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Mobile app downloads grow 11% in Q1 2013, revenues hit $2.2B

post #1 of 29
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The overall app market for smartphones and tablets grew to $2.2 billion in revenue for the first quarter of 2013, according to new figures out from Canalys.

appstore


Canalys' App Interrogator research looked at the leading app stores in more than 50 countries, including Apple's App Store, Google's Play Store, Microsoft's Windows Phone Store, and BlackBerry World. The analysis found that downloads across the four stores were up 11 percent in the first quarter worldwide over totals in the fourth quarter. Direct app revenue ? from paid-for apps, in-app purchases, and subscriptions ? grew by nine percent.

In total, Canalys found that total app downloads from the four major stores reached 13.4 billion for the quarter. Total app revenue hit $2.2 billion.

Canalys' study found that developing markets ? Brazil, Indonesia, South Africa, and so forth ? were the sources of the strongest growth in revenues and downloads, due in part to the rapid growth of smart devices as a computing platform in those areas. North America saw significant growth as well, though, with revenues and downloads increasing by eight and six percent, respectively. Western Europe saw eight percent growth for app revenues and 10 percent growth for downloads.

The study found that Apple's iOS App Store and Google's Play Store were still the top app repositories, with BlackBerry World and Windows Phone Store remaining distant second tier competitors.
post #2 of 29
I have to say, there just isn't much interesting news coming from Apple Insider these days. Reporting the news use to be so much better. Reporters had good sources, they would really work their sources and get THE story. Either Apple has really tightened the screws on leaks or the reporting has become so mediocre. It's been several months and we really haven't heard anything concrete concerning iOS, Mac Pro update, or any other interesting information on something new that might be happening within Apple.
post #3 of 29

A thought.

 

How about an analysis of the exact number of mobile app developers, the average sale price and the yearly revenue generated by the app. With a million apps and an average payout of $7 billion a year that equates to $7,000 per developer if there were a million developers which their aren't. So i'd guess that the average amount a mobile app developer makes a year to be about $20k. Right around minimum wage.

post #4 of 29
Originally Posted by battlescarred1 View Post
Reporters had good sources, they would really work their sources and get THE story. Either Apple has really tightened the screws on leaks or the reporting has become so mediocre. 

 

"But but but but, Tim Cook couldn't POSSIBLY have doubled down on secrecy!"

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post #5 of 29
Quote:
Originally Posted by Peter Cranstone View Post

A thought.

 

How about an analysis of the exact number of mobile app developers, the average sale price and the yearly revenue generated by the app. With a million apps and an average payout of $7 billion a year that equates to $7,000 per developer if there were a million developers which their aren't. So i'd guess that the average amount a mobile app developer makes a year to be about $20k. Right around minimum wage.

Not very scientific I know, but it's probably 20% (or less) of the developers are making a living and 80% (or more) aren't.

 

Just a guess.

 

I agree it would be interesting to see a breakdown of the numbers.

post #6 of 29
Quote:
Originally Posted by Peter Cranstone View Post

A thought.

 

How about an analysis of the exact number of mobile app developers, the average sale price and the yearly revenue generated by the app. With a million apps and an average payout of $7 billion a year that equates to $7,000 per developer if there were a million developers which their aren't. So i'd guess that the average amount a mobile app developer makes a year to be about $20k. Right around minimum wage.

 

You simply can't do the math that way.

 

Look at a bank. They write an iOS App so people can access their accounts from a mobile device. The App is provided as a "service" to customers. They don't make any direct revenue from the App. So they would not be on the receiving end of any App payouts from Apple. However, they will have their own in-house developer(s) (for security I doubt they'd use one of the many App development companies out there). That person is going to make a hell of a lot more than $20K per year.

 

This can be applied to all the companies who supply Apps so customers can interact with their business. An App doesn't always have to make money, and Apps that make $0 could still have been created by a very well paid developer.

 

Large companies (like banks) would have developers for iOS, Android, Windows and Blackberry. As the size of the company gets smaller they support fewer platforms (maybe only iOS and Android). You keep working down the line and you're left with companies who develop for only one mobile platform, and most of the time it's iOS (with others possible added later if it's successful).

