Making money by building apps is becoming difficult

Apps ecosystem health is arguably the most essential piece for mobile platform to be successful and grow. Without installable apps that add value, mobile operating system is just an isolated island from the rest of the information world.

Developers are the key contributors to the ecosystems, many are true enthusiastic altruists, but most aspire to make profit and run a business. If such aspirations are difficult to attain, naturally I would expect number of developers writing apps for the platform to decrease.

I have written before about lack of developers financial successon Android platform and slightly higher earners from Amazon app store. iOS developers comparably make more money from selling their apps as iOS customer is more affluent and more likely to spend money on an app purchase. Naturally this draws developers to develop on the iOS which has led to more that 600k apps but Google Play (formerly Android Market) has almost as many apps.

App developers expectations are high, however, many are disappointed according to a recent apppromo survey: 

·         59% of apps do not generate enough revenue to break even on dev costs

·         80% don’t make enough revenue to sustain a business <<NetNewsWire dev Brent Simmons suspects the figure is "more like 85 percent," while Lucius Kwok believes it may "fall in the range of 90 percent or higher.">>

·         12% earn $50k or more

I interpret those numbers as there are too many apps for new entrants to have success and standout from the incumbent, discoverability continues to be a problem. Revenue distribution among the developers is uneven. Marketing budget for new entrants are small. Several are making astronomical proceeds from the app sales, but 4/5 cannot sustain a business.