After the App Goldrush
July 29, 2014 8:27 AM   Subscribe

The app market is becoming a mature, developed industry, with vastly increased commoditization compared to its early days. Competition is ubiquitous, relentless, and often shameless, even in categories that were previously under-the-radar niches. Standing out requires more effort than ever, yet profits are harder to come by than ever. Full-time iOS indie developers — people who make the majority of their income from sales of their apps, rather than consulting or other related work — are increasingly rare.
App Rot: Marco Arment (creator of Instapaper and early Tumblr CTO) wonders if the heyday for app makers is over even when Apple and Google have paid out a combined $15B to developers in the last 12 months.
posted by gwint (49 comments total) 16 users marked this as a favorite

 
My app periodically wakes up and checks how long it has been since you last used an app, and for how many times. Based on a tuned heuristic that checks online for other metrics, it may or may not delete that app. Eventually, it deletes itself.
posted by clvrmnky at 8:36 AM on July 29, 2014 [11 favorites]


There's been a lot of sky is falling type posts going around the iOS community lately, but it generally seems to disregard the fact that the App Store was never a "gold rush" for any but the most privileged developers. And now that some of the early winners have to deal with many of the same challenges the rest of us have always faced, everything is terrible.

It must be nice to be able to complain when you quit your job to pursue your hobby, "haven’t done any major promotions", and made forty grand.
posted by frijole at 8:41 AM on July 29, 2014 [5 favorites]


It must be nice to be able to complain when you quit your job to pursue your hobby, "haven’t done any major promotions", and made forty grand.


It's not someone's hobby, it's their profession. These are all people who could presumably get a job at a big company or startup and make far more $40K. That's the point of all these stories. Do salaries support going indie? Probably not.
posted by chunking express at 8:48 AM on July 29, 2014 [15 favorites]


Counterpoint: Kevin Kelly writes "You Are Not Late," a piece reminding us that all the coolest stuff has yet to be invented:
Looking back [to 1985] now it seems as if waves of settlers have since bulldozed and developed every possible venue, leaving only the most difficult and gnarly specks for today’s newcomers. Thirty years later the internet feels saturated, bloated, overstuffed with apps, platforms, devices, and more than enough content to demand our attention for the next million years.


But, but…here is the thing. In terms of the internet, nothing has happened yet. The internet is still at the beginning of its beginning. If we could climb into a time machine and journey 30 years into the future, and from that vantage look back to today, we’d realize that most of the greatest products running the lives of citizens in 2044 were not invented until after 2014.


So, the truth: Right now, today, in 2014 is the best time to start something on the internet. There has never been a better time in the whole history of the world to invent something. There has never been a better time with more opportunities, more openings, lower barriers, higher benefit/risk ratios, better returns, greater upside, than now. Right now, this minute. This is the time that folks in the future will look back at and say, “Oh to have been alive and well back then!”
And I think he's right, and maybe we need to raise our eyes a little and look past the app market.
posted by wenestvedt at 8:49 AM on July 29, 2014 [17 favorites]


All in all, I really only needed about around 20 'apps'. Half of which come installed on any smartphone (email/phone/text/weather/camera/calendar), a few from Google (maps, Gmail), a few for music (Songza, Amazon Music, SoundHound although that feature is now built-in to iTunes), a few for hobbies (Everytrail, Goodreads, Duolingo, Feedly), and a few for transit (Uber, and my city's local mass transit app).

Everything else is sort of disposable: games, novelty or shopping apps. What's amazing is how few companies the apps I use come from: especially now that Google bought Songza, and Amazon bought Goodreads. Really only about 4 start-ups have a place on my homescreen. It would be exceptionally difficult for an app to bring some new core functionality to my phone that I can't live without.
posted by 2bucksplus at 8:57 AM on July 29, 2014 [1 favorite]


"There's never been a better time to invest in tulip bulbs."
posted by entropicamericana at 8:58 AM on July 29, 2014 [8 favorites]


Jason Sinclair is being disingenuous with himself if he truly believes he should be selling more apps because "RSS is still popular". Sure, 200k people subscribe to Daring Fireball, but there are 800 million iOS devices out there. Assuming all of those subscribers are on iOS, he is limiting himself to 0.025% of iOS install base. RSS is an extremely niche, dying technology. I love the app (and I used it to to read Marco's article), but it's for super-nerds.
posted by azarbayejani at 9:00 AM on July 29, 2014 [2 favorites]


chunking express: It's not someone's hobby, it's their profession.

