What's The Chance Your iPhone App Will Succeed In The App Store?

There’s been a lot of hype about the boom going on in iPhone App development. Small-time developers have been rushing to the new platform as a way to circumvent the standard pay structure and make it for themselves. And who can blame them with stories like this in everyone’s minds. You know it’s gotten extreme when someone develops an App for no other purpose than to own it.

This all begs the question: How likely are you to actually make your money back and truly succeed in the App Store? Even with all of these glowing reviews of the market from major news sources, people are still wondering if their chances really that good. There’s market saturation to consider, after all. 50,000+ applications is quite the entry barrier. Well apparently, the chances are much worse than what’s written.

Finding concrete figures was a pain, in part because Apple only tracks sales figures for Apps for the previous seven days. The only way to get any sort of numbers was through admob, which tracks data from those Apps that use it. This isn’t an aggregate sample, but it’s definitely representative enough.

What’s instantly clear from this is that most of the user activity is going towards the top bunch of Apps, with most tailing at the end. You also have to remember that at least half of the Apps for the iPhone are free, so many of these numbers translate into cash only indirectly, through advertising. For those who don’t use admob, it translates into even less.

You have to remember that most users aren’t going around picking up Apps willy-nilly. On his blog, Rick Strom puts it more clearly, “In order to place #34 on the social networking charts, you need 30-35 downloads a day. At the standard app store pricing of .99, and after Apple takes its cut, that means your app needs to bring in a little over $20 a day to chart at that position. And social networking is a popular category. […] If the apps on the category charts are doing those sorts of numbers, what do you think the rest of them are doing? Nothing. Absolutely nothing. The aren’t selling at all.”

Let me put it more bluntly: “Smart phone users around the world generally download about five software applications each, even iPhone users” according to a market researcher. What’s the chance that, out of those five, even one will be yours?

Now, I don’t mean to be all fire-and-brimstone, but current and prospective App developers need a healthy dose of realism. It’s true though, that even at 50,000+ already in the market, you still probably have a slightly better chance on the App Store than you do just throwing things out raw against the full internet and seeing if they stick. (For one, your browser doesn’t have a built-in sales mechanism). It’ll be there soon though, at the current rate of entry.

One of the clearest reasons to me for the problem is that Apple is going by a digg-style system, where popularity gets you to the top of the list, which makes you more visible, and thus begets more popularity. Great for those already winning. Not so great for everyone else. With a problem this obvious though, there’s already movement to correct it. Steve Demeter – the developer of Trism, a popular iPhone App – is working on a solution called Onyx Online, which is more like the system Xbox Live has. It’s still under development, so I’ll wait and see if it really solves the problem.

On a side note, Apple’s contract for iPhone sales requires that they pay you your royalties from a territory only after you’ve made at least $250 in that territory, so don’t think you can make some quick program to make a hundred or two. You either make bank, or you ain’t got jack. There’s a good post at this blog detailing one mans attempt to get a small program through the process of becoming a fully-fledged iPhone App, which includes information like that little tidbit.