If you're trying to make money, dump your iPhone strategy

http://www.fiercedeveloper.com/story/if-youre-trying-make-money-dump-your-iphone-strategy/2009-06-10

by justinweiss • 17 years ago

27 33 17 years ago

I've rarely heard someone argue so strongly for inserting middlemen back into the supply chain. It's interesting, in a twisted sort of way.

amr• 17 years ago

And I don't understand his complaining about EA not charging more for their game. Is he saying they are not making money? Or that they are not making enough money? It is odd to see someone argue that.

haseman4• 17 years ago

Honestly, they're probably not making any money. I'm sure they're mostly setting themselves up for holding market share in the future. But yea, it's still odd.

hexis• 17 years ago

I think he's trying to say that at these lower prices, how would they be able to afford his services? He says it himself, more or less:

"If my publishers aren't making [enough] money [to pay me], I'm not making money."

jasonlbaptiste• 17 years ago

Spam, propaganda, and not true.

"While I know that there are thousands of apps you can buy for your iPhone/iPod touch, I've never actually met anyone who's ever bought one."

Did you forget about 1 Billion+ App downloads? Sure, a large portion of them are free. Those free apps can make money with ads+incentives for a freemium upgrade to the "Pro" version. Yes, Apple is harsh with developers. Yes, the iPhone app game is way harder than it seems. I'd rather deal with Apple's process as a small dev, than dealing with carriers and their nonsense. Do they even want to deal with someone making a game on the weekend for fun? Probably not. GTFO and don't come back.

haseman4• 17 years ago

I think you have to look at his audience before you judge what he's saying. If you're a major company the Apple app store is a really bad play right now...if you're nimble startup then what he's saying is crap. Your overhead is much lower so gambling 70k worth of your own development is different than the half million it costs to make a major mobile app.

fauigerzigerk5• 17 years ago

So how much of that Billion+ downloads is not free? The freemium sales should figure in the statistics somewhere as well I suppose.

geuis• 17 years ago

I personally know 2 developers who have made in excess of 6 figures, and one of those over $1 million. Yes, he buys the beer. =)

As @jasonlbabtiste points out, there are over 1 billion apps downloaded. Yes, the majority of those are free but many, many, many are not. Even if only 20% of all apps are paid for, at the minimum of $0.99, that's over $200 million dollars. That number is of course much greater, considering that apps for more than $0.99 DO sell, and quite frequently.

So this guy's rant is just that, a rant. Completely unfounded and only based on personal opinion.

boucher• 17 years ago

It's much less than 20%.

wallflower• 17 years ago

Did they win the lottery or was their success calculated?

fauigerzigerk5• 17 years ago

Are the actual numbers secret?

snewe• 17 years ago

He basically concludes that non-iPhone development has huge sunk costs (i.e. less competition), so it is where the money is:

"The bar is set too low. Anybody can play in the iPhone space. All it takes is an idea and few thousand dollars to pay someone to build it. The entire process, from idea to launch, takes only six weeks.

In my world--the Sprint, T-Mobile, Verizon, AT&T world--a game costs $50,000 to build and $100,000 to port."

wvenable• 17 years ago

The genie is out of the bottle. I don't know who's paying $25.00 a game on their mobile phone -- but if they did it a year ago, they aren't going to do it now. Now that has Apple come along and changed the market, every user is going to compare the experience and price and decide that what came before was bullsh*t.

ankhmoop3• 17 years ago

More likely: the ridiculously steep, unsustainable price competition drives most smaller players out of the market, remaining companies take advantage of reduced competition to raise prices back to a relatively sustainable level.

tylermenezes• 17 years ago

So a guy who works for a company promoting non-iPhone development says we shouldn't develop for the iPhone? Right, I should listen. Because, you know, everyone I know with an iPhone just downloaded a few trials and gave the really expensive device to their kids.

I also get the feeling that there were some fake accounts involved in getting this to the homepage.

ibsulon• 17 years ago

Alternatively, people looked at it and thought it was so absurd that everyone had to read it. :)

jsz0• 17 years ago

Honestly I have a hard time taking anything this gentleman says seriously when he starts his article saying he doesn't know anyone who buys iPhone apps. How can you have an accurate view of the iPhone app market if you don't even know any consumers who use it? I know plenty of people who buy LOTS of apps. I've personally probably spent over $100 on apps of different kinds.

"Instead, EA had to sell it to me for $5.99. What a shame."

Yea it's a shame consumers are benefitting from competition and getting higher quality software in the process. I would think by now software developers would understand if you don't offer me a good product at a good price I will just steal it and you will get $0. Be happy with my $5.99 because you could have much less with this attitude.

frossie• 17 years ago

Honestly I have a hard time taking anything this gentleman says seriously when he starts his article saying he doesn't know anyone who buys iPhone apps.

I was confused by that statement to. I personally don't know any iPhone users who haven't bought at least one app. Okay maybe some were bought with iTunes gift vouchers around Christmas, but still, the app was bought by somebody.

ankhmoop3• 17 years ago

Be happy with my $5.99 because you could have much less with this attitude.

Your $5.99 isn't enough to support developing anything but a cheap, top-50 hit of an application. Thanks to remarkably steep price competition and remarkably poor discoverability, the app store very much lacks anything resembling a long tail.

