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How to make money developing iPad apps

iPad Applel Tablet

Anyone who wants to make money developing apps for the Apple iPad had better be prepared to move fast.

Like the iPhone, the iPad will enable start-ups large and small to ride on the back of a brand new platform where no rival is yet all-powerful.

I saw the evolution of the iPhone apps market close-up, due to my day job, yet by the time I actually considered making iPhone apps to generate a side income for myself, the risk versus reward balance had shifted:

  • There were tens of thousands of competing apps
  • The charts were saturated
  • It was almost impossible to get new content noticed
  • Average price points had collapsed

The same will happen even quicker with the iPad, since iPhone apps work on the device and also many people around the world are aware of the potential market thanks to the iPhone’s success.

Below are five thoughts on getting ahead of this crowd.

If after reading you’ve got any further ideas or tips on making money developing for the iPad, please add them in the comments below!

Five tips on making money on the iPad

The development of the marketplace for iPad apps and other revenue streams won’t follow exactly the same path we saw for iPhone and iTunes.

Those pioneering digital marketplaces have set many of the ground rules, so anyone making content for the iPad already knows roughly what to expect.

Yet I do believe these established stores offer clues as to how will the opportunity to make money via the iPad will shift over time.

1. Get in early with your iPad app

If you’ve got a great idea for an app that specifically targets the iPad – using its big screen and powerful processor – don’t hang about.

Get your app written fast, and get it out there.

This is vital if you’re a one or two-man start-up, let alone a full-blown developer. The opportunity to compete toe-to-toe with bigger rivals fell away fast as competition increased on the iPhone.

This will be even more important on iPad, where you’re already competing with 140,000 iPhone apps.

Yes, there are still tiny teams making thousands of dollars every day with new apps on iPhone, but they are very much the exception to the rule. Most apps make very little, and we never hear about them.

Don’t be fooled by the rare success stories, and remember my interview with an iPhone app developer who took too long over his app and arrived third in a very niche market. Be quicker!

  • If you’re going to try to make money by developing for iPad, start yesterday (someone did). Don’t delay another day!

2. Forget high price points

Apple and other established players may talk about premium priced products on the iPad, but in reality pricing power will likely fall away as quickly as it did on the iPhone.

When iPhone first launched, video games companies salivated over the opportunity to sell cheap-to-develop games for $10 to $20.

That window lasted about six weeks – most games cost 99 cents / 59p now.

Create an app with a potential audience that’s big enough to support your product and make a decent profit at a very low price point, unless you’re product is very niche.

  • If you can charge more to start with, consider it a bonus.

3. Novelty apps will sell well early on

Some of the first iPhone app successes were Frat boy affairs that made your iPhone fart, turn into a pint of beer or become a lightsaber.

I’m pretty sure Steve Jobs wasn’t thinking about iFart when he dreamed up the iPhone, and I’m sure he has higher ideals for the iPad.

But in the first days of the iPad’s life when the device is still a novelty, so will be some of its most successful apps.

Don’t just replicate what worked on iPhone – you’re already competing with those apps, since they run on the iPad, too.

Instead, think about using iPad’s larger screen and other features, and also its living room credentials.

  • A talking picture frame? An app that turns the iPad into a fake mirror? Or a Whoopee cushion? Something dumb will make it big.

4. Consider advertising and other revenue streams

It took a while for the iPhone app crowd to move towards advertising, despite the fact it’s the business model that’s been shown repeatedly to work best with digital content.

Even Apple has now embraced mobile advertising, buying the mobile ad provider Quattro Wireless for $275 million in early January 2010.

If you can build your App in such a way as to deliver a compelling advertising proposition – a big audience and a decent but not intrusive ad presence – you can get on the ‘freemium’ bandwagon from day one.

Also, something that’s still fairly new to iPhone but that I expect to make waves faster on the iPad is micro-transactions. This is pretty much built into the iPad proposition, since you can sell content via iTunes and the new iBook store, as well the micro-transaction support now built into the iPhone operating system.

