So, Exactly How Much do App Developers Make on Their Hard Work?

So, exactly how much does an app developer make creating apps for the iPhone?  The answer might just surprise you.

According to Tomi T Ahonen at the Community Dominates Brands blog, development of an app costs an average of $35,000, and income for that app in a one-year period is about $682 after Apple takes its cut.  This means to break even on the cost of development of the app in the first place could take 51 years.

That’s a pretty shocking figure.  And while there are some developers out there making millions, there are many more that have pretty much lost their shirts creating apps for the iPhone.

Being a bottom-line, gotta-make-money-or-what’s-the-point kind of gal, these figures are pretty shocking to me.  Why would anyone even bother to make an app, when the income potential is non-existence?  How do you pay yourself back for your time, effort, and make enough cash to fund future development so you can upgrade your app later?  Seems like a losing battle.  And it certainly doesn’t help that Apple has such arbitrary and capricious methods for approving (and disapproving) apps that are submitted.

I admit I’m not economist, but it seems to me this is a no-win for most developers.  There’s no incentive for doing it.  So why are developers continuing to work in this environment?

I do recommend reading Tomi’s other blog posts about how to monetize yourself with development, especially his entry on where the biggest potential growth is (and it might surprise you too), The Digital Klondyke, inside the Cyber Eldorado. Why YOU should go mobile now and fast.

Comments

  1. says

    Viva capitalism! That is software and business in general, 80% dross and 80% of the profit generated by the top 20% of achievers.

    Contrast with the Google App store where your only reward is minute micro-revenues from Google advertising. Developers are free to set their price so how exactly are Apple any different from any other retailer who take a cut for selling stuff created by other people?

    Because they are Apple, that makes them a great target for criticism with some dodgy cobbled together figures in that report (which I have no real desire to pull apart right now).

    With the right kind of arguments you can paint any picture you like…

  2. susabelle says

    C’mon John…I wasn’t dissing Apple. I was pointing out that app development doesn’t make any money, and that doesn’t have anything to do with Apple’s taking a cut (which they definitely should be doing, IMHO). I don’t have figures for Android apps or I’d have shared them as well. Check out the second article. It’s actually pretty fascinating, if long.

  3. says

    As a long time listener and reader of the GNC, and a brand new first time developer of iPhone Apps (Not sure I can call myself a ‘developer’ yet), I will put in my 2 cents.

    I made my App in about a month only working on it a couple hours a week here and there. Even if I paid myself well, I don’t think I would come near the $35,000 average. Hell, I even checked with outsourcing and it would have cost me about $600 give or take a little.

    That said after a week on the store with no promotion what so ever my app is selling pretty well. Better than I expected is what all I can say. I am not sure if the TOS allows me to say what I make so will play it safe.

    The best thing about the Apple Store is that it’s open 24/7 all around the world with a potential for millions of customers. I think I will take those odds :-)

  4. says

    The $35,000 “average” cost to develop an iPhone app seems to be more than a bit high to me. Wasn’t Apple making a big deal about a young kid still living with his parents that developed an iPhone app that made a lot of money from it not that long ago? Also, a lot of app developers have other jobs. It’s possible they are taking “professional” programmer rates and arbitrarily multiplying that figure by the average number of hours it takes to write an app so they can come up with an arbitrary figure in order to make a point.

    Even if we take the $35,000 dollar figure as being true, the profound lack of financial success doesn’t seem to be slowing down app development at all.