back to article Getting rich off iPhone apps is b*llocks, say UK devs

Almost no apps cover their development costs and software services only make money in "extremely unusual" cases, some proper engineers have told MPs. A panel of engineers and boffins drawn from the Institution of Engineering and Technology and the Council of Professors and Heads of Computing poured cold water on the idea of …

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  1. Anonymous Coward
    Anonymous Coward

    Some of these people should have done maths and not engineering

    I mean, how many sales at 99p do you have to make to pay for 5 developers on 30k pa...

    And I'll let you off the slightly harder sum of adding in other business expenses and Apple's cut.

    Don't moan about your shit poor business skills in identifying the size of the market for your software before you start writing it...

    1. Michael H.F. Wilkinson

      Re: Some of these people should have done maths and not engineering

      Was it not exactly the point of the professors and engineers that you have to sell a lot of apps just to break even?

      Furthermore, what they appear to be saying is that you need a lot of investment, and that the idea of getting rich quickly from an app slapped together in a few weeks/days of coding is a pipe dream. That seems to make sense.

      1. Anonymous Coward
        Anonymous Coward

        Re: Some of these people should have done maths and not engineering

        Yes, but thats like saying "I've had a really clever idea - the sun is a large energy emitting source".

        Its completely damned obvious.

        The only people "making money" are those who actually aren't counting costs in the first place - ie someone writing something in their evenings or whilst sat at their desk being paid to do something else ;-)

        1. Michael H.F. Wilkinson
          Happy

          Re: Some of these people should have done maths and not engineering

          "Yes, but thats like saying "I've had a really clever idea - the sun is a large energy emitting source".

          Its completely damned obvious.

          The only people "making money" are those who actually aren't counting costs in the first place - ie someone writing something in their evenings or whilst sat at their desk being paid to do something else ;-)"

          Agreed, it is obvious, but politicians need people to point out obvious things to them. Frequently.

          And of course the pointing out the bleeding obvious must be done by qualified people like professors and engineers, or else the politicians might look silly.

      2. Chris 3

        Re: Some of these people should have done maths and not engineering

        I think OP's point is: Don't sell at 99p if you can't make a profit at 99p. For what it's worth most of the apps I have on my iPad cost rather more than that, because I'm willing to pay for good apps.

        1. Anonymous Coward
          Anonymous Coward

          Re: Some of these people should have done maths and not engineering

          Exactly, if its 99p, its rubbish and there is probably some free app there that does the job with ads, but if you want good games/apps, pay £3--£4 for it...

    2. Anonymous Coward
      Anonymous Coward

      Re: Some of these people should have done maths and not engineering

      5 devs @ 30k = 150k.

      Plus ancillary costs (tax, benefits, pension, legal) so say 200k.

      Add a bit more for kit, rent, marketing etc, so say a cool 300k to be safe.

      Selling an app at 99p of which they get 66p.

      300k/0.66 ~= 455,000 sales to break-even (assuming you can go from nothing to fully tested and commerce ready version in a year).

      That is, frankly, rather a lot and at that level a small team might find the free or open model more beneficial. Would all depend on what they are developing.

      1. Anonymous Coward
        Anonymous Coward

        Uneven distribution

        One company will make a fortune and the others none. Then the one which does best will introduce a free ad-supported version and the others will have to be free as well.

        Most people will just buy the best-reviewed.

      2. Goldmember

        @AC Re: Some of these people should have done maths and not engineering

        Actually the costs of 5 devs will be higher - you're forgetting employers' contributions and NI, which will equate to almost an entire annual wage again for each person. BUT, it's unlikely that you'll have 5 full-time devs working on a single mobile app over the course of a year.

        A member of my fanily works as a full time games developer, and has spent 6 months developing a game almost single handedly, with smaller amounts of input from other devs and designers, who are also working on other projects. He has also had smaller amounts of input into other projects.

        The success of mobile development is unpredictable, and is about balance. A big, resource intensive game or app can flop massively, and a fairly quick, simple app developed at home can become a roaring success (although that is becoming less likely as the market continues to saturate).

      3. Eddie Edwards
        WTF?

        Re: Some of these people should have done maths and not engineering

        This thread is retarded. It doesn't take 5 developers to develop an iPhone app, nor does it take a year. You can do most games with a programmer and an artist in 3 months, and some can be done with a programmer and a few OTS art resources in a few weeks. Around £60K PA including costs, or £15K for the whole thing. £15K / 66p = 23,000 sales to break even. The 1-month project costs more like £5K, so 7,500 sales to break even. This is assuming up-front cost pricing model, which no one is using any more, since you can get 100,000 downloads of a free app and monetize that to £15K a lot easier than you can get to £15K on upfront purchases.

        Current app in development: art budget £5K, programmer budget £2K. So you can go even lower than the above figures if you think hard about it.

        People are typically making a few hundred quid per month per title; over the lifetime of a title (say 2 years) that's going to get you within the right ballpark. One in ten titles will do 10x better, though, and once you get one of those you're in profit overall. Other titles do 100x to 10,000x better, which is the obvious attraction of iPhone development. There is a power law at work; about 1/N of titles will make Nx the typical figure.

