WWDC survey suggests 70% of planned iPhone apps may be free
If a survey of developers attending Apple's Worldwide Developers Conference this week is of any indication, the average cost of a third-party iPhone application will fall well below $3.00, with the vast majority being made available at no cost at all.
Piper Jaffray analyst Gene Munster, who appears to be the Wall Street analyst making the best use of his invitation to the annual conference, took some time Monday following Steve Jobs's opening keynote to chat with 20 Apple developers mingling amongst the crowd of 5,200.
He found that 50% of them were in attendance because they plan to focus solely on developing applications for iPhone and iPod touch, while the remaining 50% are doing the same in addition to writing software for Macs.
In a surprising revelation, half the iPhone developers said they were authoring what Munster calls "Enterprise apps." Specifically, the analyst said 15% of the apps will tap into the iPhone's location-based services, 10% will be entertainment oriented, 10% will specifically be video games, and another 15% will be other Enterprise-level apps.
"We see this as a positive indicator of the potential for Enterprise adoption of the iPhone," he said. "We found the average cost of iPhone apps on the App Store to be $2.29, with 71% being free."
This startling stat may alone explain why Apple has started to encourage developers to consider charging for some of their apps in the future. The company will receive 30% of the revenue from all applications sold over the App Store to help offset the costs of marketing and operating the download service, but won't receive any reimbursement for operational costs associated with serving up free software.
In speaking to iPhone developers, Munster also discovered that 70% of them have written applications for other mobile platforms, but approximately the same percentage of their iPhone-bound apps will not be made available for rival platforms.
In particular, those developers pointed to the iPhone's standout feature set, which will drive unique applications that cannot easily be ported to software on rival mobile phones.
"Ultimately, we believe this creates added value for the iPhone over and above other mobile platforms," Munster said. He added that all but one of the developers surveyed said that the iPhone developer tools made application development easier than they had expected, with the majority going out of their way to praise Apple for providing the most intuitive and easy to use mobile development platform they've ever experienced.
Piper Jaffray analyst Gene Munster, who appears to be the Wall Street analyst making the best use of his invitation to the annual conference, took some time Monday following Steve Jobs's opening keynote to chat with 20 Apple developers mingling amongst the crowd of 5,200.
He found that 50% of them were in attendance because they plan to focus solely on developing applications for iPhone and iPod touch, while the remaining 50% are doing the same in addition to writing software for Macs.
In a surprising revelation, half the iPhone developers said they were authoring what Munster calls "Enterprise apps." Specifically, the analyst said 15% of the apps will tap into the iPhone's location-based services, 10% will be entertainment oriented, 10% will specifically be video games, and another 15% will be other Enterprise-level apps.
"We see this as a positive indicator of the potential for Enterprise adoption of the iPhone," he said. "We found the average cost of iPhone apps on the App Store to be $2.29, with 71% being free."
This startling stat may alone explain why Apple has started to encourage developers to consider charging for some of their apps in the future. The company will receive 30% of the revenue from all applications sold over the App Store to help offset the costs of marketing and operating the download service, but won't receive any reimbursement for operational costs associated with serving up free software.
In speaking to iPhone developers, Munster also discovered that 70% of them have written applications for other mobile platforms, but approximately the same percentage of their iPhone-bound apps will not be made available for rival platforms.
In particular, those developers pointed to the iPhone's standout feature set, which will drive unique applications that cannot easily be ported to software on rival mobile phones.
"Ultimately, we believe this creates added value for the iPhone over and above other mobile platforms," Munster said. He added that all but one of the developers surveyed said that the iPhone developer tools made application development easier than they had expected, with the majority going out of their way to praise Apple for providing the most intuitive and easy to use mobile development platform they've ever experienced.
Comments
I think those numbers will change over time to become 50- 50.
Pete
I think a lot of people see the iPhone app as a way to further their online service or the Mac desktop app.
Considering the quality of the apps featured at WWDC, it doesn't seem like much of a surprise that most of them are free. Most of the apps demoed were really just front ends for websites optimized for the iPhone.
Well, the guys selling the medical flash cards and such are going to be charging real money. If I were a doctor and I saw that CAT Scan app demoed, I think I would buy an iPhone and that app just for its own sake. And that is just one app and it showed a high level innovation and value add for the customer.
AppStore is what makes the iPhone so intriguing right now. It's a lot harder to get started out on the Mac, even though of course I am actually studying that ? because they are so closely related. Apple are welcome to 30% for all the advantages of delivery, transactions, anti-piracy and advertising that they are establishing.
In other words: back to Xcode.
I have a little something that I'm learning Cocoa so I can get started on. Thinking of a fairly low price, but not free. I'd kind of like to be able to switch over to this whole developer thing.
AppStore is what makes the iPhone so intriguing right now. It's a lot harder to get started out on the Mac, even though of course I am actually studying that … because they are so closely related. Apple are welcome to 30% for all the advantages of delivery, transactions, anti-piracy and advertising that they are establishing.
In other words: back to Xcode.
If this turns out well, Apple may consider using this to sell Mac software.
Good for you for charging something for your software. Your time and effort is a valuable resource.
I wonder how many people will continue development of software for the hacked iPhones given that their is an App store with a lot of free software.
"We found the average cost of iPhone apps on the App Store to be $2.29, with 71% being free."
This kind of statement usually bugs me. Who cares what the average selling price of all the apps available is? If there are 10 really popular apps that cost $10 and most people want/need 3-5 of them, it doesn't matter if there are 10,000 other free apps out there--each user would be spending $30 to $50 on apps.
An average app cost means nothing until you can make it an average of apps downloaded. Obviously that data will not exist for a month or so, but the $2.29 means absolutely nothing.
I was looking forward to no more than 25% free apps. I think it devalues the iPhone and creates 25 flavors of the same type of app. When people charge those that are successful have money to innovate and maintain their product, the free ones stagnate a lot of times.
Perhaps if an app is not up to Apple quality standards or if they have 2,000 weather apps, they will be kicked back to the developer or rejected? It's really up to the consumer to determine which apps will fail or succeed.
I have so many Web Apps bookmarked on my iPhone home-screens that I can't imagine being able to actually fit them all on an 8 or 16GB iPhone (along with my music, et al.)
I think I'd want many of those apps to remain Web Apps and not become App Store versions...
Who's going to make Web Apps anymore?... Anyone?....
So what's the future of Web Apps now?
I have so many Web Apps bookmarked on my iPhone home-screens that I can't imagine being able to actually fit them all on an 8 or 16GB iPhone (along with my music, et al.)
I think I'd want many of those apps to remain Web Apps and not become App Store versions...
Who's going to make Web Apps anymore?... Anyone?....
Web apps were always a stopgap measure.
I was looking forward to no more than 25% free apps. I think it devalues the iPhone and creates 25 flavors of the same type of app. When people charge those that are successful have money to innovate and maintain their product, the free ones stagnate a lot of times.
I'm curious to see if any sort of rating system is implemented precisely for this reason. If I have a choice of 10 apps that do the roughly the same thing, I really don't want to have to beta them all.
(http://youtube.com/watch?v=irXCMdRprfw) but am looking for more info. any thoughts?
Also it would be nice to see the size of the file that will be installed on the iPhone/iTouch. Maybe this is also only shown when viewed by iPhone/iTouch.