Monthly Archives: July 2010

iPhone App store economics

If you believe all the hype about iPhone apps, you can just hammer out an App in a few weeks, let that nice Mr Jobs take care of all that sordid marketing for you and then sit back to collect a big cheque every month. However the numbers in a recent sobering post about the economics of paid iPhone apps tell a rather different story:

  • average annual income for a paid iPhone app (after the App store 30%): $3,050
  • median annual income for a paid iPhone app (after the App store 30%): $682

The numbers are based on various published data from Apple and other sources, plus a few assumptions. I haven’t gone through the numbers and the analysis with a fine tooth comb, but I can’t say I am surprised.

The disconnect between the hype and the reality is so large because Apple (understandably) only want to tell developers about the success stories. The media and the public seem quite happy to go along with this because it makes a more interesting story. But when there are 225,000 apps shouting for attention, only one way to access them via a notoriously dictatorial third party and $5 is considered expensive, it is likely that the majority of developers will do badly. Hence the median is so much worse than the mean. Before you write your iPhone App I think you should ask yourself if it has got a realistic shot at making the top 10 in its App store category. If not, don’t give up the day job just yet.

Further reading:

The Sparrow problem

How to Evaluate a (paid) iPhone App Idea