        The idea that iPhone software development isn't a viable business is obvious bullshit given the size of the industry. It's a marginally profitable enterprise with the possibility of huge returns if you strike the right note in just the right way.

        1. TheOtherHobbes

          Re: Some of these people should have done maths and not engineering

          Indeed. 5 programmers for a year? LOLWUT?

          If your app takes one coder more than three months, you either need a better coder or you need to stop wasting your time trying to make an uber-complex master app. (There are occasional exceptions to this. But not many.)

          "The idea that iPhone software development isn't a viable business is obvious bullshit given the size of the industry."

          There are a lot of part-time hobby apps cluttering up the store -> bad news for the professionals. And arguably the market has peaked now that world+dog already have their own apps. So headcount on its own isn't proof of anything, except a bubble/bandwagon/gold rush.

          But there's still a lot happening in the US. And there will be future changes in iOS 6, 7, 8... which may possibly do Cool New Stuff, and will need updates and/or innovation.

      4. SpaMster
        Thumb Down

        Re: Some of these people should have done maths and not engineering

        I'd like to think 5 app developers would be able to come up with more than one idea a year, if this is all thats expected from them i'm in the wrong job

    3. Anonymous Coward
      Anonymous Coward

      Re: Some of these people should have done maths and not engineering

      Sadly I do agree. Can all businesses argue that "our expenses are too high, give us more money!". I'm currently looking to make gold plated loo roll. Then I'll complain when I cannot recoup my investment.

      1. Bill Fresher

        Re: Some of these people should have done maths and not engineering

        "I'm currently looking to make gold plated loo roll"

        I'll buy 3 nine packs.

        Cheers.

    4. jonathanb Silver badge

      Re: Some of these people should have done maths and not engineering

      Somewhere north of 250,000. Ideally it should be in the millions once you consider other costs.

      1. Ted Treen
        Devil

        Re: Some of these people should have done maths and not engineering

        And everyone is just accepting the cost of 5 coders, at £30k pa each. So the biggest overhead is £150k in pay.

        Are you seriously asking me to believe that some of the £0.69p apps I have (and enjoy) took five man years of development?

        Were they ALL products of Redmond?

        1. Anonymous Coward
          Anonymous Coward

          Re: Are you seriously asking me to believe

          One app at five man years, or 250 apps at a man week each, the total sales requirement remains the same.

  2. Thomas 4

    Awww...

    So you mean our Silicon Roundabout really *can't* compete with Google, Apple, Microsoft and Facebook?

    Awwww. ='(

  3. Giles Jones Gold badge

    There are few tools worth paying money for and so many free alternatives. It's only really games that make money. Nothing changes :)

  4. JDX Gold badge

    I always wondered about 99p apps

    I mean I appreciate you are aiming for mass-market, but the PC had casual games before mobile took off and they didn't sell for a quid, more like 10 times this.

    That's why I'm aiming my iPad apps at the specialist commercial side, £10-100.

    1. Anonymous Coward
      Anonymous Coward

      Lower uptake...

      Everyone commutes to work. Angry Birds gives someone who commutes by bus/train something to do in that time which previously didn't exist as computer program using-time for most people who travel in on public transport. If you use any laptop bigger than an 11" macbook air on the tube at rush hour you deserve an ASBO, frankly. Mass market smartphones? Now you're talking.

  5. Anonymous Coward
    Anonymous Coward

    Facebook

    I'd hesitate to include Facebook in that list of successful commercialisations. "Pyramid scheme" would be a more fitting description.

    Does anyone have any clue how much money was actually chucked at Google in the early days? And of course not all of its creditors would have expected any return (well, in the monetary sense anyway).

    1. NomNomNom

      Re: Facebook

      Backed by the CIA isn't it?

    2. Anonymous Coward
      Anonymous Coward

      That's the point

      We don't have a good venture capital network the way the yanks do. And most start-ups do fail. So if what they're saying is we need people and funds who can chuck money at start-ups and a tradition of creating these companies.

      But yes, there's a dividing line between shops with an online presence (conventional businesses who would like better internet/mobile presence) and pure tech companies like Google created from a PhD thesis. The latter need more support but can do something much more special.

      Incidentally, we have one big advantage here over the USA: free healthcare. The most serious risk to would-be start-up creators in the USA doesn't exist here.

      1. Anonymous Coward
        Anonymous Coward

        Re: That's the point

        not true - there are loads of venture capitalists in the UK.

        http://www.bvca.co.uk/About-BVCA/features/OurMission

        Do your homework.

        1. Anonymous Coward
          Anonymous Coward

          Not disputing this

          But it's not on a US scale. The next Facebook will be built in California not Shoreditch. And that's the problem.

          And we should be beating the USA. We speak English, are an hour's flight from Europe and there are lots of translators in London. So expanding into lots of different countries should be easier than US companies find it. The UK has ties to India that the USA just doesn't, for instance.

          1. Anonymous Coward
            Anonymous Coward

            Re: Not disputing this

            That's funny, as I was reading how silicon valley has less influence that it once did as areas like London gain expertise, or so said Wired, and how the savvy business taps into the experience from the various tech hotspots that now exist.

