A day after the release of Apple’s iPhone application store, that was the question that Jason Fried over at 37signals asked. “Most [apps in the iPhone App Store] are $10 or less with the bulk at under $5. If that’s where the market settles out, developers who planned on making a living selling iPhone software may be in for market whiplash,” he wrote after sharing some early data on the price distribution of applications in the app store. To make money on $5-10 applications requires serious volume, said Fried. But he might actually have been wrong — it looks like there is room for developers to make a living developing low cost iPhone apps afterall.
Of course, “make a living” is completely subjective and I chimed in with a comment to that effect. If US$40,000 is enough to live comfortably — and it is in many parts of the US, especially rural areas — then 4,000 $10 apps per year gets you to that point, I said in my comment. That’s a pretty modest number of sales given the large number of iPhone users that Apple estimates by year’s end. Someone later chimed in that because Apple takes a 30% cut, my numbers were a bit off (4,000 sales at $10 actually equals about $28,000 in the developer’s pocket), but even so, given the relatively low barrier to entry, a single developer very likely could scratch out a modest living with a couple of moderately popular iPhone applications. And let’s not forget that in many non-Western countries, $28,000 per year is a very comfortable living (again — “make a living” is open to interpretation).
Numbers released over the past week seem to confirm that, and then some. Ars Technica reports that developer Eliza Block’s crossword puzzle application 2 Across, which sells for $5.99, is being downloaded at a rate that puts about $2,000 per day in Block’s pocket.
“With the sales volume that 2 Across has been seeing, even a $0.99 application would be bringing in around $300 per day,” writes Ars reporter Justin Berka. $300 per day is a six figure income (calculated over a seven day week) — that’s definitely a pretty good living for a single developer, especially given the likely time investment for a $0.99 application.
Software developer Tap Tap Tap, who also released some sales data according to Ars Technica, said that they sold 3,546 copies of their applications, Where To? (which sells for $2.99) and Tipulator (which sells for $0.99) for a combined 7 day total download revenue of $9,896. After Apple’s cut, the Tap Tap Tap team took in $6,927 — or about a grand a day. Again, not bad at all given the likely relatively low development costs.
As Ars points out, since the App store hasn’t been open very long, these sales numbers will almost definitely drop and level off. But if the report on TechCrunch this morning can be believed, and Apple is expecting to sell 40 million iPhones per year, there could be a huge market for iPhone applications. If a developer can get just one half of one percent of those 40 million users to buy a $0.99 application, that’s $198,000. After Apple takes their cut, that’s just under $140,000.
It seems almost a guarantee that we’ll be minting our first iPhone App Store millionaire before long.