How Hard is it to Make Money from A Mobile App?
By: Hillel Fuld
While the whole app industry is heating up and seems to be the place to be when it comes to making some quick cash, it is definitely not as easy as you think. We have all heard the insane stories about how developers spent a small amount developing an app like iFart, Doodle Jump, Angry Birds, and others, and succeeded in making an absolute killing in no time.
It is important to put things in perspective and realize we would not have heard these stories if they were not extraordinary and if they were not the exception to the rule. As a person with a lot of contacts in the mobile space, I can tell you that it is not easy developing a mobile app and then successfully promoting it so it will get noticed and downloaded. In fact, besides the marketing aspect, there are many different stumbling blocks that stand in the way of mobile app developers when it comes to monetizing their work.
We have already discussed the Android fragmentation issue, but just to recap. An Android developer who is making an app is going to have to make various versions for it to be compatible with all the different iterations of the Android operating system. What works on Android 1.6 (yes, some phones are still running this dinosaur) will not work on 2.1 and what works on 2.1 with most likely not work on 2.2.
In addition, there is the actual device, some with 3.5 inch screens, others with 3.7, and then there are the 4.3 inch monsters, not to mention the Dell Streak and its 5 inch display. Your app needs to work across all those devices if you want to reach serious download numbers. Same goes for processor speed, RAM, and 3d capabilities. This fragmentation exists on Android, it exists on BlackBerry (some will say it is even worse on BlackBerry), and in my opinion, it now exists (albeit on a much lower scale) on the Apple platform with the Retina display, the iPad, and older generation iPhone and iPod Touches.
Moving along, there are many other factors that complicate the lives of mobile developers who want to make a quick buck, but in terms of challenges, especially on the Android platform, nothing makes it more difficult than the overly free Android Market. According to a recent Distimo study, a whopping 57% of the Android Market is free apps. To put that in perspective, only 28% of the iPhone App Store is free. You can see more numbers from the study here.
So, if you are a developer trying to offer the community a premium app that truly offers advanced functionality and impressive features, how can you possibly convince people to pay for your app when they have 57% of the market available for free? Obviously, if your app is just that good and does not have a free alternative, then people will pay. In fact, I just this week heard about an Android app that is making an absolute killing, but I would say the app walks the tight line of morality, so I am not going to mention it here.
So, most of the Android Market is free. Some might see this as a challenge but not one that cannot be overcome. Like I said, if a developer creates an app that truly fills the need of consumers and it is designed and implemented well, there is no reason they cannot charge for the app, right? Wrong!
Out of the 46 countries in which the Android Market is available, only 13 of them are able to download paid apps. It gets worse. 13 countries have a Market that supports paid apps, but only 9 of them support paid app distribution, so even if your country has the ability to support downloads of paid apps in the Android Market, there is still a chance developers will not be able to offer them. Sounds pretty crazy to me. So crazy that an online petition to Google asking them to increase the number of supported countries has been started. You can read about it here.
I am not even going to mention the BlackBerry App World, which is not even available in many countries, so users have to go search for apps in independent app stores like Mobinhand or GetJar. What is this? 2002?
So far, we have fragmentation, free app dominance in the various stores, and even some serious location dependent issues standing in the way of mobile developers and their success. Anything else? Yes!
For years, people have tried to convince me to jailbreak my various Apple products. In addition to the problem of jailbreaking and then upgrading the device, there is one other reason I have never jailbroken any of my various devices. From what I understand, the main advantage of jailbreaking, especially with the new OS supporting multitasking (on the older iPhones, you could jailbreak, then download an app to use apps in the background) is the availability of all App Store apps for free. Yes, some very “generous” hacker offers all apps, no matter what they cost in the App Store, for free to the “Jailbreaking community”.
This is of course illegal but beyond that, I feel very strongly that this is such a wrong thing to do. I am not going to preach here, nor am I in the position to do so, having downloaded my share of content from the Web, but I see no reason that a developer who spent months and sometimes years working on an app should not make a Dollar or two for his/her work. The fact that there is a whole community stealing from these developers is yet another stumbling block preventing developers from succeeding.
Before you jump down my self righteous throat, I am the last person to support Apple’s jail-like mentality, and I personally think Steve Jobs needs a long vacation to unwind, but stealing from developers is not the way to fix it.
So to recap, fragmentation, free apps, location issues, and the jailbreaking community. I have not even discussed the most basic issue here of promoting your app so it even gets noticed by consumers. An entire industry is forming around the question how best to promote mobile apps. It might be the biggest challenge of them all.
In conclusion, having many developer friends, I see things a little differently than the average consumer, and having read the recent Distimo study, I couldn’t help but think what these numbers meant for developers.
Having said all that, if you have an idea that you think can be a hit, this space is so hot right now, and chances are, assuming the app does not exist, that you can make some serious money selling the app. Truth be told, if you are interested in developing a mobile app, the iPhone platform (including the iPad) might be the smartest choice right now, at least until Google works out its issues with the Market.