            You can't blame London for not being inviting, ultimately your strategy is flawed in some way. Hiring 5 devs to develop an app that isn't going to make any money, for a start the at London rates you are only getting a mid level dev at best. As the Joker says, "if you're good at something, never do it for free"... and the same applies for doing it really cheaply :P

            I've long wanted to get into some app development, but realised early along that games make most of the money... if you want an app to be used, it needs to be free, for at very least the base version... it needs to be of very high quality, and it bloody well better integrate into something that makes money.... unless your long term business plan is "be bought out by someone"

      2. Anonymous Coward
        Anonymous Coward

        Re: That's the point

        What about the MoshiMonsters franchise, surely that proves we can come up with a something akin to Facebook? MM is UK based but the owners were not just content to limit themselves to an online game for kids. Kids being kids the owners knew that kids have pester-power, just market the online game via physical toys, games and other merchandise tat.

  6. DJV Silver badge
    Alert

    Proper engineers?

    Who the hell let proper people talk to MPs? It's just not on! I mean to say, isn't listening to sound-bite merchants the usual way MPs get their information? If this goes on there's the danger the MPs might actually come to a sensible decision for a change!

    </sarcasm>

    1. Colin Millar
      Pirate

      Re: Proper engineers?

      Don't worry about it - half of the committee would be asleep and the other half too busy twitting what they had for lunch to actually listen to anyone. As any fule kno - to an MP the only voice worth listening to is their own.

    2. icanonlyimagine
      Facepalm

      Re: Proper engineers?

      Colour me skeptical. So, you get invited to submit proposals to a govt committee concerning future industry growth...and your first request is...yep...'Give us some money'. To make it look better, write off initial gains to make the equation look financially untenable whilst bigging-up potential riches if funding is made available.

      The Treasury gets this stuff every week and will laugh them off the agenda.

      Surprised El Reg didn't get in a dig about Apple's outrageous 30% cut <sarcasm>

  7. JeevesMkII
    Holmes

    Silly Rabbits

    Don't they know the real money is in taking 10 million in VC money to build sharemyvideoofwhatimeatingfordinner dot com then flipping it to facebook for 1 billion before you've even made so much as a penny in revenue. This is the new new economy.

  8. Anonymous Coward
    Anonymous Coward

    1 finger typing etonians know best

    bury this report and in a few weeks the bozo's in government will start telling us how an army of school leavers will save the economy by writing and selling apps.

    1. Anonymous Coward
      Anonymous Coward

      Re: 1 finger typing etonians know best

      :)

      Bozo's in government that have cut commitment to computer science and software engineering.

      its a shame government doesn't follow the model view controller patter so we could just swap out the crap logic they apply - without them nailing every service to the floor.

  9. Chris Sake

    Need more emoticons,

    apparently.

    Well, at least according to Chad: http://www.fourhourworkweek.com/blog/2012/04/22/how-to-build-an-app-empire-can-you-create-the-next-instagram/

    This is real proselyting language:

    Appreneurs earn money while creating lifestyles of great freedom. Two of my appreneur friends spend several months of the year doing nonprofit work in Vietnam, while their businesses are generating seven-figure incomes.

    Interesting that he promotes blatant copying:

    To make the design process easier, I look at certain apps in the App Store and reference them to show my programmers what I’m looking for. For example, I’ll say, “Download the XYZ app. I want the ABC functionality to work like theirs. Take a look at the screenshots from this other app, and change this.” I take certain components of apps that I’d like to emulate, and give them to the programmer so that we are as clear as possible.

    I agree with JDX; far better to sell to the business market. 99c 'apps' work for Apple in the same way that arbitrage works for banks, but not for an individual investor / developer.

    1. TeeCee Gold badge
      WTF?

      Re: Need more emoticons,

      "Interesting that he promotes blatant copying:"

      Hardly surprising, that whole thing's obviously a blatant rehash of the joke "Bong!" columns around here.....

    2. Anonymous Coward
      Anonymous Coward

      Re: Need more emoticons,

      "Interesting that he promotes blatant copying"

      To all right thinking people, maybe. To companies like Zynga this is known as a 'Fast Follow'.

    3. Graeme Sutherland
      FAIL

      Re: Need more emoticons,

      Chad's selling a book on how to make your fortune as an appreneur, which is a portmanteau word that's like entrepreneur, only better.

      As far as I can tell, it involves coming up with an idea for an app, getting a third world coder to build it on the cheap, and then living a life of leisure whilst the money rolls in. I'm not convinced it's that easy, nor do I believe that he's as successful as he claims. Both he (and Ferris, whose blog it's posted to) strike me as snake oil salesmen.

  10. Ben Norris
    Thumb Down

    This is why the goverment have Martha Lame Fox as UK Digital Champion, founder of lastminute.com - A company which soaked up millions of investment while consistancy making huge loses and yet mysteriously is hailed as the pinnacle of British internet business.

    1. Anonymous Coward
      Anonymous Coward

      Be very worried..

      It did not consistently make losses for Ms Fox though, I'm damn sure she made a very tidy sum out of it (£13 million apparently) and that's the difference.

      Sell the sizzle, the sausage can be truly hideous (if it ever even exists.)

  11. Anonymous Coward
    Anonymous Coward

    Academic funding

    is, surely, what this is about.

