App Development: Doubtful Return on Investment

Posted by Sam Churchill on

The App businesses is not making enough to survive, according to VisionMobile’s latest Developer Economics report.

The report says that half of iOS developers, and 64% of Android developers are operating below the app poverty line (identified as making $500 per app per month).

While it may seem like a reasonable profit for work that is already completed (once an app is released), one needs to see a return on their invested development time –but there is also a need to see revenue to compensate for Apple licensing, hardware, and ongoing support as required.

Some 24% of all app developers are making nothing at all (and 23% are bringing in under $100 per month).

Only 1.6% generate the most app store revenue (many making more than $500,000 for each app per month).

Other factoids from the VisionMobile report:

  • HTML5 is the most widely used at 42% of developers with Java, the native language on Android, the next most popular at 38%.
  • A surprisingly high 47% of iOS developers and 42% of Android developers are using something other than the native language on their platforms.
  • 67% of mobile app developers primarily target consumers and 11% target professionals directly. The 16% of developers who target enterprises are twice as likely to be earning over $5k per app per month and almost 3 times as likely to earn more than $25k per app per month.
  • Games dominate app store revenues, yet most games developers struggle. 33% of developers make games but 57% of those games make less than $500 per month.

Jared Sinclair reveals the hard facts about app development — it is very unlikely your hard work will be compensated, compared to a “real” job. He profiles the particulars around developing his RSS reader, the Unread app (iPhone and iPad).

Unread for iPhone has earned a total of $32K in App Store sales. Unread for iPad has earned $10K. After subtracting 40 percent in self-employment taxes and $350/month for health care premiums (times 12 months), the actual take-home pay from the combined sales of both apps is:

$21,000, or $1,750/month

Considering the enormous amount of effort I have put into these apps over the past year, that’s a depressing figure. I try not to think about the salary I could earn if I worked for another company, with my skills and qualifications. It’s also a solid piece of evidence that shows that paid-up-front app sales are not a sustainable way to make money on the App Store.

Posted by Sam Churchill on Tuesday, July 29th, 2014 at 10:06 am .

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