 

 

The haters like to say that of the 800,000 iOS Apps that only a few are useful and the rest are junk. Or there are only a few hundred good Apps and the rest are simply different versions (or poor copies). This is complete BS. If you look at banks, CC companies or other financial institutions you could account for perhaps 2,000 Apps right away. Add in sports teams, schools or other organizations and suddenly you've got tens of thousands of Apps. Now add in local and small businesses and you can quickly see there are a lot of Apps out there you will never hear of or use unless you live within the community that App is meant to serve. And they are all probably free and were created by a developer who got paid for their time.

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post #7 of 29

The only question is - what is a 'living'. 

 

A second thought - if 20% are making a living then what is the percentage that are building a sustainable business via the App store. My guess is about Zero. And herein lies the problem - Apple extracts ALL of the profits and leaves nothing for anyone else. This is neither sustainable for Apple or for the developer ecosystem. You cannot build a business off of Apple, but you can build a business off of Microsoft. 

 

At some point Apple will have to return the profits to the ecosystem or think up a new screen to entice users to buy. So far there is no compelling financial reason to be an Apple developer.

 

It's a case of Apple winning the battle, but losing the war. Balmer was right - eventually it boils down to developers being able to build a sustainable business. Apple hasn't met that metric.

 

Yet.

post #8 of 29

This is pretty good news for  Apple.  We know that Apple is now paying out $1,000,000,000/month to developers based on the last known data points.  Given 3 months in the quarter, Apple is paying out about 130% or so of all the developer revenue...

 

Wait...

 

That does not make sense Canalys....

 

Now some of Apple's payouts are from the Mac App Store so that might get Apple to just about 100% of the mobile payouts.

post #9 of 29
The readers of this site are obviously interested in the breakdown of what fraction of app revenue accrues to Apple, and what fraction to others. Is that information not available?
post #10 of 29
Quote:
Originally Posted by Steven N. View Post

This is pretty good news for  Apple.  We know that Apple is now paying out $1,000,000,000/month to developers based on the last known data points.  Given 3 months in the quarter, Apple is paying out about 130% or so of all the developer revenue...

Wait...

That does not make sense Canalys....


Now some of Apple's payouts are from the Mac App Store so that might get Apple to just about 100% of the mobile payouts.

Of course it doesn't make sense. Canalys is simply making projections based on some limited subset of the data. I'm pretty sure Apple doesn't give them access to the App Store revenues in advance of the quarterly announcement. How else is Canalys going to get their data? Obviously some type of sampling and extrapolation (assuming that they didn't simply make the number up).
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post #11 of 29
Quote:
Originally Posted by Peter Cranstone View Post

The only question is - what is a 'living'. 

 

A second thought - if 20% are making a living then what is the percentage that are building a sustainable business via the App store. My guess is about Zero. And herein lies the problem - Apple extracts ALL of the profits and leaves nothing for anyone else. This is neither sustainable for Apple or for the developer ecosystem. You cannot build a business off of Apple, but you can build a business off of Microsoft. 

 

At some point Apple will have to return the profits to the ecosystem or think up a new screen to entice users to buy. So far there is no compelling financial reason to be an Apple developer.

 

It's a case of Apple winning the battle, but losing the war. Balmer was right - eventually it boils down to developers being able to build a sustainable business. Apple hasn't met that metric.

 

Yet.

 

Now you're just trolling. Not sure how I missed the new account you created.

 

The developers get 70% of the revenue, Apple keeps 30%. This is the SAME as what Google offers through the Play store.

 

No compelling reason? How about hundreds of millions of iOS users to buy your App? How about the fact Apple takes care of the distribution (like bandwidth) for you? Or takes care to notify users when you updated your App so they can download the newest version (for free)? How about the fact Apple collects money from people who use credit cards and handles all the transaction processing fees for you, then cuts you a single cheque?

 

For everything Apple provides, giving up 30% is very reasonable.

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post #12 of 29
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Originally Posted by NormM View Post

The readers of this site are obviously interested in the breakdown of what fraction of app revenue accrues to Apple, and what fraction to others. Is that information not available?

 

No, we all know it's 70% to devs, 30% to Apple.

 

What people are interested in is how much more money Apple and their developers make than Google Play. The article states Apple and Google are the top two, but they're being poilte. You can finish the race in 2nd place and still be miles behind. Google doesn't release these figures as it would embarass them when compared to Apple, who regularly brags about how much the App Store has pad to developers and how many Apps have been downloaded.

