Posts Tagged 'iphone apps'

Most developers only make $700 from their iPhone Apps

I just read a great post explaining why most developers only make $700 from their iPhone Apps:

  • Apple claims that cumulative app revenue has reached $1,4bn by June 2010. This is based on 5bn downloads (free and paid)
  • Several reports have pinned the number of paid apps to be about 73-77% of the total. At the moment, there are 225.000 apps in total, which at 73% gives 164.250 paid apps.
  • The average revenue is roughly then 1.4bn/164.000 less Apple’s 30% cut, which means developers earned on average $6.100/app over a 2 year period, or $3.050 per year/app.
  • However, average is not a relevant measure, because it is skewed as the tail of apps is long. There are a few apps who make the majority of money, so the relevant number is the median, where 50% make more, and 50% make less
  • The average price for an app, based on a number of reports, is roughtly about $1.95/app, which puts the number of paid apps downloads to about 733 million, or 15% of the total number of downloads.
  • SuperCollider Blog reported that half of all paid apps have less than 1000 downloads, say 999. At $1.95, that means the median revenue over two years is $1363, or $682 for one year, i.e. app $ 700 (see SuperColliders post on the economics of branded apps for more).

It is taken from a comprehensive analysis of iPhone App economics.

You really need to decide on what your goals are. Free apps are generally downloaded more than paid apps and thus have a greater reach. Advertising on your free apps can be a better option than charging for your app in terms of revenue generated. That said, charging for an app has seen some great successes.

Checkout one of my old posts: Brand Marketers: Don’t Sell Your iPhone App! If you’ve found this of interest.

Brand Marketers: Don’t Sell Your iPhone App!

If you want to use iPhone Apps as a way to get your brand out there, then you should be looking to create a free iPhone app.

Yes, you could charge for the app and there might even be a chance that you recover your costs. But what are you in the business of doing selling iPhone apps or selling your service or product?

If you aren’t in the business of selling iPhone apps then you want is a marketing tool and you want it to reach and engage the greatest number of people possible. Free apps are downloaded around 400 times more than paid apps according to one report. From a sheer numbers point of view, free apps are the best bet as marketing tool.

Yyou might not get the level of engagement with a free app versus a paid app; however you are only forgoing a small loss in engagement versus a huge gain in overall reach. The weight of overall reach in this case, to me, is a clear winner over the small loss in engagement.

But what about recovering the cost of the app? Well chances are it won’t happen. An app developer with nearly 20 apps in the App Store, some ranked in the top 20-40 apps, points out that his apps only make $20-30 per day in downloads. That’s about $7,300 per year and he’s top 20-40 out of over 100,000 apps.

So, if you get lucky you’ll recover your costs and then some, if you get really lucky you might end up making hundreds of thousands. Chances are you’ll barely recover your costs and barely reach your full potential audience.

With a free app you’ll reach a much larger audience and, let’s face it, the cost of development really isn’t that high either (probably cheaper than some YellowPages subscriptions I hear about). So why not use a free app as a marketing tool to get your business in front of the millions of iPhone users.


Scott Middleton
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