Building an iPhone Business: A Look Back to Look Ahead
Elia Freedman, Infinity Softworks

Numbers

  • $222M net to developers in first 9 months of app store
  • .4% of apps are generating 15% of the income
  • Average app makes $3000 (~$300/month)
  • Numbers derived by Elia
  • Pinch Media has a lot of data
  • Mean price = $0.99, Average = $2.65

Infinity Softworks

  • 12 years in business

App Store

  • Great user experience
  • Margins are excellent (70%)
  • Minimizes tech support
  • Play by Apple’s rules
  • Prices are depressed artificially
  • Eliminates many promotion options

Prices

  • 6K @ Free
  • 11K @ 0.99
  • 3.2K @ 1.99
  • 1.7K @ 2.99
  • Impulse -or- buy cheapest?

Promotion

  • Top paid apps
  • appstore search terms
  • Word of mouth
  • Vertical marketing
  • Bloggers

Product Pricing

  • Free, Lite or LE version
    • But free people are not the same as buying people
  • Multiple programs
    • Good way to leverage users across multiple buys
  • Cross platform
    • VERY difficult
  • Add-ons
    • Kindle
    • Subscriptions
  • Real money is on the web and desktop

Summary

  • No easy money in AppStore
  • Highly vertical products can get highest prices
  • Highly horizontal products can sell lots
  • Don’t watch the sales every day
    • Numbers come out at 1:45am!

Discussion

  • Advertising
    • AdMob - click through (when advertising yourself, try to limit click through)
    • Exclusivitiy - all ads are for one company
  • AirSharing
    • 1 million downloads when free
    • $5.99 then $4.99
    • Moving to Pro ($10) / Lite ($?) model
  • Future
    • People who aren’t making a living will move on.