Apple's iPhone App Store celebrated its first year in business and while wildly successful for Apple, it has suffered from inconsistencies in the approval process . It's also hard for most apps to be found. To assist, Macworld recently launched a comprehensive App Guide to help the challenges of discovering the gems among 60,000+ apps. The size of the iPhone economy was highlighted by a recent report from ChubbyBrain showing than over $100M has been invested by VCs in 17 iPhone Apps companies.
In a clearly overly simplistic analysis to drive home a point - if you estimate that it costs on $25,000 on average to develop a paid iPhone app, given there are over 45,000 paid apps in the store - that represents over $1 BN in investment costs. However, assuming a generous 10% of all the apps downloaded are paid for - at 1 billion downloads with an average revenue of around $2.99 revenues in the order of $300MM will be generated, of which 30% goes to Apple.
While there are some good solutions, in app advertising is not making up the gap between costs and revenue. Of course. there may be other, harder to quantify benefits, for creating a iPhone app. While there are exceptions the reality is that for most aspiring iPhone App millionaires, it's a tough road ahead.
Unless you make the top 25 lists, it's difficult to be found and stand out in the store among 60,000+ apps, the expectations for an app from the user base are high and the willingness to pay for a good app is low.
7/14 Updated: Apple has just announced that downloads have reached 1.5B and 100,000 developers are working on Apps. See article at VentureBeat
It is however a great business for Apple and helps sell a lot of iPhones and iPod touches. Some of my current apps favorites include:
Excellent list of apps. What's happening with apps is no different than anything else in business. It's a matter of the survival of those that meet customer needs.
One of my most use apps is iFood. My wife is thrilled that I'm making dinner for her after all these years. It even tells me the aisles in my local supermarket where I will find the various ingredients. I'm having a great time thanks to a very sophisticated app that ranks in the top 10 as I recall
Posted by: johnrg | July 15, 2009 at 09:15 AM