution.
I think this is just the same as the “normal” software and web market places, at least for smaller shops – lots of people fail and a few succeed. And a very small handful really make it big.
As someone who’s been release his own software since the early 90’s – 30+ apps, many web sites, etc. – I have in all that time had only one real, moderate success. The others had users, and made a bit of money, but by most calculations stayed small and never went anywhere.
The reason I keep at it is I love producing software, and at some level I certainly do hope to have another success (and admit the rush of having one keeps me going; makes me want to do it again). But if I didn’t love writing software, I would have likely given up a long time ago.
The iPhone market place looks a lot like what I’ve experienced over the years – but the barrier to entry is that much lower, so there’s a ton more people trying to succeed in that market place that don’t have a lot of experience, and don’t have realistic expectations.
As a lot of the comments above say – if you’re just one person doing it, do it because you love it, and try to learn from your failures. If you’re trying to get a company going w/ iPhone software, then you better figure out a way to get it in front of people, or no matter how great the app is, you’ree most likely going to be drowned out by the massive number of other apps.
I blogged about my experiences at with iPhone dev at
http://sourceit...ost-mortem.html
Basically I made enough to cover my costs and time, but didn’t make bulk. I make more money from PC shareware with less time and pain.
I think that many have the wrong motivation: If you’re creating an app SOLELY in an attempt to get rich… you won’t.
If you create a passionate little app that does something needed, and does it very, very well, then your chances increase dramatically.
My app Zoo Sounds was featured as a Pick of the Week on MacBreak Weekly podcast. At the peak I was #18 in “kids games” selling 100 apps a day. Down to 60th now selling 20 a day.
The numbers in the article are spot on. There’s a few apps raking it in, but most are not.
Full stats if you’re interested here: http://www.lawr...ck-of-the-week/
yeah, i’m only a little bitter i’m one of those apps that haven’t sold more than 50 copies. i think it’s a good app… i did get 3.0 out of the deal tho.
What’s your app?
Why should we be surprised that only a percentage of the apps are seeing sales or raking in big bucks. Are we surprised when out of thousands of companies that are started in this country only a few are successful? What about the handful of movies that make any money or get any audience? How is this any different? The app store is not an alternative reality. It is very much part of the real world. And in the real world most companies/products/services do not ‘make it.’ Many do not make it even if they are excellent in every way, but perhaps lacking in marketing or advertising. This has been true for ever and the same behavior can be accepted in the app store as well. To developers who are saying, I wish I knew this before I ‘wasted’ time on development, are you serious? Life is all about RISK and reward. Don’t expect the app store to be any different.
The following are some iPhone app numbers I have compiled through my own experiences and that of some friends:
200 sales per day to make it into the paid games top 100 (US)
800 sales per day to make it into the paid games top 50 (US)
200 sales a day to make it into the action/arcade top 50 (US)
Also…
(total number of reviews, all versions) * 200 = approximate sales for a paid app … actual written reviews not just mere ratings
Anyone else get similar numbers?
Just to clarify, when I said ‘make it into top 100′ I mean barely making it in, i.e: #98.
Apps. that make absolute sense will be the ones which will survive and rise to the top. I think as the platform evolves, you will see the next generation of apps. will be embraced and regulalry used if it complements life and it centered around people.
I think its all about product overload for a customer. More choice does not mean more sales. But apple does not mind having more choice as it doesn’t has to pay for it. The customers are happy to get choice but the app developers have a low probability to make it big. The whole equation is tilted towards the apple and its customers. But as the rule of the game says that it you want to make it big you got to go through the grind. So I guess app developers will have to go through this grind until and unless they find alternate channel to reach the customers.
A very thought-provoking post – TC should have more of these naked-emperor pieces.
When the rules of the game are known, the windows of opportunity have long been closed.
There is a way – every day, display each of them prominently for for 2.4 seconds
Having developed “Enterprise” software for many years it is good to see the enthusiasm and creativity of this platform. Touch interfaces and portability make many new things possible much as cheap micro computers and later the internet did. The iPhone and Touch along with the App store provide today’s best way forward for this. I also hope Android and other platforms develop along side the Apple platform to deliver this change. The gold rush may be over but many good things are yet to come.
The App Store being overcrowded is certainly a problem, but (and I keep saying this) it’s been made much worse by Apple copying it’s music store model of top ten lists etc. for its App Store too.
Because of this focus, there is an inherent compulsion for iPhone users to try out that new chart-topper, and no one ever looks at what’s not a chart-topper and may still be good.
I know this will solve the problem only partially, but I do think Apple needs to rework its current method of showcasing / promoting apps.
Some days ago there was an article about iphone app advertisment (http://www.tech...ke-quite-a-bit/)
that if you make it to the top 100 apps you can generate hundrets of dollars a DAY ..
ok, these are free apps! but are the download numbers soooo diffrent FREE PAID apps??
> just as some would-be actors venture to Hollywood with the expectation of simply jumping into the spotlight only to find themselves waiting tables at a diner.
There is a concept of a “working actor” though — the guy who isn’t famous but makes a decent living doing commercials, or character work, etc. In fact, the vast majority of paid actors in Hollywood fall into this category.
The “working indie developer” exists in the web world also, but they are few and far between. It’s not exactly a fair comparison.
Well there is someone making gobs of money on the App Store – Apple. They are going for the long tail model with their 30% cut off of every app across the board. I expect them to get rid of the top 100 lists and go for a Genius Just For You recommendation engine instead.
I agree that if you just create an app without a promotion strategy, then don’t be surprised when you don’t sell that many copies!