App Developers: Show Us the Money

8 thoughts on “App Developers: Show Us the Money”

  1. I recently posted this perspective on Todd’s blog

    Very informative post. Thanks to Todd for sharing. When speculating whether this situation will get better for developers over the medium to long term, I think the relevant data point is the difference in commercial motivation between Google and Apple.

    Apple is in the iPhone and AppStore business to make money on every transaction. In order to maximize their success wrt this goal they understand that they have to extend this profit capability to their ecosystem partners. Because the profit motive aligns Apple and its partners, the system works.

    Google is in the search business. They play in other areas but only make significant money on search. This is unlikely to change anytime soon. Google execs have publicly stated that the Android project (I can’t call it a business) is all about creating “locked in” Google search sockets on more internet enabled devices. They do not have to make a dime on the phone, the OS, or the app store to get a respectable return on their investment. All they need is more queries. It’s no surprise that free apps are favored by Google. Hello. They made the OS free. It’s all about maximizing the number of devices that are feeding their advertising machine. Free apps are an excellent facilitator of that objective.

    Moat developers want to make money on their apps. They do not exist simply to enable Google to grow query volume. As long as this fundamental misalignment exists, the probability that things will get better in the medium or long term is very slim. One needs to get past the hype and realistically assess the commercial potential of each new app store that apprears. I recommend alignment of strategic business goals as one of the primary considerations for developers that want to make money. For enthusiasts that develop apps as a hobby perhaps other criteria are more relevant.

    News flash, it’s unlikely to improve significantly.

  2. “At this point, I’m open to hearing from anyone who can share information that will essentially help me (and the readers at large) figure out the real size of the application marketplace.”

    Anyone? Anyone? Bueller? Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. “Voodoo” economics. OK, Can anybody help Om to discredit the App Store? Bueller? Bueller?.

  3. Om,

    The best way to do this is to learn for yourself. Build a mobile app called Om for the iPhone. Sell it for .99 cents and track all the details from beginning to end. You will see in short order that mobile marketplaces are NOT the place to build sustainable revenue models. All they are is distribution points – you could just as easily leverage the Internet (although not in Apple’s case.) There are way too many mobile app stores, and it’s way to confusing for the consumer.

    The numbers I read everyday are over inflated by an order of magnitude because they are written about by people who have zero understanding of what it actually takes to ship an application that provides “meaningful value”.

    IMO the money to be made in mobile by the developers is in the Enterprise. Mobile SaaS is the future so you can leverage one set of business logic for all web based applications and access is via the browser which is both OS and device agnostic.

    Cheers,

    Peter
    5o9 Inc.

  4. Given the issues distributing and monetizing apps, does anyone find the tools/support given by carriers very helpful? E.g. AT&T’s devCentral?

    Does anyone have an opinion on the pros and cons of devCentral?

  5. Om,
    How many Android phones have been sold? (or are active)? compared to the millions of iphone/ipod touches. Is this a scale issue that will be corrected as more android phones are launched by more carriers?

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