  12. Anonymous Coward
    Anonymous Coward

    So I'm not quite as mad as I thought!

    I always pictured iPhone developers sat in Starbusks on a £3k laptop with a copy of emacs writing hilarious fart apps to show their friends whilst emailing their parents to send them more money.

    Waiting to see how Microsoft's bandwagon app model differs...

    http://news.cnet.com/8301-1023_3-57416115-93/microsofts-windows-store-goes-global-with-33-more-countries/

    Market entry barriers. Have they really been such a problem for devs?

    1. Anonymous Coward
      Anonymous Coward

      Re: So I'm not quite as mad as I thought!

      Microsoft are at the other end of the spectrum, they are paying devs to port games to windows mobile. If you play your cards right MS might actually fund you enough to get the game on to three platforms!

  13. Bod

    Stating the bleeding obvious

    So how much of taxpayers money was spent on finding out what most professionals knew ages ago?

    Apps by themselves don't make money.

    A free app that drives sales and services, even indirectly, is another matter.

    The other area that makes money is to have a great idea and product that currently makes no money but someone is foolish enough to buy your company for a lot of money. Hmm, Instagram ;). Or really in the Instagram model, the key is to have value in a vast database of users, images and their associated GPS locations.

    Ideas, patents and information. That's the money.

    1. Anonymous Coward
      Anonymous Coward

      But that's the problem...

      "Apps by themselves don't make money.

      A free app that drives sales and services, even indirectly, is another matter."

      The government's aim is to make money flow round the UK economy: I give it to you and you give it back to me. That way everyone feels a lot richer than if there's the same amount of money and the haves keep it in their bank accounts (weird but true).

      Most small businesses (I'm thinking 2-4 shop chain) would have no idea how to make an iPhone/Android app to allow customer ordering and order tracking. Still less how to make customers trust it. And yet they might do well to get one. And shopify will make one for you quite easily. For a lot of this the tech is out there, people just need to be pointed to it.

      Look, think of this example. Small business run by 55-yo technophobe decides on to build an app/website for itself which is a customisation of previous apps. It hires a graphic designer to spend two days creating a good icon for it, a photographer to take some product photos and a programmer (maybe one who doesn't need much experience) to customise and tune up a pre-created shop framework or price quote system to match their requirements. Customers can more easily find out what the shop's selling and are more likely to place an order. Everyone's happy.

  14. Winkypop Silver badge
    Coat

    App development how-to

    Is there an App for that?

  15. Anonymous Coward
    Anonymous Coward

    Geniune question

    how many of you negative people have experience of publishing an app on the app store?

    also, what about knocking out an app every two weeks until one of them 'out of the blue' generates a lot of sales then keep polishing that one to keep boosting sales? - or maybe I dont know what I'm taking about and you're all experts in the field :-)

    1. Anonymous Coward
      Headmaster

      Re: Geniune question

      Interestingly, I do wonder where people would go if looking for an app programmer. Specifically Android, but possibly iOS...

      1. Ye Gads

        Re: Geniune question

        LinkedIn, for one. I see several a week, and that's just for Windows Phone, I'm sure the Android and IOS groups have much more activity.

  16. genericallyloud
    Holmes

    Because selling non-app software has been really successful lately?

    Other than games, operating systems, and a handful of the top "essential" applications (microsoft office), what consumers were really paying a lot of money for applications *before* the app store? Wasn't that what the whole SaaS thing was about? Consumers don't pay for software, and its too easy to pirate, so charge for the service and have a free basic plan to bring them in and get them hooked.

    Apple did their job getting people to actually pay for software again. And in the beginning, yeah, you had some get rich quick fart apps. That's not the case anymore. Competition is stiff, and you have to be smart about your options. You have to be realistic about the costs and the uptake. There is successful software selling for $100 in niche areas, and there is plenty of software that cost $10 that I gladly purchase because it is worth it to me, and it isn't riddled with ads or in-app purchases. Finally, there is always the fallback SaaS style model. The app is free, but the account might cost money. There are a lot of options - you can't just pretend like Apple is handing out free money. Let's look at the history and remember what happened in the original gold rush.

    1. Anonymous Coward
      Anonymous Coward

      Yes

      The app store actually does help consumers. One-stop shop, customer reviews, all companies have the same website frame so they're on equal turf, and soon for macs push updates for purchased products linked to the operating system updates. All good for novice users (most of the market).

      And of course this is Canonical's schtick: free software, expensive IT consultancy. Doesn't work so well for things like DTP software.

  17. Alister

    Investment capital

    I rather think the main point being made here, is don't expect internet services to be a get-rich-quick scheme on which to base the country's economy. It seems that someone in the present government, or civil service, has Had A Thought, and decided we can become great again by writing lots of Apps.

    Unfortunately, Britain / UK has always been famously bad at providing long-term investment capital for new ideas, hence the loss of so many engineering and other skills. I think it's true to say we could have been world leaders in a number of manufacturing or engineering niches, not least of which being computer hardware and software, had real venture capital been available.

    1. Anonymous Coward
      Anonymous Coward

      Agreed

      This is the problem. And state funding may not help, though tax breaks might.

