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Can you make money developing iPhone apps?

I have been enjoying my iPhone [1] for a few months now, although as I told blogger Len Penzo for this article [2]:

…buyer’s remorse kicked in over my iPhone almost as soon as I bought it.

For a start, I’m not using anything like enough of its functions. The camera isn’t as good as I expected, and 3G coverage is poor where I live. Adding to the misery, like any good money blogger,  I worked out the total iPhone bill in advance for my 18 months minimum ownership, so I know I am paying over $1,500 in your U.S. pesos for the pleasure of this disappointment.

Finally, to buy it I had to track it down via multiple shops and phone calls — there was a run on 3GS iPhones in London at the time — which reminded me how time-consuming buying stuff is.

Since then, I’ve started appreciating my iPhone a little more.

Partly it’s because I’ve downloaded a lot more apps, and paid for a few, too – which really makes a difference to quality.

In addition, the pain of buying the thing is fading!

Making millions from iPhone apps

One way to really justify buying the iPhone would be to make money from it.

You’ll have read stories about lone programmers or small teams who’ve made minor fortunes from their iPhone apps:

For more success stories, you might read this excellent roundup [5] from a blogger looking for iPhone insights to transplant to Kindle development.

That article – and others I’ve read – makes it clear that:

  1. App store competition is brutal
  2. Most successful million-dollar apps are made by proven developers
  3. You have to keep developing to stay in the game
  4. Most apps make no money

What about more modest app ambitions?

What if my aim was not to quit my day job to make millions overnight, but to create a passive income stream [6] to bring in a few hundred pounds a week?

I’ve some experience as a programmer, and much more at putting together teams and budgets. What if I pulled together a niche app for say £5,000, using outsourced programmers and artists to develop my own great idea? (Just as soon as I’ve had one…)

Obviously the execution risk would be large. And even if my app was successfully created, there must be tens of thousands of people trying to do the same thing.

Also, there is a big gap between the apps making hundreds of thousands of dollars, and the apps making basically nothing – probably due to the way the apps are ranked on the App Store.

If you’re at the top of the charts, you pull in lots more sales because you’re visible. Success begets success – it’s not a linear but an exponential sales curve.

As a result, even apparently successful apps often only make a little money, as this article from The Guardian [7] explains:

Becoming an iPhone mogul is much harder than just hitting the charts, according to the LA-based developer Rick Strom. His applications do fairly well in the charts – Zen Jar (costing 99c) ranks around 30th in the App Store’s social networking countdown, for example. However, he says, that means little in terms of downloads: roughly 35 a day, making little more than a dollar an hour after Apple takes its cut.

“Keep in mind there are over 36,000 apps in the App Store,” he wrote on his blog . “If the apps on the category charts are doing those sorts of numbers, what do you think the rest of them are doing? Nothing. Absolutely nothing. They aren’t selling at all.”

That article was written in March. There are now 100,000 apps in the App Store – nearly three times as many – so things will be worse today.

Obviously there are far more iPhone owners, too, but like any hit-driven business most consumers will be buying the same software.

Still, you have to be in it to win it as the Australians say. And while creating an App as a side project is far from a sure thing, it’s nothing like as risky as starting another business [8], so it might make sense in the right circumstances.

How to get started in iPhone app development

Sticking with The Guardian, it ran good article [9] on getting started on with iPhone App development in eight easy steps.

The guide explains where to get the SDK and how you need to sign up as an official developer, and more importantly how you need to learn Objective C, the iPhone programming language:

“It is liked because in similar ways to Java, it deals with many of the problematic parts of programming….

It’s nice, simple, hides the complexities of the hardware away from the developer and deals with (on the whole) the major cause of programming issues in C and C++ which is memory leaks.”

As I said, I don’t think actually programming the app myself would be a good use of my time given that I haven’t programmed in anger for many years. But even as a project manager, I’d need to have a good understanding of the hurdles my team would face – and the going freelance rate for Objective C coding!

The same article estimates it will take a few months of part-time work or one month of full-time coding to create an iPhone app.

The lowdown on iPhone app development

It’s clear from my research that creating an iPhone app is far from a sure route to wealth. Not a big surprise!

In part two, I’ll interview an iPhone developer in the UK for some insights into what it’s really like to create an iPhone app in your spare time. Subscribe [10] to ensure you get it!

Further reading

Here’s some more useful articles I discovered about creating iPhone apps: