Most iPhone application developers are not making a profit

The majority of iPhone application developers are not making large amounts of money, and should not enter the industry with the anticipation of creating a lucrative business, a new survey warns.

Apple’s App Store has gained considerable attention for its incredible success stories, with some application developers quitting day jobs and earning hundreds of thousands of dollars for a few weeks’ work.

One example is US developer Ethan Nicholas, who developed an artillery game called iShoot that earned him $37,000 in a single day.

But the new survey, undertaken by Britain-based game consultant Adam Martin, finds that over half of the 85 development teams surveyed have earned less than $15,000 for their work, and 33% have earned less than $250.

Only 1% earned between $500,000 and $2 million, 1% earned $100,000-$250,000 and only 2% made between $15,000-$50,000.

Application developer Keith Ahern, whose development studio MoGeneration has released some of the most popular iPhone apps, says developing apps can be a lucrative business but it must be approached like any other industry.

“When you get a return on investment that sees profit in six months, that’s a good arc in every other industry. The App Store is not even one year old, and when you have a solid business proposition and you’re prepared to wait six months then there are a lot of profitable businesses out there.”

“How many industries have there been where you can make $10,000 in two months for doing one week’s work? It’s exceptional. If you step back, pick your niche, do your work in marketing and everything else, then you can make it work.”

Martin said there were two outstanding elements in his survey. Firstly, most developers had not made games or applications before and secondly, several of the businesses had low business costs.

He warned other developers to immerse themselves in the practice of software development to gain experience, and to keep costs “absurdly low”.
“The current tactic – relying on ‘getting a hit game’ – is one of the riskiest and most foolish business plans in the world; they need to learn to make a profit without that one-in-a-million chance,” he said.