Altabel Group's Blog

Is it possible to enrich yourself by selling iPhone applications?

Posted on: December 24, 2009

Not long ago Apple announced that its App Store boasted 100,000 applications available for download and those apps were downloaded more than 2 billion times in 77 countries. Numbers seem to be impressive. And promising for those dreaming to enrich themselves by selling their iPhone applications. But the question actually is what is concealed beyond these numbers?

Throughout various news, articles and forums I found a couple of interesting facts. Believe they are worth sharing with you:

  • about 30 percent of Apple’s App Store downloads are paid applications;
  • the average number of downloads for a paid application is 9,300, compared to about 71,000 for the average free application;
  • half of all paid apps are downloaded 1,000 times or less;
  • only 10 percent of them get close to 75,000 downloads;
  • paid downloads have reaped close to $1 billion in overall developer revenue since the online iPhone catalog was launched;
  • the average number of downloads for a paid app translates into an average revenue of $12,100, with a net to the application’s author of $8,500.

So how do you feel what your chances to earn much from selling iPhone apps are?

Somebody will say – “Hey, guys, the arithmetic mean can be misleading!” Surely, these are average results, not common ones.

In reality App Store sales revenues are extremely disproportionate. The situation could be described like this: “A small segment of developers does dramatically better than this average. Most does much worse“.

The statistics proves this statement:

  • the top 10 percent of paid applications average nearly 75,000 downloads;
  • the second 10 percent of applications fell to a mere 9,232, slightly less than the overall average cited above;
  • the third 10 percent fell by more than half that, to 3,849;
  • 50 percent of all paid applications have an average download of less than 1,000.

Thus, while certain developers experience “gold rush”, others have low if any return on their investments of money and time. Looks like a lottery indeed and the next point of Apple’s App Store failure.

From your point of view what could prevent app’s sales revenue accumulation failure here?

At first glance prices per applications could be considered a main factor. And it is partially so, but please have a look at the findings below:

  • the average 99 cents application is not downloaded substantially more often than the average $4.99 application.
  • the 99-cent applications have an average of about eight or nine uses, the lowest number for all paid application categories.
  • the $4.99 programs have an average of nearly 20 uses.

but when application’s price doubles to $9.99, the average number of uses nearly halves, to about 11.

It means that within a certain range users are not price-sensitive and do care about the quality of applications.

As well the survey found an interesting fact that paid applications overall were used slightly more often and for somewhat longer periods than free software:

  • the average number of user for all free applications is about 8-9;
  • for all paid applications – just over 10.

The reasons for this difference could be rather tricky – it could reflect application quality or increased user “attachment” to something that actually cost them money.

And what do you think of all this stuff? Perhaps you could share your personal experience with folks.

Helen Boyarchuk
Altabel Group

1 Response to "Is it possible to enrich yourself by selling iPhone applications?"

Hey! Fine post! But this website is still loading pretty slowly.

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