How much money do app companies make
Earning Money with Mobile Apps: Reality or Myth?
At first glance, it might seem easy for mobile app developers to make money. You simply program an app that you believe will be useful to as many users as possible, put it in an app store, set a price and wait for the money to be received.
But reality is not as simple as many people might imagine. The study "Developer Economics 2011" (PDF) by VisionMobile has now examined for the first time how much and how money can be earned with mobile apps. It also examined why developers choose one or more platforms and neglect others.
The first priority for the developers is the range. Direct sales are only about a quarter important (graphic: VisionMobile, license CC-BY 3.0).
When developers decide for or against a platform, only a good quarter care about how high the sales potential is. Much more important is whether the platform achieves high market penetration. Operating systems that have only a small market share, such as Windows Phone 7 and WebOS, are avoided by developers.
Of course, this consideration does not take into account that the developer ecosystem is extremely complex. Not every developer sells their software through an app store. Many software houses specializing in mobile apps work on behalf of customers for a fixed price and are not involved in the revenue from app and in-app sales.
For others, a mobile app is only a means to an end, for example for services such as MyTaxi and Bringbutler. The providers earn commissions when a customer orders a taxi or a pizza. This is about attracting customers, not selling an app.
Sales in app stores and advertising are at the top with direct sales by the developer (graphic: VisionMobile, license CC-BY 3.0).
"Classifying developers is at least as complex as defining customer segments. There are hobbyists, start-ups, freelancers, system integrators and contract developers. Everyone has different goals, attitudes, priorities, needs and wishes," the study notes.
Only about half of the developers earn from the success of the app. Of this, 44 percent receive commissions from their clients. 53 percent market their app themselves. Of the latter group, 23 percent offer their app in a store for a fee. After all, 20 percent try to finance their development costs with advertising. Only eight percent of developers use in-app sales.
App stores have sparked a kind of gold rush among developers. The ability to sell or purchase all apps from one central location is valued by developers and users alike. Alternative stores, which, depending on the platform, can only be used with a jailbreak, do not play a significant role for commercial apps.
Low developer satisfaction with their earnings
For many developers, however, the situation is unsatisfactory. Around a third earn less than $ 1,000 per app in total. If you take into account development times of a few months and a reasonable imputed entrepreneur's wage, the overall result is a loss.
Developers of mobile apps are mostly dissatisfied with their income (graphic: VisionMobile, license CC-BY 3.0).
So it shouldn't come as a surprise that most developers are dissatisfied with their earnings. The greatest satisfaction of the developers is achieved by iOS. In second place comes Java ME, that is, typical "Jamba savings subscription apps" for so-called feature phones. Android is in the middle, behind Symbian and in front of Blackberry. Windows Phone developers have the least satisfaction with their earnings, mainly due to the low distribution of the platform. However, the earning potential with iOS also largely falls short of the developers' expectations.
Nevertheless, there are huge differences in how much money can be made with an app. Vision Mobile has rated the average earnings per app on the Symbian platform with an index value of 1.0. According to the study, iOS developers earn 3.3 times as much per application, followed by Java ME with 2.7 times as much. Blackberry (2.4) and Android (1.7) follow. Mobile web apps, i.e. apps for mobile browsers, have an index value of 1.6. Windows Phone is not included in this consideration.
Android is not fragmented
The Android platform is often accused of being fragmented, as many manufacturers make numerous adjustments, such as HTC with its Sense surface. There are also big differences between the smartphone and tablet line.
Yet the study shows that the concept of device compatibility testing works. Although Android is an open source operating system, every device must pass a rigorous test before it can use the Android name and gain access to the market. Many inexpensive tablets in particular fail this test. However, there are problems in practice. For example, anyone who tries to install Firefox Mobile on an HTC Legend will fail because the Mozilla browser requires at least an ARM V7 CPU. However, this also partially applies to iOS, for example when an app requires a certain iOS version, but the device does not support it.
iOS and Android are way ahead when it comes to reaching all devices on a platform with one app (graphic: VisionMobile, license CC-BY 3.0)
VisionMobile has examined how many versions of an app have to be developed in order to eliminate problems with certain devices and models. Unsurprisingly, the effort for iOS is the least. The number of iOS devices is limited. There are currently four iPhones and two iPads.
In second place, however, comes Android with all its model diversity. HTC alone offers more Android phones than there are iPhone models. However, it is not conclusive that Windows Phone does relatively poorly. This can only be explained by the fact that Windows Mobile is also included here, because when it comes to internal values such as CPU, GPU and display, Windows Phone devices are like one egg to the next.
Android is the easiest to learn
A big problem when developing apps is that the different platforms have completely different development tools and architectures. Microsoft relies on .NET, C #, Silverlight and XNA. For Android, apps are usually developed in Java, which is then translated into a proprietary byte code. For iOS devices, Objective-C is the preferred language.
Android is easy to learn. iOS is only in the middle (graphic: VisionMobile, license CC-BY 3.0).
For an accomplished programmer, learning new languages and APIs is part of the day-to-day business, although the language is often secondary. Familiarizing yourself with the API architecture requires more effort. There are big differences when it comes to learnability of the various developer platforms.
To master the Android platform, developers need an average of just under six months. For Java ME, on the other hand, it's almost ten months. For iOS and Windows Phone, developers set between six and seven months.
Microsoft offers the best development tools
In terms of developer tools, on the other hand, only Microsoft received top marks. iOS, Android and Blackberry only achieve average values. Anyone who has ever worked with Visual Studio and then switched to Xcode or Eclipse in order to develop for Mac OS or Java will immediately appreciate the excellent technical documentation that is missing on other platforms.
Only Microsoft received top marks for the development tools. When it comes to the business criteria, however, Windows Phone cannot score (graphic: VisionMobile, license CC-BY 3.0).
However, Microsoft does not enjoy a good reputation when it comes to business criteria, sales potential, high market penetration and low costs for development tools. The free development environment for Windows Phone only contains the Express Edition of Visual Studio, which quickly reaches its limits in professional development. For example, Android developers can use versioning tools like git or svn for free. They integrate well with Eclipse, but are less suitable for Visual Studio Express.
At the top of the wish list is access to undocumented APIs (graphic: VisionMobile, license CC-BY 3.0).
And there's another reason developers don't like Windows Phone. First place on the wish list is access to undocumented APIs. They would even pay for it. Microsoft has completely sealed off the kernel for developers, so that certain things like TCP and UDP sockets, access to the camera and the compass are not possible. That will change with the Mango update, but developers will still not have access to low-level APIs at the kernel level, which sooner or later means that some things simply cannot be implemented.
Summarizing the results of the study, it can be stated that making quick money with apps in the various app stores is more of a myth than a reality. Many developers don't even make $ 1,000 per application. However, sales are often not the goal, but rather to reach and retain as many users as possible and to earn money from other services.
Android is the most popular platform for developers even before iOS. 67 percent currently program for Google's operating system. For iOS, 59 percent develop only 36 percent for Windows Phone. It looks completely different with the further planning. 35 percent want to continue using Android in the future. Windows Phone want to use 32 percent. 27 percent plan to program for iOS. The discrepancy in Windows Phone is apparently explained by the fact that the developers are waiting to see whether the deal with Nokia will help Windows Phone to break through.
For developers, the spread of the platform plays the decisive role. Other factors, such as the quality of the development tools, training time, and low development costs must be subordinate to this.
Subject pages: Analyzes & Comments, Android, Cell Phone, IT Business, Java, Market Research, Mobil, Mobile, Platform, RIM, Smartphone, Software, Windows Phone, iPad, iPhone
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