This is a riskier avenue to explore than advertising, because while micro-transactions are huge in South East Asia, they’ve yet to be fully embraced in the West (although some Facebook apps have had success in squeezing money out of the model).

  • Don’t think you have to sell your app. That may be the right approach, but digital media has a tendency to go free – whether officially or through piracy – so it could be a better idea to try to anticipate that from day one with the iPad.

5. Don’t expect iPad to save big media

Of all the pre-announcement speculation, the idea the iPad was going to ease the plight of existing newspapers and magazines in the digital world was the least convincing.

iTunes has been selling digital music successfully for a decade, but you try finding someone in the record industry who says that has led to business as usual. Quite the opposite.

iPad means more disruption to those business.

I sometimes still buy a newspaper because it’s so easy to read on the sofa, in the garden, or on a train.

But with the spread of truly portable readers, this near-to-last advantage of paper is diminished, too.

While I might conceivably buy a digital newspaper to read on my iPad, I’m equally likely to access free websites in the garden or on the train, and not bother with the paid-for media at all.

What does that leave as the market for the magazine industry – reading in the bath?

  • If you’re a small guy, think about how the iPad will help you fight News International and Conde Naste. And if you’re the latter… well, nobody is going to line their kitty litter tray with a tablet computer for a while.
{ 19 comments… add one }
  • 1 Financial Samurai January 28, 2010, 6:28 am

    Good stuff. But how does someone like me with absolutely no programming skills develop one? Is the simple answer, I can’t?

    Come to SF. The big announcement and shindig happened right here downtown!
    .-= Financial Samurai on: Someone Always Farts In A Crowd =-.

  • 2 The Investor January 28, 2010, 10:21 am

    @Sam – It’s fairly straightforward to hire good programmers (and also the artists and others you’ll need) to develop small apps of this size from the likes of e-lance. But it will cost real money to get anyone half decent, which obviously means a bigger risk you wont’ recoup.

    Another option is to find a friend who can program and do the rest of the design/management yourself. Living in San Francisco, you shouldn’t be able to throw your iPhone far without hitting such a person on the head? 😉

  • 3 Financial Samurai January 28, 2010, 6:44 pm

    You’re right. I’ll ask my poker group tomorrow night! There are 2 programmers, one guy from Twitter, a tech lawyer, a vencture capitalist, a online advertising rep, and a couple entrepreneurs!

    You should create a movemet to make the English people more creative! Why are Americans dominating so much?
    .-= Financial Samurai on: Book Review And Giveaway: “Secrets Of A Stingy Scoundrel” =-.

  • 4 The Investor January 28, 2010, 6:59 pm

    @Sam – OMG, that’s the perfect start-up right there! 🙂

    Re: American dominance, I don’t think it’s quite as clear-cut as you think. Obviously the West Coast is absolutely supreme, but as we’ve discussed before Brits and Europeans are innovating, too. For instance, when I was student in the early 1990s I knew guys who created a 3D graphics library system for PCs, based here in the UK. Very ahead of its time, at the time. That system was ultimately acquired by Microsoft and became Direct 3D. I’ve mentioned ARM before to you, too – its chips power 98% of the world’s mobiles that matter, and it’s a UK company.

    What the British have always had a problem with is scaling. Once they can sell out for a few million, they usually do (people like Sir Richard Branson are the exception that prove the rule). If Twitter or Facebook had been set-up by Brits, they’d have sold up long, long ago I think.

    Cheers for stopping by, and good luck with the iPad app!

  • 5 Financial Samurai January 28, 2010, 7:15 pm

    OK, just needling you. I’ll have to shoot you something private later. At the very least, I need a free steak dinner and drinks when I’m in London next with what I’m going to tell you later.
    .-= Financial Samurai on: Where Americans Pay The Most To Live And Why =-.

