Wednesday, October 07, 2009

The Coming IPhone App Crash

Newsweek has an article on how few IPhone developers actually make money. This is probably the first part of a market shakedown.

The math is pretty simple. It takes $20,000-$100,000 to develop an app. Most apps are priced low enough to be impulse purchases - around $1 and the developer only gets part of that amount. This means that you have to sell tens of thousands of apps before you break even. That might be possible except you are competing with 80,000 other apps. Unless you get very lucky and get a lot of word of mouth, no one will even find you app so you might have to spend additional money on publicity.

There is nothing mysterious about this. A new market opened up and started a gold rush. When this happens, only a very few get rich. Most people lose their shirts. Sometime soon, a lot of IPhone developers are going to move on to some other occupation.

This is a familiar pattern. When the IBM PC was first introduced there were a lot more programs available for it. A lot of those have fallen by the wayside over the years. A lot of web sites have come and gone in the last 15 years, also.

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