      But I'm not sure this is the right place to start a UK economic boom: we speak English, but the equipment to do software development is cheap and you can do small-scale development or pilot studies in the evenings while working on another job: we're competing with the whole world. I think they should look at biotech: paradoxically, because start-up costs are higher and equipment more pricey, you're not competing with other countries to the same extent. And UK universities have very good bioscience departments at the moment, though government cuts are about to put a stop to that one.

  18. karlp
    Facepalm

    99p/c/etc?

    I am assuming, potentially incorrectly, that the engineers in question are building something much more compelling than a fart app.

    If so, 99p/c/etc is a terrible price point.

    The only people playing down at that cesspool are doing so willingly.

    While I must admit to having a few of these apps on my devices, in general terms the median cost of an app on my iDevice is probably approaching 8$ at this point.

    The story here isn't people can't make money, its that people are failing business planning 101.

  19. Anonymous Coward
    Anonymous Coward

    needs to be en mass or much more expensive

    The problem is the margins lost to the channel.

    69p - is seen as impulse purchase - and some publishers will push for this for a first release. The publishers then do 3/5ths of nothing other than get you through the app store process and may spam social media.

    The numbers then break down like this :-

    -30% to apple = 20.7p

    -35% to a publisher = 24.15p

    -35% to the devs = 24.15p

    = need to sell shed loads (circa 125000) to pay a dev £30k.

    So you have to go down the in game purchase route or keep churning out games but either way unless you are developer/publisher its pretty diminishing returns as the devs get a small piece of the pie. Out of which you may need to pay artists / musicians etc.

    1. Anonymous Coward
      Anonymous Coward

      Re: needs to be en mass or much more expensive

      People get publishers for apps, when they can do it for themselves for free?

      If that's the case, they sort of deserve to lose 50% of their share for stupidity.

  20. Anonymous Coward
    Anonymous Coward

    Bollocks.

    If you asked e'm, I bet they'd say the Wheel is Economically Unviable.

  21. Anonymous Coward
    Anonymous Coward

    Ah, the wisdom of MP's

    I'm sorry but, MP's adivsing on software - lol!

    Is this the MP's that were setting econonmic policy but didnt actually know what they were doing and ended up driving the economy into the ground whilst their snouts were at the trough - Europe wide!

    If they can't understand numbers in banking - then how did they suddenly understand when they are being advised by Software Engineers?

    Dont believe a word of it.

    MP's are only good at being corrupt, taking back handers and getting as much money for themselves.

  22. Jon Press

    It's true for most "creative" endeavour

    Write books, write music, paint pictures and you're very unlikely ever to make a living. It's possible, granted, but only for a small minority. And where money is made from the creative process, it typically goes to the record company, the movie studio and the various intermediaries rather than to the original creator.

    Writing apps isn't a business in the same way that writing books isn't a business: publishers, literary agents, printers and bookshops are businesses (for the duration of their business model), authors are just their raw material.

    It's also stretching the meaning of "research" beyond its elastic limit to suggest that the average App, to the extent is is at all commercial, is the result of some profound academic insight.

    1. Anonymous Coward
      Anonymous Coward

      Re: It's true for most "creative" endeavour

      Weirdly, this whole conversation reminds me of acting. Sure, there are a few superstars, but most people who do it never make any decent money at it and they generally produce respectable but not incandescent work. But then some fool in a position of power looks at Brad Pitt's bank account and thinks, "Gee, wouldn't it be great if everyone made that much money? Think of the tax revenue!"

      You know who benefits financially in these moments? Schools that teach the subject in demand. Perhaps the real plan for financial recovery is to get people paying for yet more schooling.

  23. Anonymous Coward
    Anonymous Coward

    Tell it likeit really is...

    ... Microsurfs

  24. Anonymous Coward
    Anonymous Coward

    Apple responciple for non-commercialisation of UK research?

    There were fifteen previous references before that one, all having an equal if not higher impact on the commercialisation of software development.

    --

    "What are the difficulties of funding the commercialisation of research, and how can they be overcome?

    ..` Generic problems, competent personnel, financial resources, departmental taxes, differing government priorities, non-disclosure agreements, low early-stage funding, pure research, academics are not business orientated, rights to exploit research' ..<br><br>

    "commercial exploitation of computing research isn't just packaging a product"

  25. Anonymous Coward
    Anonymous Coward

    Too many people get the basics wrong...

    I've been doing app dev since the app store started, and now "have it right" I think (working alone, and earning ~£2-5k/week). My main app sells for 99c, and I have tons of competition - but I'm targeting a big enough market and building good enough apps that the sales numbers support it.

    What I see all the time though is start-ups with a really good idea and talented coders and designers spending months building a really great profit that a handful of people will buy, and will only sell for 99c because of the competition they're up against.

    Classic example: There was a 'thermometer' app. It got the temperature from local weather reports, and displayed it with beautiful graphics. Must have taken absolutely tons of time to make (mostly design though). How many people will buy a thermometer app? And is it worth more than 99c (if that)? It's obviously going to earn maybe a few hundred dollars in sales. Which will pay for the designer to do maybe 10% of the work.

    That is unfortunately pretty typical. Dream up a seriously flawed business plan, get a small team together, get somebody to fund it (or worse, the team gives up their day jobs and invest their savings), 6 months later it all ends in tears and repossessions.

