59% of iPhone and iPad app developers don't break even on costs
A recent survey by a marketing firm called App-Promo shows that 59% of developers don't manage to make enough money from app sales to break even on costs, and 80% don't generate enough revenue to support a standalone business. 68% earned $5000 or less from their top app, while 12% earned $50,000 or more. Those top earners have around $30,000 set aside for a marketing budget. 64.5% of the apps created by those surveyed were paid, while 39.5% relied on advertising and 32.9% were freemium or lite versions of full apps.
The sample size of the group was only 102 developers, plus the marketing firm has a vested interest in scaring devs into pouring money into marketing, but even in that light, the figures still paint an interesting picture. There are a lot of disposable apps out there that I couldn't imagine any iPhone owner spending good money on. The few companies that can churn out really high-quality apps tend to have sizable budgets and a big, established business in the app world. And when developers do make high quality apps, they're often faced by an App Store customer base which no longer puts a high value on quality apps.
You can take a deeper dive in App-Promo's white paper, below,, or check out the short version in the snazzy infographic. Developers, do you have a hard time earning cash in the App Store? How much time and money do you spend on marketing and promotion?
Source: App-Promo, White Paper via TUAW
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Editor-at-very-large at Mobile Nations, gamer, giant.
Apple taking 30% of everything certainly does not help small developers.
The problems are with the number of apps available and the difficulty for finding apps, not being able to have a "trial" version for free and then people expecting all apps to be free anyway (oh, and without adverts too).
There seems to be a growing trend with people expecting to find an app for free and not having to pay for it. Yes you can put adverts in them, but they don't really generate enough revenue unless you have a really popular app and even then people complain because there are adverts in it.
I do agree that there are just too many apps and they are hard to find. When you get that quantity and variety, almost everybody stops making money. That is why I say this is an app bubble. The gold rush is over, very few people made money on it, and new apps now serve mostly to feed statistics in the petty battles of iOS x Android x WP7. Now the quality will slowly decline, as developers will stop making new apps, and it will be mostly business or marketing related apps, like the Coca-Cola or the NFL app.
If we go by that rate, I'm not surprised that 12% of devs are making good money.
You want to make more money, make better apps.
I don't think so.
Like many others who have commented on this, most apps are pretty crummy. I am very cautious of buying apps where I have to pay for them, often times only buying them when they are on sale, or after trying a free version.
Sadly, it looks like we are going to end up in the percentage that loses money. It's too bad because the game is really good.
Firstly, I think these numbers are off - the sample size is WAY too low, and this company has an agenda. I do think this scare tactic article is helpful though in retaining the quality of the apps on the market. By that I mean, scaring away potential developers who don't have what it takes to make great stuff.
Regarding luck, you make your own luck. Mobile products are products, most akin to things you pick up right before checking out at the grocery store. Anyone who says it is ALL luck is making an excuse for their lack of action. That's like saying meeting women is all luck. Pshhh! You can't win if you don't play!