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iPhone significantly affecting app development

updated 04:45 pm EDT, Tue September 29, 2009

Estimates produced by fixing firm

The popularity of the iPhone is having a major impact on developers, claims iPhoneAppQuotes, a company that pairs iPhone developers with institutions needing custom work. Outfits that have recently added app development as a service are now said to have an average of 34 percent of their business taken up by iPhone projects. On top of this, mobile development is said to create an average growth of 39 percent for "most" developers.

Some 42 percent of development houses are currently said to have between two to five workers. The App Store as a whole generates roughly $140 to $250 million for all developers each quarter, leaving a separate $60 to $100 million for Apple, which takes a 30 percent cut from all sales. The latter point has sometimes been a source of controversy, as it applies even to in-app purchases, regardless of their content.

by MacNN Staff



  1. lkrupp

    Joined: Dec 1969


    The Apple effect

    Whenever Apple disrupts an existing market or creates a new one all together you'll usually see comments to the effect that "This is nothing new, my (insert technology or device) has been able to do that for years". We saw this when the iPhone first arrived on the scene. Apps were nothing new we were reminded. Other phones could do this or that already. The iPhone was nothing "new". The difference, of course, is that nobody cared until the iPhone turned the smartphone market inside out. Where was this effect on developers before the iPhone came along? Nobody cared, that's where it was. This happened with the PC market in 1977 first and then again in 1984. It happened with the MP3 player market. And now it has happened again with the smartphone market. I love this company.

  1. iphonerulez

    Joined: Dec 1969


    Palm users are always yapping

    about how many apps their platform had and their five year-old Treos could do everything better than the iPhone. Any time some app came out for the iPhone, someone would say it was on their Treo. I think the Treo did have many thousands of apps. Maybe they're right. Palm had so many apps that they forgot to upgrade their OS for several years. Palm had such a powerful platform that they decided that they might as well just sit back on their asses and live off past glory. That's why they're not bothering to write synching software for their Pre. Palm and old users can just relive their glory days and expect Apple to carry them along.

    Even now the iPhone and App Store is just a rounding error to Steve Ballmer. It's nothing compared to the trillion downloads a year that are going to racked up by 200 million very powerful WinMo 7 devices selling for about $50 apiece. You'll see this happen in about a year from now when WinMo 7 smartphones have 50% market share.

  1. JulesLt

    Joined: Dec 1969



    And Palm users often forget how much Palm owed to the Newton and Psion PDAs that pre-dated them.

    The major question is - is the app business sustainable? Right now it feels like the early days of the web - when everyone felt they needed a web site (regardless of whether it would generate more income than it cost) and anyone who could string HTML together could make money.

    I don't think Apple's 30% is unreasonable - it's comparable with, or better than, a lot of the earlier download stores or payment frameworks in terms of the cut being taken, and it covers you for hosting / pushing out unlimited updates to users (and subsidizes all the free apps) - although I would hope that it falls with time.

  1. testudo

    Joined: Dec 1969


    Re: Newton

    The biggest concern for developers is going to be cost. Most AppStore purchasers are 'cheap', to be kind. How much money are you willing to spend on an app with limited appeal, if you realize that the user base will look at it and go "Man, I like it, but $20 is way too much. These other apps I got were free or just a couple of dollars"? This can end up limiting the availability of 'fringe' apps and the iPhone/iPod becomes a device for just popular titles.

    The question is whether you can convince enough of the potential user base that it is worth the money spent.

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