I promised to return with the full analysis of the iPhone App Store economics analysis, from every angle, with all data I have managed to find. This blog intends to paint the most accurate picture of the specifically Apple related iPhone App Store market economics – and lessons from here should apply to most other smartphone app stores as well. The one final piece of the puzzle that had been missing, that we desperately needed to ge the full, honest picture,was the Apple official revenue number, which we finally got a few days ago, at $1.43B total revenues generated over 2 years, and thus $1B paid to developer. Now we can do the full analysis. But first a few general comments.
ACTUALLY I LIKE APPS
There is nothing inherently wrong with making a smartphone app. I have warmly welcomed the apps opportunity to smartphones, years before we even had heard of an iPhone (my first book on mobile services, a global bestseller, hasthe word ‘apps’ in its subtitle). As most developers will instinctively underestand, if we compare mobile web services to smartphone apps, there are some obvious extremes where one is far superior and the other would be very clumsy as the solution. Take apps – if you want to deply Tetris as a stand-alone time-killer game for a phone, it can be done via a web app on the mobile data connection (seeking each next Tetris block from some server ‘in the cloud’ but that would be hideously tedious, overkill in a web solution. You want the app once downloaded onto the phone, and then never to connect and just offer us the Tetris entertainment whenever we have some minutes to kill – even in situations where a network connection is not available, say on an airplane or in the London Underground subway trains. For a single user (ie non-networked) game, in most cases by far the most elegant technical solution is an ‘app’.
Similarly there are cases where an app would be ridiculous. Take Google Search. We could theoretically attempt to install several times per day the full Google search environment with all web links onto a ‘smartphone’ – but the hard drive storage ability (and the web data load to install it) would be somewhere approaching the capacity of a modern super computer. Yes, a web search ‘solution’ could theoretically be deployed via a stand-alone app, but it would be the clumsiest dumbest way to deploy that, when a simple mobile web/WAP connection is all we need and a browser. So we understand, there are some extreme cases where a ‘pure’ app or a ‘pure’ web service is the natural solution, where the other is not a viable rival.
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