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post #13 of 29
For those interested in a little more detail on what's being downloaded and from who you can check out current stats at AppAnnie.
http://blog.appannie.com/app-annie-index-turbotax-whatsapp/
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post #14 of 29
Quote:

Originally Posted by Peter Cranstone View Post

So far there is no compelling financial reason to be an Apple developer.

 

Releasing an app on the appstore and having it available to hundreds of millions of customers, who are all signed up with credit cards is not a compelling reason? lol.gif

 

There are many good reasons as to why many developers are developing for iOS, while completely ignoring other platforms, such as the monstrosity known as Android.

 

(1) People on iOS have money. People on iOS are willing to spend money for good apps. The Apple appstore is a great place to sell your apps, and Apple pays out billions to developers. 

 

(2) People on Android have very little money. People on Android are not that willing to spend their money. Many people on Android are cheapskate pirates. The Google appstore is a shitty place to sell your apps and not many developers are making money from Android apps. Android is for amateurs, and Android also attracts many amateur developers who make crappy apps. That's why many apps for Android look like complete crap. It is truly amateur hour.

post #15 of 29

I'd also like to see more developers and companies releasing more expensive apps. And I don't mean making games more expensive, just for the sake of jacking up the price. I mean actually releasing something that is worth charging a bit more for.

 

Just because it's a mobile app, doesn't mean that it has to cost 99 cents.

 

Give us some more full games for iOS, games that are ported from consoles and PC/Mac. I don't care if they're 10 Gb large. People would like full games, and not just short 99 cent games. And people would also pay more for those sorts of full games, if they are good enough.

post #16 of 29

Quote:
Originally Posted by EricTheHalfBee View Post

 

No, we all know it's 70% to devs, 30% to Apple.

 

What people are interested in is how much more money Apple and their developers make than Google Play. The article states Apple and Google are the top two, but they're being poilte. You can finish the race in 2nd place and still be miles behind. Google doesn't release these figures as it would embarass them when compared to Apple, who regularly brags about how much the App Store has pad to developers and how many Apps have been downloaded.

 

 

In the first quarter, the iPhone maker accounted for 74 percent of the total revenue generated by the four leading app stores—which also include Google Play store, Microsoft's Windows Phone store and BlackBerry World, according to the study by the analyst firm Canalys.

Combined, the four app stores brought in about $2.2 billion in the quarter from app sales, in-app purchases and subscriptions, meaning Apple made about $1.63 billion of the lump sum.

http://www.cnbc.com/id/100624212

post #17 of 29
Quote:
Originally Posted by jmegapac View Post

 

 

In the first quarter, the iPhone maker accounted for 74 percent of the total revenue generated by the four leading app stores—which also include Google Play store, Microsoft's Windows Phone store and BlackBerry World, according to the study by the analyst firm Canalys.

Combined, the four app stores brought in about $2.2 billion in the quarter from app sales, in-app purchases and subscriptions, meaning Apple made about $1.63 billion of the lump sum.

http://www.cnbc.com/id/100624212

 

So, in other words. Apple and Apple developers are raking in the overwhelming majority of the profits, while all of the other peasants are fighting over the few bread crumbs that are left.

post #18 of 29
At least we finally have a report from Canalys we can trust instead of those smartphone projections where they obviously don't have a clue.1wink.gif
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post #19 of 29
I don't buy these figures. If Windows, Blackberry and other apps are in this mix, the figures would definitely be off.

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post #20 of 29
Quote:
Originally Posted by battlescarred1 View Post

I have to say, there just isn't much interesting news coming from Apple Insider these days. Reporting the news use to be so much better. Reporters had good sources, they would really work their sources and get THE story. Either Apple has really tightened the screws on leaks or the reporting has become so mediocre. It's been several months and we really haven't heard anything concrete concerning iOS, Mac Pro update, or any other interesting information on something new that might be happening within Apple.

 

It has definitely gone down hill of late, but still the best Apple news source IMO. Mac Rumors is a joke and full of morons, 9to5 I like but pretty amateurish and the rest are irritating in their own ways too.

post #21 of 29
Quote:
Originally Posted by monstrosity View Post

 

It has definitely gone down hill of late, but still the best Apple news source IMO. Mac Rumors is a joke and full of morons, 9to5 I like but pretty amateurish and the rest are irritating in their own ways too.

Yeah, no place is perfect, but I prefer this place over the other ones. The last time I checked in on MacRumors, I started reading the comments and got really pissed off in less than 60 seconds, so I quickly closed my browser. That place is just crawling with fandroids and Apple haters.

post #22 of 29
Quote:
Originally Posted by Peter Cranstone View Post

The only question is - what is a 'living'. 