Its something that started out as a hobby that he had the chance and ability to try and make his profession, but Jared is apparently not happy about the amount of work required to successfully navigate this transition.


azarbayejani: Jason Sinclair is being disingenuous with himself...

Indeed, that's basically my point, just about the whole thing, not just Jared ;)
posted by frijole at 9:04 AM on July 29, 2014


The most tragic ripoff story has got to be Threes vs 2048. These days I literally never see anyone on the subway playing this game that isn't playing 2048.
posted by nev at 9:44 AM on July 29, 2014 [3 favorites]


It's just the same thing that has happened to writing on the Internet. Tools for creating have become really, really easy to use, and there exist platforms that allow anyone to publish. Supply increases, demand does not, prices fall. Happened to writing, happened to music, is currently happening to video games, did software developers for iOS think they would be immune?
posted by zabuni at 9:52 AM on July 29, 2014


Desktop software was an $88bln/yr market in 2008, total "packaged software" (products you could order rather than custom, excluding games) in total was $135bln/yr in the same year for all platforms (including servers and mainframes). Console games alone last year was a $66bln market for the year.

15bln for a vastly larger installed base is... not good. Probably not sustainable as an industry.
posted by Slap*Happy at 9:52 AM on July 29, 2014 [1 favorite]


It would be exceptionally difficult for an app to bring some new core functionality to my phone that I can't live without.

Yeah, this is really it. There's not that much I want to add to what I can do on my phone/tablet. Now if they can improve one of those functionalities in some way that's worth a little money (e.g., Arment's podcast app may be worth it) that's a different matter. But doing it on the cheap doesn't seem like a way to make those improvements, so we're back to square one.
posted by immlass at 10:00 AM on July 29, 2014 [1 favorite]


It certainly seems like there was a long period where Apple could tell developers to jump, and they would say, "how high, sir?" Now developers are starting to ask whether that investment will actually pay off in increased revenue, and that it may make more sense to abandon the app entirely and work on something new.
posted by smackfu at 10:04 AM on July 29, 2014


The game is rigged to exploit the dreams and energy of young kids, who waste the best years of their lives trying to get funding of a million dollars from a bunch of investors who all know each other and are simply placing a few bets here and there, because nobody knows what will work or be a success either. And Apple or Google or handful of others can kill your business stone dead with their 'ecosystems' any time they like if you're not in with the chosen few.

You have as much chance of getting rich through apps as you do of being a global rock star.
posted by colie at 10:12 AM on July 29, 2014 [2 favorites]


There's still room for development. For instance, I still don't have my "Stab people in the face over the internet" app.
posted by happyroach at 10:16 AM on July 29, 2014 [2 favorites]


Marco buried this in the footnotes, but the context is he recently released Overcast, a new podcatcher with some unique features. Free to try, $5 for the full feature set. It's pretty good although I'm not sure I care enough about what it uniquely does to switch from Pocket Casts. And as he says in footnote #2, "I doubt Overcast will have the financial success that Instapaper did."

Marco did a classy thing in Overcast btw, putting a list of competing podcast apps right in his own app. I think that was his own personal stand against the Apple store setup.

Apple created a new software market category that did not exist before, small single purpose apps that live in your pocket. I think Marco's right in pointing out so much of the low hanging fruit has been picked. Unfortunately they set the price floor at $1. (Or worse, "free", only not actually free.) I sometimes wish Apple had set the minimum price at $5; would be a lot fewer apps, but the whole ecosystem would be different.
posted by Nelson at 10:20 AM on July 29, 2014 [6 favorites]


"The future itself has a future" --Jacques Derrida
posted by rhizome at 10:36 AM on July 29, 2014


It would be exceptionally difficult for an app to bring some new core functionality to my phone that I can't live without.

How can you know this? Every app you list is something you used to live without quite nicely. The way apps work is by making life without them worse and worse until you can't live without them. You can't know now what you won't be able to live without in the future.
posted by escabeche at 10:45 AM on July 29, 2014 [5 favorites]


Assuming all of those subscribers are on iOS, he is limiting himself to 0.025% of iOS install base. RSS is an extremely niche, dying technology. I love the app (and I used it to to read Marco's article), but it's for super-nerds.