    Some people get it right though, targeting a decent sized market that will spend money, and making an app that can stand out from the crowd. Then the income is definitely there - and it can be pretty spectacular.

    1. Anonymous Coward
      Anonymous Coward

      Agreed

      Bang 'em out until you hit on the right one, then polish. Thats the formula I think.

    2. kwhitefoot

      Re: Too many people get the basics wrong...

      I'm curious. You wrote a well reasoned piece that sounds very plausible and appears to be written from experience. You are also in a business where effective advertising can make the difference between selling your product and not selling it yet you tell us neither your own name nor that of your 'main app'. Why?

  26. Anonymous Coward
    Anonymous Coward

    A panel of engineers and boffins ...

    I'm picturing a bunch of beardy old geezers in tweed jackets - not the community you'd expect the next Instagram or Angry Birds to originate from.

    Listen chaps, you can't extrapolate from the failure of your own social network app for sharing the numbers of Deltic locomotives extant on Britain's heritage railways.

    1. Mike Tyler

      Re: A panel of engineers and boffins ...

      >>network app for sharing the numbers of Deltic locomotives extant on Britain's heritage railways.

      Bugger another idea bites the dust

    2. Mike Flex
      Thumb Up

      Re: A panel of engineers and boffins ...

      > the failure of your own social network app for sharing the numbers of Deltic locomotives extant on Britain's heritage railways.

      An app? You just need to ask on uk.railway.

  27. NomNomNom

    If the government is so sure that apps will make enough profit to be relevant to the economy then why don't they provide the funding?

    Perhaps they could get an app developed which monitors the temperature of pasties. Another app could calculate how much tax you can avoid through charitable giving.

  28. Anonymous Coward
    Anonymous Coward

    No money in apps? No sh*t Sherlock.

    Sorry, I agree with the original heavily criticised AC here. This isn't valid academic research - it's the bleeding obvious, and everyone saw it coming about ten years ago when the places for developers to get ripped off were Handango, Jamster etc.

    Economics of independent publishing 101 :- distribution, distribution, distribution. It doesn't matter how good or bad your product is, it matters how many people get to see it. The App Store model has put control of distribution completely in the hands of the corporates. You now have as much chance of getting rich (or of breaking even) as a developer as you would in the music business.

    1. Anonymous Coward
      Anonymous Coward

      Re: No money in apps? No sh*t Sherlock.

      so why has a little old pleb like me made money then?

      1. Anonymous Coward
        Anonymous Coward

        Re: No money in apps? No sh*t Sherlock.

        No idea. Why don't you tell us?

        1. Anonymous Coward
          Anonymous Coward

          Re: No money in apps? No sh*t Sherlock.

          By knocking out apps until I hit on one that seems to have stuck. Damn hard!!!, but it worked. But you knew that method anyway - seeing as "You saw this coming TEN YEARS AGO!" LOL!

          1. Anonymous Coward
            Anonymous Coward

            Re: No money in apps? No sh*t Sherlock.

            You saw this coming TEN YEARS AGO!" LOL!

            I didn't say that. You've got the wrong AC. Congratulations I'm sure but I don't think the scatter gun approach will work for me although I suppose if my first app isn't a success I'll have to keep writing others until one does finally start to make money so I might end up doing something similar anyway.

          2. Anonymous Coward
            Anonymous Coward

            Re: No money in apps? No sh*t Sherlock.

            > By knocking out apps until I hit on one that seems to have stuck. Damn hard!!!, but it worked. But you knew that method anyway - seeing as "You saw this coming TEN YEARS AGO!" LOL!

            Jolly good, and what are you going to spend the money on? Drugs, hookers or cars? Immature t1t. Oh yeah, tell us the names of your apps and where we can buy them. But you can't.

            1. Steve Ives

              Re: No money in apps? No sh*t Sherlock.

              "Jolly good, and what are you going to spend the money on? Drugs, hookers or cars? Immature t1t" - no - if he was immature, he wouldn't spend the money on those things, he'd just waste it.

              Steve

  29. Anonymous Coward
    Anonymous Coward

    As a software developer myself, I am hoping to finish an app soon that I hope will make me a fair bit of cash. There is a substantial potential user base for this application and I expect to produce a free version with ads and a paid version with more features. This seems to be a fairly successful model on the app store used by a lot of apps I've regularly seen featured. Perhaps I'll make enough cash to go off and pay some more developers/designers, etc., to produce enough ads but I'll be happy to make enough to provide a reasonable living for myself on a par with, say, contracting.

    Anyone without the ability to roll a lot of the code themselves embarking on a plan to get rich by hiring developers is nuts. You might make a go of it using cheap Indians, Chinese, Eastern European developers but you'd have to have really good control over the costs and enough cash to keep yourself going before making money. Not really viable for the average Joe.

    I think it might've helped if the previous government hadn't been determined to give away our entire IT industry to the Indians. Now there are fewer and fewer kids going into IT, which is no bad thing as far as I can see as the wages are low and the work pretty mundane on average. Apart from an elite few, the days of loadsamoney in IT are long gone. If this government thinks that we're going to suddenly start companies to rival Apple, Google, etc., I think I can categorically state without fear of contradiction that they're on a hiding to nothing unless they get tough on ICTs,etc., nicking our jobs and turning IT into a form of high tech burger flippery.