We sold a small app for $1.99, just to compete with similar apps in the space. If we'd sold our app for $5.99, we would have made a tidy profit on solid initial sales and moved on to make another application. However, at the $5.99 range we're competing with much more polished and comprehensive applications. This left us barely covering our development costs at the $1.99 price, with our sales rapidly declining after the first month.

fauigerzigerk5• 17 years ago

Your $5.99 isn't enough to support developing anything but a cheap, top-50 hit of an application

I can hear traditional airlines grumble: "For 50 USD/EUR we can't even serve proper meals, assign seat numbers or use central hub airports"

haseman4• 17 years ago

In short, what this guy is saying is correct...but only for major mobile software houses. (Which I assume you guys aren't part of)

Here's the longer version:

I've been a mobile software developer for 6 years. I've written software for BREW, JavaME, Android, to name a few. I've also published a book about Android (msg me if you want to know the title) so I have a little experience on the subject.

What we're seeing, essentially, is new money vrs old money. In the old way, one's relationship with the carrier was valued above all things. They were the gatekeepers of their respective markets. What they said went, and that was final. But it wasn't always this way.

In the beginning of the BREW and j2me world, it was a free-for-all. Anyone could get rich with a ring tone or wallpaper app. Over the years, however, the big players crowded out the amatures and what's left is a pretty stable system where only the well connected can make any serious money. Deck placement and promotion matter above all else and it's through these two things that the carriers control their app stores.

Fastforward to today, and what you'll see is what was happening in the early days of the GetItNow/MediaMall. A few amatures are getting rich and the big guys have to slug it out with every nerd in his or her basement...The lesson, however, is that it won't always be this way. So make you're money, corner your market, and build your start up right now. The market is, in my humble opinion, stabilizing away from the basement programmer and back to the big guys.... The days of fart apps at #1 are passing, but that doesn't mean you can't make money on it in the mean time.

newsio• 17 years ago

Out of curiosity, what do you think of the fragmentation of mobile platforms, that makes it difficult to develop for/port apps from iPhone -> BB, etc.?

What's your medium-term view of the market, over the next 1-3 years? iPhone is the buzzword now, what about the potential of BB/Pre/Ovi/Windows Mobile?

haseman4• 17 years ago

You're straying into consulting land ;-)

In short:

Win Mo: Stable, no big wins or losses

Brew: uh, yea no comment (I think the developers conference was canceled)

Java ME/BB: Blackberry needs to innovate towards the pre/android or it's going to stagnate and die. Java ME needs to die. Haven't had time to look at Java FX yet.

Pre, I think, will go like Android did(except it looks a lot better) there's HUGE hacker appeal but it will probably take 2 years or so to take off.

quizbiz• 17 years ago

I misunderstood the title at first to suggest that if you want to make big money, you can't have expensive gadgets...

tjmc• 17 years ago

What a blatent, self interested diatribe. What's his complaint exactly? That the platform is too easy to develop for? That middle men like him aren't getting a cut of the action? That we don't have to deal with the dinosaur carriers directly anymore? Sounds like a good thing to me.

robryan• 17 years ago

Very much a self interest article.

As for EA's pricing, there's no rule that says you need to make a profit off every product you put out. It wouldn't surprise me if a big games company made free iPhone versions of there games to drive interest in the console/ PC versions.

drewcrawford• 17 years ago

Part of the fail here is comparing the iPhone 3GS to BREW devices is like comparing a Mac Pro to an Apple ][. As hardware gets better, the same piece of software becomes less and less valuable.

True, you're always going to have people playing Scrabble. But in this brave new world of accelerometer location-aware streaming video social network 3D compass games, Scrabble simply can't command the $25 it used to.

Developers are just scratching the surface of what can be done with the hardware in a latest-gen smartphone. 2D bitblitting and 16K WAV SFX aren't going to pull in millions anymore. Sorry to crash your monopoly.

zaidf• 17 years ago

Could it be because the iPhone's removed the need for people like you?

orangecat• 17 years ago

So an oligopolist is whining that he now has to deal with competition, and I'm supposed to feel for him? Sorry Konny, welcome to real capitalism.

fauigerzigerk5• 17 years ago

I was thinking something similar. But my question is this. Are these lower prices the result of a better functioning market, or are profits just shifted away from developers to a new even more powerful middleman, which is Apple? Do scrabble playing customers end up paying less overall, including hardware and software? It's not a rethorical question. I really don't know.

octover• 17 years ago

When I first told an acquaintance here in Sweden about the terms Apple has, 45 days to make payment and 30% cut, he looked shocked. Turns out cause that is such a great deal for developers compared to what you will get from any other player in the industry. Sure you might be one of 50 games on T-mobile and able to charge $10 for the smallest things. Truthfully it's a good price for the costs involved, the percentage the carrier takes and the middlemen to even get to the market.

People need to realize about the iPhone is that while the App Store is great, in some regards it makes people think it's the end-all-be-all cure. That there is no need to have a polished well designed application and that marketing will just take care of itself. I think the race to the bottom will be solved once the gold rush is off and developers realize they still want to be able to eat. Right now cause too few knew what the market would look like priced their apps too low and it was a snowball effect. The market will rebound, users will either pay for quality or go without.

If you're trying to make money, dump your iPhone strategy

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