But if only super nerds buy apps at all, what are you going to do?
posted by smackfu at 10:52 AM on July 29, 2014


There will be periodic growth in the app market as device manufacturers bring new core functionality to their phones. Handoff, HomeKit and HealthKit all have the potential to open up big areas for new app development.

I think each growth period has a natural tapering off, though, as possibility becomes reality and all the exciting new use cases get hashed (and rehashed) out.
posted by wemayfreeze at 11:07 AM on July 29, 2014


It would be exceptionally difficult for an app to bring some new core functionality to my phone that I can't live without.

True, but an app you can't live without is by definition important. I may use ten 3rd party apps total over all of my mobile devices (Tweetbot, Reeder, Threes, Kindle, Yelp, some podcast app, 1Password, Gaia GPS, ProHDR, Google Maps), but having good apps to do those things is more than enough to keep me tied to the iOS ecosystem.
posted by wotsac at 11:08 AM on July 29, 2014


It's still a great time to make something amazing, but a huge number of people have been trying to create companies not off of making something great--even something great and derivative--but by making something just derivative enough to get people to give them more money than it cost to develop. I really wish Google Play would just let me remove everything from search that was developed by a Chinese company. But their costs are lower--you really think you're going to make a sustained living in the US off of designing stupid free-to-play games? Zynga just pre-IPO thought their stock was worth $17.50 a share. The IPO price was like $10. Today it's under $3. Things are no longer making money hand over fist just because they exist, but that's good, because that's tulip country.

The down side is that this may well mean that in short order we may be discovering that, no, a competent-but-not-brilliant software developer is not actually worth more than a competent-but-not-brilliant employee in any other industry. Tulip farmers are still getting paid top dollar despite the state of the tulip market. We'll see when investors catch on to that, I guess.
posted by Sequence at 11:17 AM on July 29, 2014


It would be exceptionally difficult for an app to bring some new core functionality to my phone that I can't live without.

I'm going to disagree. Okay, fine, it's not going to be essential at the level of food or water, but if you're using a smartphone as a real smartphone - not just a phone+email+pocket watch, but a real general purpose computer - then there are going to be new apps and new capabilities that are useful, smart, and "delightful" in that scratching-an-itch-I-didn't-know-I-had way.

Before the iPhone, I never used the mobile web. (No one used the mobile web except as a "look at this!" gimmick.) Today, finding a wallet on the bench, I didn't think twice about looking at the ID, typing the name into google, clicking a couple of links, clicking a blue link to call the office number, and asking the guy's secretary to tell him to call me. Boom, wallet restored to flustered owner. This was simply impossible even 10 years ago. What about tomorrow, when I point my camera at the ID and ask Siri to contact that person?

Before the iPhone, I printed out itineraries and used paper boarding passes at airports. Now everything goes from online booking to Kayak to Flight Update - I track delays in real time, use the retina screen to display my boarding pass for scanners, rebook flights and find hotels on the go. All amazing improvements to my quality of life when I travel.

I used to love my tiny Nintendo video games on LCD screens. These days, putting the kids to bed and sitting outside the room for a few settling-down minutes, I can poke at a level of Angry Birds, try to meet the next monster up from 768 on Threes, or catch up on my Read Later list on (Arment's former) InstaPaper.

And podcasts - I didn't know how much I'd enjoy random conversations on obscure topics at ridiculous depth until I got my first iPod (the black Nano that scratched if you looked at it sideways). Now I don't know how I'd walk to and from work without these podcasts.

So maybe people have better imaginations than I do, and have foreseen that nothing new and important can be built. But predictions that nothing new will be invented usually fare poorly...
posted by RedOrGreen at 11:53 AM on July 29, 2014 [1 favorite]


But predictions that nothing new will be invented usually fare poorly...

I think the prediction is that the market isn't currently geared to reward invention. It's tilted to favor the "ecosystem vendors" at the expense of the developer and inventor, where you won't be able to make a living inventing cool, new things.
posted by Slap*Happy at 12:16 PM on July 29, 2014


I capitalized on my freakishly in-depth knowledge of the inner workings of Pac-Man, based off of nearly memorizing The Pac-Man Dossier, and built an Android game called Octropolis based off of it with substantial additions. (Not linked, if you really care it's findable from my profile, or, you know, just searchable.)

