Popping the iPhone Bubble

I read a very interesting article this week. For those put off by the wall of text that the link is, I’ll summarize it thus: the author analyses all the available data on App Store sales to calculate average sold App prices ($3.95), the average spending on apps per device sold (around $14 a year), free app downloads per device (about 80) and the average income of an iPhone App Developer (about $3000 a year). That’s pretty bleak.
But the analysis doesn’t end there. No, the App Store resides in a place described in one of my favourite books as Extremistan: where the way we think of averages doesn’t apply like we expect. The success of the few (like Angry Birds, with over 4 million downloads) skews the average, while the vast majority of apps exist in the long tail of the bell curve, earning bitter nothingness. After crunching the numbers: only HALF of all developers will make more than about $600. And I thought the average was pretty bleak.

Things are far from hopeless – in Extremistan the top few take the lion’s share of a near limitless success, but the smart are never truly dead. It’s always possible to carve out a living by targeting the right niche, and I’m almost certain this is exactly what drives Flower Garden and similar games.

Finally, the post concludes with a reminder of just how few people own an iPhone. 3%. It’s a small number. iPhone doesn’t even make the top 10 smartphones list. In fact the author goes so far to suggest that the savvy developer should target iPhone last of all the mobile platforms.

But its here that I disagree with the original article. Sure, 97% of people don’t own an iPhone – but only a very small percentage of those people would buy apps or even have access to them through their phones or networks. The iPhone, and by association its rival platform Android, is an environment where people expect to buy apps. An average of $14 spent per handset – how likely is it that there are people spending thousands upon millions of dollars skewing that figure? Not very. And as most of those apps bought tend to be games, games developers have a slightly better chance of finding a niche and making money than any other app developers. Luckily, that’s what I’m working on right now…

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