  30. Anonymous Coward
    Holmes

    Follow the crowd

    I reckon there are plenty of opportunities out there for app developers. The problem seems to be that most developers are more inclined to copy something that already exists, rather than spend the time and effort required to fill obvious gaps in the market. I'll give just two examples from my own unsuccessful app hunting:

    1: Mobile version of Open Office.

    There are eleventy billion apps in the App Store which claim to be mobile office suites of one description or another. Nearly all can read/write Microsoft Word format, one or two can 'read-only' Open Office formats. But there are none which can read/write Open Office. Neo Office have an iOS App, but rather than provide anything useful like the ability to work with Neo Office documents on the go, it's a front end for their pointless "look we've got a cloud too!" online storage offering.

    Similarly, Libre Office have adopted the Duke Nuke'm Forever approach of telling world and dog for months now that they're planning Android and iOS versions of Libre Office, while delivering absolutely nothing.

    So, there's one obvious gap in the market for an app suite that would be guaranteed to sell and at a profitable price, but don't hold your breath. It's much easier for wannabe developers to leverage iOS's in-built support for .doc format and slap together another "me too" Microsoft Office compatible suite this month, than to spend maybe half a year building something innovative like a mobile Open Office suite.

    2: Printing

    Similar story here. Search the App Store for something that will allow you to print from your iPad and you'll find an equally huge number of printing apps that will supposedly let you "print to any printer" over wifi. Read a bit deeper tho' and you'll find that most of these apps either; A –actually print via a helper app on your desktop computer, or B –somehow operate on top of the free iOS picture printing plugins most manufacturers have released and channel print jobs through those, as images.

    [There is a third category; printing apps by a company called EuroSmartz, which seem to have as many different printing apps as the rest of the market put together, with a confusingly mobile phone tariff like matrix of 'features', but that's another story!]

    Again, an obvious gap in the market there. Who's going to be the first to bring something like a mobile wrapper around CUPS to market, which genuinely allows the user to add printers to their iOS device as easily as they can to their desktop? Ironically, there's an app called TruPrint for jailbroken iOS which does exactly this. But no-one seems to have managed to pull it off through 'official channels'.

  31. Christian Berger

    Missing the point

    The way to be profitable is not to actually sell your app, that's pointless you cannot get money that way, but to appear important enough so someone will buy you for a billion or trillion or whatever number they come up with. Then you sell a small part of the stock (those people rarely will pay you in cash) so the bubble won't burst, and _that's_ your profit. Maybe you manage to slowly sell your worthless stock to some morons without causing suspicion, more profit for you.

    The app business is probably where the Multimedia CD-Rom business would have went if it wasn't for the Internet. Once mobile Internet connections are fast, there's little need for having local apps, most of which need Internet connectivity anyhow.

  32. Dare to Think
    IT Angle

    what shall I read out of this?

    Does this report basically say that thousands of young, enthusiastic developers have wasted their time developing apps that are mostly junk, are in the end left with dept and with the ever increasing capabilities of the phone browsers many apps are or will soon be obsolete as we will be using the same web pages as on our PCs?

    In other words, the real innovation is still the phone hardware, the 000s of apps around it is mostly huff and puff, and only comparatively few are of real value?

    Is that it then - in the long run we're better off developing tunnel driving, photovoltaic, gear mechanism technology, and the like?

    1. Christian Berger

      Re: what shall I read out of this?

      Actually, when young enthusiastic developers are developing mosty junk apps that's actually good. Back in the 1990s, young enthusiastic developers were developing code still in use today, like the Acrobat Reader or the Flash plugin. Apps are just a playground you can grow on. Nobody cares if Apps don't work nobody will have to use such apps in 10 years.

      Again, that's actually a good thing. Nobody starts as a great software developer, everybody needs to fail first. And failing on Apps is a great way of failing without anybody getting hurt.

      Other than that, I see most development wasted by the fact that phones are so needlessly different. I mean look at PCs, it doesn't matter if you have a Dell or a HP or whatever, you can simply install any OS you like onto it. And the OS will be able to easily enumerate what kind of hardware the computer has. Arm is lacking that currently. There is no way of installing a Linux onto a new Arm box without extensively porting it. And once support for your new platform runs out, you're screwed. So every mobile phone manufacturer needs to re-port Android or whatever to their platform. Granted, this is a big step forward over having to write their own systems, but it's still bad. That's where the waste in the mobile industry lies.

  33. theloon
    FAIL

    Socialist Engineers ask tax payers handout for loss making apps

    How about a lottery grant? Or what about we raise the basic rate of tax to pay for some developers to wack off designing software no one actually wants....

    Hang on, is that not already funded and done by our tax pounds?!!

    It's called Government IT....

    Enough of our money spashed up the wall already

    Epic Fail!

  34. Steve Ives
    Paris Hilton

    Have the MP's taken into account...

    that all the devs, writing the apps to boost the economy, will be in India?

    Steve

  35. Alan Bourke
    Stop

    Apps are the new word processing.