I'm rather proud of it. I think it's nearly the platonic ideal of what it's supposed to be. It's not complicated, it has some depth, and it has four different kinds of touch controls. It's also sold, to this date, eight copies, after about a month and a half.

In that time I've gotten at least five spam messages from people offering, if I game them some cash, to promote my game for me. I've looked around app review sites looking to submit and came up with a surprising dearth -- the one that looked promising admits they only get to about 10% of their queue, but will look at it quick-like if I gave them $100+.

No mobile app store I've seen does a really good job of curating its content. Maybe that's actually impossible when you offer more than a million things.

I've found that the things I enjoy most, paradoxically, are the thing that don't look quite so professional. The Angry Birds/Cut the Rope look is a strong warning sign to me that this isn't going to be so hot. Meanwhile one of my favorite iOS games is the wonderful Forget-Me-Not, which has a lot of neon and retro graphics effects, but otherwise looks like it could have been a Spectrum game.

If I could find more things like that, and fewer things with, say, icons of close-ups on the face of some random character, I'd probably get more things on the Play and/or App stores.
posted by JHarris at 12:39 PM on July 29, 2014 [1 favorite]


Marco buried this in the footnotes, but the context is he recently released Overcast, a new podcatcher with some unique features.

That's the thing. Tumblr made creating simple blogs incredibly easy and Instapaper created a category. Even The Magazine was something that finally used Apple's Newsstand in a reasonable way. Now there's a lot of hand wringing because a new podcast app or ballsy text editor aren't setting the world on fire.

Less sarcastically, Marco wrote an article about iOS7 called Fertile Ground. There's a belief that you can design a really nice app in an existing category and everyone is going to flock to it because it is modern. But large companies with successful apps have many designers on staff to make everything look good enough. Even if it's not as well designed, the icon will fit nicely on your home screen and internally it will have all the features people are comfortable with.
posted by Gary at 12:44 PM on July 29, 2014 [1 favorite]


JHarris, that Octropolis game looks nifty, and based on your posting history here over I don't know how many years, I'd be willing to bet at least $1.99 that it's a fun game, but that icon looks like something from the early days of the Android Market, where it was a wasteland of picture puzzle games.

Like it or not, icons with cartoony pictures of random characters implies a certain (admittedly minor) level of quality to most people.

Actually, I did just bet $1.99 that it's a good game.
posted by fnerg at 1:04 PM on July 29, 2014


If I could find more things like that, and fewer things with, say, icons of close-ups on the face of some random character, I'd probably get more things on the Play and/or App stores.

Ha, I was going to say Dream Quest would probably suit you and then noticed that its icon is also a close up face of a random character. Inside it looks like early 90s shareware and is really fun (though maybe a little too hard). But I guess that icon style is mandatory these days.
posted by Gary at 1:11 PM on July 29, 2014


Also, not to completely derail, but I've been getting into Pixel Dungeon lately. It uses an in-app purchase as a donation, which has no effect on Gameplay. I heard about it completely through word of mouth, though it's got it's own Wikia page, implying a certain level of popularity. I hope the guy who made it gets a reasonable amount of money, since it's actually pretty polished.

Anyway, the long tail only lengthens. I've managed to make a few thousand on the app I have in the Android Market, which is vastly beyond my expectations. It continues to trickle in small amounts of money now and again, but also isn't something I expect to make money from.

The thing is though, I've made way more money being an app developer for larger companies than I ever expect to off of my own projects. When I released something early on when Android was first released, it wasn't with the intention of making money on the app itself, it was with the intention of making something I could put on my portfolio. The Whatsapps and Snapchats of the world will always be anomalous, but for a brief moment, they were less so, and I think people were hoping it would be otherwise.
posted by fnerg at 1:18 PM on July 29, 2014 [1 favorite]


Oh, and the link for Pixel Dungeon:

http://pixeldungeon.watabou.ru
posted by fnerg at 1:25 PM on July 29, 2014 [1 favorite]