A second thought - if 20% are making a living then what is the percentage that are building a sustainable business via the App store. My guess is about Zero. And herein lies the problem - Apple extracts ALL of the profits and leaves nothing for anyone else. This is neither sustainable for Apple or for the developer ecosystem. You cannot build a business off of Apple, but you can build a business off of Microsoft. 

At some point Apple will have to return the profits to the ecosystem or think up a new screen to entice users to buy. So far there is no compelling financial reason to be an Apple developer.

It's a case of Apple winning the battle, but losing the war. Balmer was right - eventually it boils down to developers being able to build a sustainable business. Apple hasn't met that metric.

Yet.

If 20% are making a living, I'd call that a sustainable business. Might be a business of one, but it's a business.

The majority of app developers in any store aren't going to be able to make a living. The Internet facilitates more glut. How many word processors do we need? Before easy and cheap distribution, you had few titles to choose from. Today there are hundreds of apps that all do the same thing in pretty much every category. Only a few will be popular.

I bet game developers are the majority of those making a living from apps. Always something new to buy, not just a "better" or "different" take on the word processor.
post #23 of 29

Then how about you answer the question - what sustainable business can you point to that is built on iOS app?

 

Sure Wells Fargo can employ someone to create an app for free and then use that as part of the WF service. That's irrelevant to the question I posed. Out of the million apps on the app store how many are generating 'measurable, sustainable, profitable revenue from volume'? 

 

Find just one that generates enough revenue to support 10 programmers? When you've found one, find 10 more. Surely out of a million apps there must be a profitable company behind them?

 

The only people making money from the app store is Apple. The rest just drives hardware sales. There are no 5 year mobile app business models being built on iOS - just ask the VC's. It's all moving to the Enterprise and services which scale across multiple screens.

 

Welcome back to the web.

post #24 of 29
Quote:
Originally Posted by Peter Cranstone View Post

Then how about you answer the question - what sustainable business can you point to that is built on iOS app?

Sure Wells Fargo can employ someone to create an app for free and then use that as part of the WF service. That's irrelevant to the question I posed. Out of the million apps on the app store how many are generating 'measurable, sustainable, profitable revenue from volume'? 

Find just one that generates enough revenue to support 10 programmers? When you've found one, find 10 more. Surely out of a million apps there must be a profitable company behind them?

The only people making money from the app store is Apple. The rest just drives hardware sales. There are no 5 year mobile app business models being built on iOS - just ask the VC's. It's all moving to the Enterprise and services which scale across multiple screens.

Welcome back to the web.

I use a number of apps from small developers who employ at least a few people each. Omni, IGG, NoThirst, Cultured Code all come to mind. The success of various game developers on iOS has also been well documented.
post #25 of 29
Quote:
Originally Posted by Peter Cranstone View Post

Then how about you answer the question - what sustainable business can you point to that is built on iOS app?

 

Sure Wells Fargo can employ someone to create an app for free and then use that as part of the WF service. That's irrelevant to the question I posed. Out of the million apps on the app store how many are generating 'measurable, sustainable, profitable revenue from volume'? 

 

Find just one that generates enough revenue to support 10 programmers? When you've found one, find 10 more. Surely out of a million apps there must be a profitable company behind them?

 

The only people making money from the app store is Apple. The rest just drives hardware sales. There are no 5 year mobile app business models being built on iOS - just ask the VC's. It's all moving to the Enterprise and services which scale across multiple screens.

 

Welcome back to the web.

 

Why should people answer the questions of a useless troll who creates a new account and posts nothing but garbage? You clearly have no idea what you're talking about and are simply trying to start $hit.

 

Another loser to add to the block list, and it only took you 4 posts to get there.

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post #26 of 29
Quote:
Originally Posted by Peter Cranstone View Post

A thought.

 

How about an analysis of the exact number of mobile app developers, the average sale price and the yearly revenue generated by the app. With a million apps and an average payout of $7 billion a year that equates to $7,000 per developer if there were a million developers which their aren't. So i'd guess that the average amount a mobile app developer makes a year to be about $20k. Right around minimum wage.

 

App development is a gold rush. If you're talented or lucky then you can strike it rich. Most companies are lucky to break even though.