    I know of people, recently made redundant and with no history whatsoever in IT or software development going on government courses to learn how to write apps because all they read about is 21-year olds writing some game or other and becoming millionaires. And they're little dinky things that go on phones, not big scary things that go on computers! How hard can it be!

    There's an ever-increasing noise-to-signal ratio in app development for any platform. The get-rich-quick bandwagon has passed.

    1. Death_Ninja
      Flame

      Re: Apps are the new word processing.

      Get rich quick in programming? Wasn't that back in the 80's when that Monty Mole kid or the Codemasters twins were photographed with shiny new sports cars?

      Didn't millions try it on back then too to join this mega rich elite... I suppose the only difference now is that you are self publishing not trying to find/startup a publishing company yourself.

      Seem to remember none of my friends who tried it ever earnt a Porsche...not even a Austin Allegro.

      Funnily enough, the people who retrospectively made the money were the publishers, not the programmers/artists - or if they did, it was because they became publishers and stopped writing code.

      Whilst we like to praise coders as the elite geeks, if you look at any large company heirachy they are pretty much near the bottom of the pile - the big bucks are earnt in business skills - sales, marketing and finance. Always was, always will be.

  36. Anonymous Coward
    Anonymous Coward

    £30k software engineers?

    ...I'll take ten. £30k is peanuts; software engineering is harder than most jobs.

    Apps are the shareware of the noughties, albeit with slicker search and payment systems. What's not to like? Back when shareware was "big", people were still paying proper money for proper software that solves real problems, and they still will.

    Find something that people have a genuine need for, that doesn't exist in the right form or at the right price.at the moment. Build a proper service around it. Profit.

    It's hardly surprising that it's difficult to compete with companies that have essentially limitless piles of cash (e.g. Facebook). The solution is not to chuck limitless piles of public cash at startups in the hope that something sticks.

  37. Crisp

    MP's

    Not sure if serious or trolling.

  38. Alan Denman

    Android for any new devloper?

    Obviously the sensible thing to do is always to develop and test market any app on Android before throwing your money away on Apple developer fees.

    Small developers will get squeezed even more in future so don;t take this as gospel.

    1. Anonymous Coward
      Anonymous Coward

      Re: Android for any new devloper?

      I'd argue its the other way around.

      Android owners expect their apps to be free and paid apps get far less sales.

      iPhone owners seem to accept that apps can be paid for (although the model is shifting to In-App Purchases) and so great larger sales like for like.

      So dev on iPhone first to stand a better chance of making money and if it works on iOS, then implement on Android.

      Also, on a coders wage, the $99 isnt too much to pay for an ios dev licence.

  39. Trollslayer

    Good

    to see that the government is trying to get solid information in order to decide where to go.

    Now maybe those taking cheap shots can make constructive contributions.

  40. Rob Davis
    WTF?

    Difference between getting rich and earning a respectable amount with correct app pricing

    I'm wondering if the article and posters here have confused the article with getting rich and making a decent amount of cash.

    It seems unnecessary black and white to me: the incorrect inference seems to be: "if you can't get rich doing it then why bother at all?" when actually there are shades of success and some might be able to earn a decent income - particularly if apps are priced sensibly.

    Moreover perhaps some developers might rightly view success as income from an app being a secondary income to supplement a main one. Sure they can't live off it alone, but it's jolly handy and compensates for their time spent in front of a screen when they could have been doing something else.

    I do hope there isn't an artificial debate about app pricing, saying that apps aren't worth more than 99p when some should be priced more.

    And what about application rental? This might be another option of developers and actually Adobe for example has launched more rental schemes with its CS products for desktops.

  41. Sarah Davis
    Coat

    stating the obvious

    isn't this exactly why the smart money never got involved? It was a no-brainer from the off

  42. Paul Ireland

    Tax dodgers

    If MPs really want to do something that will benefit this country in this "internet economy", they first need to close the tax loopholes that allow the biggest internet players like Google, Amazon, Ebay, Apple etc to avoid paying a large chunk of UK tax by using offshore companies in the likes of Luxembourg and Ireland.

    http://www.thisismoney.co.uk/money/markets/article-2127176/10million-tax-bite-Apples-estimated-6billion-UK-sales.html

    As for making money from apps, it's nice to see a report from academia containing a good piece of common sense. It is difficult to make money from app products. Most app writers wont make a decent return. There will be stories about the Angry Birds success, and more moderate stories about some making a modest living, but in the long tail graph, these success stories are in the minority compared to all the other app makers who don't make a decent return. Any maths done based on just salaries will be flawed too, since in most cases a large proportion of money would have to be spent on marketing/advertising the app.

  43. spiny norman
    Go

    I remember in the 1990s seeing ads on the tube for Cobol programing courses promising untold riches in the safe and prosperous world of data processing. I wondered at the time how many people who paid for those courses actually got a job, and if they did, how long it lasted.

    Haven't seen any iPhone or Android App Programing courses on tube ads yet. Clearly a gap in the market for some enterprising developer with training skills to make a killing, before the bottom drops out.

  44. opaque

    Don't make any money?

    Um, how much did Draw Something get sold for? Oh yes, $180 million.

    I think what people mean is that they can't make a good enough game so it obviously doesn't work!

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