My iOS Indie-Game Numbers jazzychad writes:
Yesterday, Jared Sinclair published a very candid writeup of the download and sales numbers for his app Unread. It was very refreshing to see such an honest post and to see someone publicly admit that spending so much time on an independent app did not result in the numbers he was hoping for.
posted by boo_radley at 2:30 PM on July 29, 2014 [1 favorite]


From Jared Sinclair's article about his app, it seemed like he basically only paid attention to one part of the business: building the app. It seems unclear that he did much to understand or reach his target market. Its like someone opening a chicken pot pie restaurant and spending all their time making chicken pot pie and none of their time telling people about their restaurant (or even seeing if they would want to go to such a restaurant and how much they would pay).

If a collapse of this market means you actually have to do what a normal business would have to do to be successful, then it doesn't seem that bad to me.
posted by snofoam at 3:07 PM on July 29, 2014 [6 favorites]


Marco did a classy thing in Overcast btw, putting a list of competing podcast apps right in his own app. I think that was his own personal stand against the Apple store setup.

He's also getting affiliate $$$ for everyone who clicks through his app and buys one of the others.
posted by jenkinsEar at 4:05 PM on July 29, 2014


Wait, the App Store supports Amazon-style affiliate kickbacks?
posted by JHarris at 4:11 PM on July 29, 2014


yup.
posted by jenkinsEar at 4:12 PM on July 29, 2014


Do you know if Overcast is actually using affiliate links? I'd be surprised if it is, but I don't really know and am not sure how to find out short of asking him.

In this interview Marco talks about those links
I was surprised Apple allowed it. ... They have rules against showing unrelated apps, or showing apps that you didn’t make. ...

The reason I did that was — it was nothing weird or sinister — it’s just that this is a small market full of independent developers that I knew to some degree. I felt bad going in at a free price point, so this was a way to alleviate that, but it wasn’t that much thought put into it. It was more like, “You know what? This is a cool thing I want to do, and let me see what happens.”

I was hoping it wouldn’t be perceived as an asshole move, and fortunately it hasn’t been, because there was a little bit of a risk there. But most people have been very good about seeing it as just what it is, just something that to me is a relatively small but fun, nice thing to do, so that’s what I hope it is.
posted by Nelson at 4:39 PM on July 29, 2014 [1 favorite]


He said he was using the affiliate links on twitter. He also cited the referred download counts of the other apps, which would only be available if he was using the affiliate links.
posted by jenkinsEar at 5:52 PM on July 29, 2014 [1 favorite]




It is all about the curation. I have a horrendous time finding apps through the app store of both Android and Apple. If it was not for the fact that I go through multiple review sites and read every single ask mefi posting on computers I would not know what to look for. I can visualize what I want, sort of, but unless I get clued on the essential keyword or have someone else find it then it is really hard to get.

I am not alone. Students always ask me about what apps to use ALL THE TIME because they are not sure what to use and with Android's security issues and adware troubles it just gets kind of exhausting.

So you can have the BEST THING EVER but if I can't find it through search, you have no site for it and it not covered by a multitude of sites or you did no marketing then I am stymied on how I was supposed to give you money for your product.
posted by jadepearl at 6:38 PM on July 29, 2014


Something that would improve the App Store tee-fucking-mendously would be the ability to exclude games from top lists, searches, etc. I'm pretty sure PalmGear.com had this revolutionary ability 15 years ago.
posted by entropicamericana at 7:30 PM on July 29, 2014 [1 favorite]


Sure, 200k people subscribe to Daring Fireball, but there are 800 million iOS devices out there. Assuming all of those subscribers are on iOS, he is limiting himself to 0.025% of iOS install base.

That attitude really sums up the whole problem with the "goldrush" attitude. 200k users is a lot. Hell, it's a shitload. There have been entire platforms with developer ecosystems that probably barely broke 200,000 users. The fact that there are 800 million iOS users? Irrelevant. Obsessing over percent-saturation numbers seems like the worst sort of VC hockey-stick-curve thinking, where everything needs to either take over the world or it's not worth doing.

If you can get 200k users and build a relationship with them and get each of them to fork over a buck for a new version of your app every few years, you have a respectable, sustainable software business. Probably enough to do it as a full-time gig, if you wanted to, and add features based on what the userbase actually wants, no brainstorming what some mythical non-user wants, no desperate begging for VC cash... just, you know, an actual software business, built on actual technical merit and solving real-world problems in some valuable way.

