4 ms·

This comes off as very self-entitled. 1.) $12 is a lot more than $0 pre-smart phone era. The platform is the vehicle for selling software, not the income strea

by polemic 15y ago

This comes off as very self-entitled. 1.) $12 is a lot more than $0 pre-smart phone era. The platform is the vehicle for selling software, not the income stream. 2.) App development (for your average iOS app) requires almost no capital investment, R&D, finance costs or marketing. Compared to the risk shouldered by hardware makers and network operators, the average app developer really is getting mostly a [mutually beneficial] free ride. 3.) Why is mobile app development special? Why does the same argument not apply to PCs. Or cars. Or any product with an after-market ecosystem? EDIT: I'm not saying that the OP is self-entitled, and the numbers are interesting, to highlight where the treasure actually lives.

fidotron 15y ago
Outside the US it was quite possible to make decent sums pre-smartphones, however, there was an art to getting your foot in the door, but that was less work than the marketing now needed to stand out among the vast competition. Generally the hardware makers are getting screwed too. Only Apple aren't because they also own their ecosystem and exercise enough muscle to scare operators.
ChuckMcM 15y ago
I think polemic brings a valid point of view here. The phone maker has huge costs that they are recovering, the network has lots of costs, both on-going and sunk, that it is covering. The developer, well he's got his time and if you want to include his depreciation of his development setup. Lets say the developer spends $10K on equipment to do development, and maybe $2,400/yr on net access and developer subscriptions, etc. So with a 3 year straight line depreciation they have maybe $5.7K in costs for the year. And in that year they make an application which sells for $1. At a 60/40 rev share that is 5700/.66 or 8636 sales to cover their annual cost and 20K sales if they want to have a 55% gross margin on their software business. Of course $13K/yr for an app isn't a living wage. But then again if you only make 1 app a year and sell it for 0.99 you're not exactly as productive as say someone who makes 4 apps in the same time frame. Business analysis aside however, the App market does seem a bit like it shot itself in the foot. I mean the typical ASP per game on a game console is north of $35. Why are iPhone Apps $0.99?
PaulHoule 15y ago
In my mind it's not a matter of fairness or entitlement, it's a matter of "is working on this worth my time?" Perhaps it's because I don't live in Silicon Valley or because I live in a huge cell phone dead spot, but I've stayed completely out of mobile apps. They've always looked like a fad to me.
alvarosm 15y ago
2) Investment? how about the time all the independent developers put in all the apps you can download? how's that for an investment? Free ride you say? is this some sick joke?
- polemic 15y ago
  Bluntly: wishing it were otherwise does not make it so. There is an entirely valid economic method for valuing the investment of the developer. It's call the app store. The answer is $12 per device. The 'sick joke' is that so many independent developers continue to pile into a saturated market in the expectation that they'll make a small fortune.

by polemic 15y ago

fidotron 15y ago

Outside the US it was quite possible to make decent sums pre-smartphones, however, there was an art to getting your foot in the door, but that was less work than the marketing now needed to stand out among the vast competition. Generally the hardware makers are getting screwed too. Only Apple aren't because they also own their ecosystem and exercise enough muscle to scare operators.

ChuckMcM 15y ago

I think polemic brings a valid point of view here. The phone maker has huge costs that they are recovering, the network has lots of costs, both on-going and sunk, that it is covering. The developer, well he's got his time and if you want to include his depreciation of his development setup. Lets say the developer spends $10K on equipment to do development, and maybe $2,400/yr on net access and developer subscriptions, etc. So with a 3 year straight line depreciation they have maybe $5.7K in costs for the year. And in that year they make an application which sells for $1. At a 60/40 rev share that is 5700/.66 or 8636 sales to cover their annual cost and 20K sales if they want to have a 55% gross margin on their software business. Of course $13K/yr for an app isn't a living wage. But then again if you only make 1 app a year and sell it for 0.99 you're not exactly as productive as say someone who makes 4 apps in the same time frame. Business analysis aside however, the App market does seem a bit like it shot itself in the foot. I mean the typical ASP per game on a game console is north of $35. Why are iPhone Apps $0.99?

PaulHoule 15y ago

In my mind it's not a matter of fairness or entitlement, it's a matter of "is working on this worth my time?" Perhaps it's because I don't live in Silicon Valley or because I live in a huge cell phone dead spot, but I've stayed completely out of mobile apps. They've always looked like a fad to me.

alvarosm 15y ago

2) Investment? how about the time all the independent developers put in all the apps you can download? how's that for an investment? Free ride you say? is this some sick joke?

polemic 15y ago
Bluntly: wishing it were otherwise does not make it so. There is an entirely valid economic method for valuing the investment of the developer. It's call the app store. The answer is $12 per device. The 'sick joke' is that so many independent developers continue to pile into a saturated market in the expectation that they'll make a small fortune.