Striking It Rich: Is There An App For That?

Despite the high costs, Barnard was one of the lucky ones. Most apps take at least six months of full-time work and cost between $20,000 and $150,000 to develop, according to Forrester Research, which covers the tech industry. Apple rejects almost 60 percent of submissions at least once, often—according to programmers—with little more than infuriatingly vague or inconsistent explanations. Of the 85,000 that have been accepted, only a few hundred sellers have much chance of supporting full-time work. "It's a lot like the music business," says Barnard, who left a job in record engineering to develop applications full time. "Some indie bands make money, but most don't. Most are not the Michael Jacksons and Madonnas of the world."

But even App Store equivalents of the King of Pop and the Material Girl are struggling. In 2009, Ethan Nicholas left a job with Sun Microsystems after making $800,000 in just five months with his simple artillery game called iShoot. Today, the App Store icon from North Carolina is himself staring down the barrel of a gun, struggling to produce another hit game after iShoot was buried by competitors and copycats. "It's terrifying," says Nicholas, who says he is "not a millionaire" and describes iShoot's success as "pure luck." Despite spending eight months and more than six figures developing a second shooting game to be released this month, he says that he is still "very worried about being a one-hit wonder."

Nathan Hunley is another programmer whose App Store success has not led to commensurate financial or emotional security. His Dizzy Bee game was one of the first 500 products in the App Store in July 2008, and like Demeter, he stars in an Apple promotional video. The opening scene, shot through a honey-glazed lens on the streets of Tokyo and scored with inspirational music, shows Hunley with a look of spalike tranquility on his face. But while developing for the iPhone has given him the flexibility to travel the world while working, it hasn't wiped away his worries. Despite a couple of top 50 hits, Nathan and his cofounder "still go from game to game" and question whether they can afford to continue selling. "We made enough to live, but not nearly as much as if we kept our jobs at a regular game company," he says by e-mail, adding: "We're far from calling ourselves 'app store millionaires.' "

So, it seems, are most other App Store developers. The iPhone's popularity means that mom-and-pop programmers must now compete with some of the world's biggest brands and game developers, many of whom have recently decided that the mobile market is too important to leave to the little guys. Half of the top 10 paid (as in not "free") apps of 2008 were produced by small developers, according to Forrester. Today, only one app in the top 10—RedLaser—was built by an independent developer. Jeff Powers and Vikas Reddy, the 20-something makers of RedLaser, a bar-code reader that makes instant online price comparisons, say that they are "still in the hole" despite more than $100,000 in revenue. "We've upgraded from Ramen Noodles to Cup O'Noodles, and pretty soon we'll be on to Campbell's," Powers likes to joke.

Anything more exciting than canned soup may be a long way off for most full-time developers. Over the past 18 months the average price of apps has crashed: now three out of four cost 99 cents or less, according to the tracking firm 148apps.biz, in part because the Big Brands offer their applications for free as marketing tools rather than as revenue streams. "Speaking as a small developer who's been releasing Mac software for over a decade, the App Store is broken," Gedeon Maheux, cofounder of the software company Iconfactory, wrote on his blog last month under the headline LOSING RELIGION.

Of course, Apple's loss is potentially its competitors' gain. Palm, Google, Microsoft, Nokia, and RIM, the makers of BlackBerry, have each launched software stores in recent months, and are welcoming disgruntled App Store programmers who want to swing their pick on a new mountain. Let the next gold rush begin.

© 2009