 

Selling spades and tents is where the reliable income is. :)

post #27 of 29
Quote:
Originally Posted by Peter Cranstone View Post

Then how about you answer the question - what sustainable business can you point to that is built on iOS app?

Sure Wells Fargo can employ someone to create an app for free and then use that as part of the WF service. That's irrelevant to the question I posed. Out of the million apps on the app store how many are generating 'measurable, sustainable, profitable revenue from volume'? 

Find just one that generates enough revenue to support 10 programmers? When you've found one, find 10 more. Surely out of a million apps there must be a profitable company behind them?

The only people making money from the app store is Apple. The rest just drives hardware sales. There are no 5 year mobile app business models being built on iOS - just ask the VC's. It's all moving to the Enterprise and services which scale across multiple screens.

Welcome back to the web.
1) You act as if a "make iOS app = print $$$" is a logical measuring stick of a new business category which is kinda misguided.
2) developers large and small still have to think about and implement decent marketing to make money like any other company
3) you might want to also look at freemium apps which would be a revenue stream for developers not taken into account
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post #28 of 29
Quote:
Originally Posted by Peter Cranstone View Post

Then how about you answer the question - what sustainable business can you point to that is built on iOS app?

 

 

 

Rovio, the Angry Birds franchise.

 

"WHO WE ARE

Rovio Entertainment, founded in 2003, is an industry-changing entertainment media company and creator of the globally successful Angry Birds franchise. Angry Birds, a casual puzzle game, became an international phenomenon within a few months of its release and is now the number one paid app of all time. Rovio has launched eight blockbuster games so far for different platforms: Angry Birds, Angry Birds Seasons, Angry Birds Rio, Angry Birds Space, Angry Birds Friends, Amazing Alex, Bad Piggies and Angry Birds Star Wars.

Following this success in mobile gaming, Angry Birds has expanded rapidly in entertainment, publishing, and licensing to become a beloved international brand. Rovio has grown alongside Angry Birds, and the multifaceted entertainment house currently employs more than 500 professionals in its headquarters in Espoo, Finland, and offices in Tampere, the United States, China, and Sweden.

Rovio’s reach extends far beyond Finnish borders, with current employees representing more than 30 nationalities. As a rapidly growing company with plenty of opportunities for go-getters, the company is especially attractive to young people who are ready to show their mettle. Rovio regularly brings new talent to the field through training programs, partly in cooperation with universities. 
 

Rovio has created a world-class entertainment industry in Finland and turned it into a significant local employer. With an open organizational culture that welcomes new ideas and suggestions for improvements at all levels, Rovio is constantly looking to innovate and grow along with its employees."

 

Firemint - go Australia!

 

"About Firemint

Firemint is a Melbourne, Australia-based studio of almost 60 people dedicated to making truly great games. Best known for worldwide hits Flight Control and Real Racingon iPhone and iPad, Firemint was founded by Rob Murray in 1999 and developed over 30 games on commission from publishers before switching to self-publishing original titles.

 

Flight Control

The release of Flight Control on March 5, 2009 spearheaded the company’s rise to prominence as an internationally-recognised independent developer. Flight Control’s intuitive touchscreen controls, appealing visuals and addictive gameplay saw it ascend the sales charts and become one of the most successful iPhone games ever, with over 4 million sales to date. It is now available on a number of platformsincluded iPad, PC, Mac OS X, DSiWare, Android and PlayStation 3."

 

...and a few more.

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post #29 of 29
Quote:
Originally Posted by Peter Cranstone View Post

The only question is - what is a 'living'. 

 

A second thought - if 20% are making a living then what is the percentage that are building a sustainable business via the App store. My guess is about Zero. And herein lies the problem - Apple extracts ALL of the profits and leaves nothing for anyone else. This is neither sustainable for Apple or for the developer ecosystem. You cannot build a business off of Apple, but you can build a business off of Microsoft. 

 

At some point Apple will have to return the profits to the ecosystem or think up a new screen to entice users to buy. So far there is no compelling financial reason to be an Apple developer.

 

It's a case of Apple winning the battle, but losing the war. Balmer was right - eventually it boils down to developers being able to build a sustainable business. Apple hasn't met that metric.

 

Yet.

 

The app business is a bit like the website business where

 

1) Most websites don't make money - but work as promotion, or as a service to the customer.

2) Some make loads of money.

 

and the bedroom developer is not really the way to look at it. Most people work for businesses.

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