  • 6 The Investor January 31, 2010, 6:29 pm

    @Chris – I haven’t seen it first hand, no – it’s only just been revealed, and alas I wasn’t at the launch. I think it will do very well when it comes out, provided Apple gets the marketing right.

  • 7 Jeremy February 18, 2010, 3:00 pm

    Hi just wanted to clarify something, will the iPad have a section on the App Store for iPad specific apps? Wouldnt that help the sales for those apps?

  • 8 The Investor February 18, 2010, 3:39 pm

    Hi Jeremy – I don’t think there’s been an announcement on this, but I absolutely expect an iPad-only section, and you raise a good point that this could help with the sale of iPad apps.

    What we’ll have to see is whether iPhone apps scale reasonably on iPad. If they do, then it’s all the free schlock I’m worried about undoing the case for developing iPad apps, not so much the lack of potential marketplace.

  • 9 Jeremy Johnson March 10, 2010, 4:10 pm

    Hey, this was a very cool article to read – I have a twin brother who has his own iPhone App/Game development company and he does all his own programming and outsources graphics and sound. I think I will show him this article and get him thinking about the IPAD – thanks!

  • 10 Financial Samurai April 4, 2010, 4:03 pm

    I gotta say, I played with one yesterday here in SF, and it ROCCKED!

    It moved me. With the bigger interface, typing is now a breeze. I want one.
    .-= Financial Samurai on: The Katana: Spring Cleaning and Moving Forward =-.

  • 11 The Investor April 5, 2010, 11:46 am

    I’m consumed with jealousy, just for getting to try the future first! A friend has ordered one via a pal in the States that should arrive tomorrow, depending on the post. I think I’ll probably wait for Apple to release a version that’s ironed out the quirks though – maybe 2011?

  • 12 BC23 April 6, 2010, 6:25 am

    I found this article very interesting, and like financial samurai i have no programming experience but i would really like to get into the app developing business. Any helpful tips for an aspiring developer?

  • 13 raymond September 26, 2010, 2:55 am

    do anyone know how can i publish my book to ibooks or can i have my own apps contents a series of my book to sell in apple appstore? how does it work?

  • 14 FriendsTagger July 7, 2011, 4:56 pm

    @Jeremy .. Kudos to your brother doing all his work specially in something like App Developing.

  • 15 Andrey July 22, 2011, 2:17 pm

    iPad app market is so competitive. There are companies with very high budgets to develop games, apps. I had sent a few apps but they didn’t become much popular. An original idea can still work but hard to find it 🙂

  • 16 Speed Tests August 9, 2011, 12:25 am

    @Andrey along with being competitive field it’s also getting wider everyday since a lot of other options around. Android, Ovi, iPhone, iPad, Galaxy, etc.. You just have to choose right and focus on whatever path you will take.

  • 17 Dave October 13, 2011, 11:47 am

    Many business clients no longer aim for making money on iPad apps, they think about the costs in alternative ways. If using an iPad in Enterprise can prevent printed booklets, sales documentation not having to be carried around and customer/sales information in your hand over the air the costs stack up.

    To make money as a small venture at the moment the app needs to be sticky to keep customers coming back, games obviously score highly in this area but they are also costly to develop. The only realistic revenue channels are inApp purchases for virtual goods and in app advertising.

    Still if you have ideas and limited budget the other solution is to partner with a software development company and if the idea really is that good, they would probably be willing to develop it for you in exchange for revenue share. The issue arises when the app needs to be marketed. If you don’t have a plan, you will of course fail to get seen by anyone.

    Good luck all.

  • 18 Nend Heng March 15, 2012, 2:00 pm

    I am majoring in Marketing undergrad, but for grad school I would love to solely focus on social media and how to market online using websites like facebook, twitter, etc. Do programs exist like this in grad school? Thanks!

  • 19 BernardHyde January 4, 2013, 10:23 am

    Most people have the misconception that to develop a good app, it needs to be complex. However in reality, you need to define the concept clearly so that it grab attention spontaneously.

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