The iPhone App Store Gold Rush Is Over

We've heard the woes of app developers waiting for payments, but at least there were still payments to get back then. Lately it looks like the App Store goldmine has dried out and developers are barely getting by, app-by-app.

I'd seen the "Look at the happy developers!" propaganda videos Apple produces, and I have to confess that I bought into them. Everyone just looks so happy and successful in Apple Land! But my feelings about iPhone app developers and Apple changed greatly over the past while: I went from being envious of the supposed overnight millionaires to realising that they were actually not very well off, some left with debt after their stints with the App Store.

NEWSWEEK interviewed a handful of those developers, some of whom were in fact featured in the videos I so attentively watched, and they all seem to share the same story: The money's run out.

It certainly starts out nicely enough: a developer might make $US45,000 in revenue in less than three months, some might even make several hundred thousand over similar periods of time. Then something goes wrong:

Then [come]the expenses: $29,000 for programmers, $15,000 living costs, $14,000 to Apple, $7,000 for marketing, $5,000 for legal and administrative services, $4,000 for logo and Web-site art, and $US1,800 in loan repayment.

By the end of it, many developers find themselves "several thousand dollars in the red". The lucky ones who manage to break even or actually cut a profit aren't all that better off either though. Too often they'll have abandoned their old jobs in the name of App Store success and are left struggling to produce another success as funds dwindle. And that's no piece of cake:

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.

Worst part? All that time and money might not even help developers get anywhere. Not because they might make a lousy app (though I'm sure many do), but because Apple "rejects almost 60 percent of submissions at least once". Now, that rejection rate is just a wee bit different from the fluffy 10% rejection rate Apple has claimed at times, so I'd love to know how everyone is coming up with their numbers.

No matter what the real rejection rate for iPhone apps is though, the fact remains that developers are finding that the App Store is no longer the cash cow it was thought to be and it makes me wonder whether they'll run off to find something more profitable to develop for. After all, unlike in the early days, Apple's App Store isn't the only mobile application store in town anymore. [NEWSWEEK]