People who saw mobile app development as a get-rich-quick scheme? As a path to "fuck you money" and a yacht next to Larry Ellison's? They'll never be happy with an end result like that, of course. But that's because they're little more than scam artists, looking for the big bust-out. Good riddance.
posted by Kadin2048 at 7:41 PM on July 29, 2014 [5 favorites]


The App Store is awful, but I'm not in general unhappy with the state of ios apps. I just kinda feel like most use cases for the phone have been explored and some neat UI tricks aren't really enough to differentiate something that's yet another take on a text editor or a weather app. IMO, if you aren't selling a service like drop box, you better be making something spectacular for me to be interested.
posted by empath at 8:18 PM on July 29, 2014


How can you know this? Every app you list is something you used to live without quite nicely. The way apps work is by making life without them worse and worse until you can't live without them. You can't know now what you won't be able to live without in the future.

This is literally why I don't have a smartphone and don't have any interest in getting one.
posted by threeants at 1:21 AM on July 30, 2014


It's literally why I don't have central air conditioning, a furnace, running water, electricity (which I call the Devil's lightn'in') or a terlet.
posted by entropicamericana at 10:44 AM on July 30, 2014 [4 favorites]


It definitely was a gold rush. Just like the PC era lasted from 85-95, the internet rush lasted from from 95-05 (a brief financing crisis in the middle of that one), the smartphone app gold rush era will probably be dated roughly 07-17. Maybe a bit shorter this time.

If you're looking for indie-friendly platforms, it's always on the frontiers. That means wearables at the moment. Glass, wear, pebble, etc. And the reason the frontiers are indie friendly is risk -- there's no proven marketplaces, customers etc. In hindsight it seems easy to predict that iOS would be amazingly popular, but it seems less easy to predict iPhones would be free on contract. Or that Google would succeed while Nokia and HP/Palm fail. Or that iPhones would even allow applications, since they didn't come that way.
posted by pwnguin at 4:13 PM on August 9, 2014


if you can get 200k users and a relationship with them and get each of them to fork over a buck for a new version of your app every few years, you have a respectable, sustainable software business

It would take awhile to get to those 200k users, and even at the peak you're grossing $100k per year at the high end of your scenario. After Apple's take, taxes, bank fees, legal fees, refunds, and various other costs you might net $45k. And that's with you doing all the customer service, accounting, and of course programming. If you're capable of producing an app that can attract and support 200k active users you can probably make 3-5x that by working for a big corporation or even just consulting.
posted by chaz at 5:25 PM on August 9, 2014


Agreed. Apple probably undercut their own platform by pushing devs to price their apps so low. App prices need to creep up in line with desktop shareware ($15-$45) to build a sustainable ecosphere for small devs.
posted by Slap*Happy at 10:03 AM on August 11, 2014


That would be a great way to make sure I (and others) don't buy any apps.
posted by entropicamericana at 12:56 PM on August 11, 2014


That would be a great way to make sure I (and others) don't buy any apps.

Who cares about the cheapskates? We've established small devs can't keep the lights on catering to you and those like you. Niche products are doomed from the start, because price points that would make them sustainable - $15-$50 - are a non-starter in the mobile world, despite being more difficult to develop than for desktop and server platforms.

If you're spending $1.99 on an app, you aren't buying into the software as a tool, it's a toy for the here and now. Tools require regular maintenance, and two bucks a customer isn't going to keep the repo man away. This leads to a strange market where there is no long tail, as the developer isn't going to make it long enough to develop a following that will sustain it until the next rev. There is no growing the business. You either make the moon-shot, or you fail spectacularly despite what would be strong sales in any other software market.

People are still plunking down $30 for console shovelware and up to $70 for top-tier titles. Maybe Steam is a better example, where long-tail titles can be used as promos for a couple bucks each, but new titles still go for $5-50.

Software as a service may be where we need to head, to trick users into paying full retail for software in low monthly installments, but even that's an issue where $7/seat/year for mission critical communications software is considered "expensive." (As the Wired article on Slack from another thread claimed.)
posted by Slap*Happy at 8:30 AM on August 12, 2014


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