App Development: Doubtful Return on Investment

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 .

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