How to Make Money on iPhone Apps
How many times has a friend showed you his or her favorite new iPhone app, and you lamented: Why didn't I think of that?
With total application downloads from Apple's iTunes app store topping three billion, and monthly sales of upwards of $200 million, the marketplace for apps is booming. If you're a designer or programmer, how can you afford not to be creating apps? Well, it's not quite that simple. Apple says it receives between 8,500 and 10,000 application submissions every week. That's a mighty lot of competition, even for experienced game and media designers.
Greg Trefry, a veteran game designer who teaches at New York University's Interactive Telecommunications Program, recently founded Gigantic Mechanic with Mattia Romeo. The partners this year debuted their first app, a location-aware, golf-inspired game called Gigaputt. Trefry says that while the new publishing structure under Apple's purview coupled with a dense marketplace can be intimidating, he's found there's still ample opportunity for designers to carve out a niche for their app.
"There are so many apps out there, it's an extremely crowded market so that the barrier to entry is so low and the barrier to success is so high," he says. "But you're not necessarily aiming to have the biggest game out there, so there's still room to make a business out of it if you're trying to capture a certain audience."
Of course, there's more to making a profitable app than just having a good idea. And lots of the work comes after the design and programming is already done. Here are some tips to helping your app turn a profit.
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Making Money on iPhone Apps: Getting Approved
In a market where everyone wants in on the action, as an app creator, you have two big hurdles. The first is creating an app worthy of a favorable review upon submission to the Apple iTunes App Store. The second is promoting your app so that it breaks through the pack and sells well.
Though there's a lot of negative hype concerning the first hurdle, developers generally say that getting their app approved isn't the struggle it's made out to be. Apple's standards for apps do restrict some racy and pornographic content, and the company excludes apps that, in its view, do not enhance the iPhone experience or that duplicate existing iPhone features. When it comes to fresh, inventive content, however, most apps are readily approved.
Zach Saul, founder of Retronyms, a San Francisco-based app creating company, has been creating apps since the 2008 iTunes App Store launch, in which his popular, 99-cent app Recorder – an audio recorder – was included.
"We haven't had any trouble getting apps approved and included, but our work is very non-controversial, entertaining and fun," he says. "The approval process seems like a confrontational thing, but every time we've had an app rejected, there's been something wrong with it and they've given us a bit of free testing and helped us solve a problem, so it's very helpful."
And despite the fact that thousands of apps are submitted to Apple for approval each week, app creators tell Inc.com that the turnaround time tends to be swift.
"It actually wasn't that bad a process," says Trefry, who learned that Gigaputt was given the thumbs' up after a three-day wait. "You just have to do your contract with them, and it's pretty clear."
Making Money on iPhone Apps: Promoting Your App
After an app has been approved and is listed for sale in the iTunes App Store, your next goal is to get customers to download it. To some extent, this process becomes a chicken-and-egg scenario. Vaulting into a top-selling category is the best way to encourage sales – but you first must have sales to rank highly within a category. Fortunately, the process of gaining exposure isn't completely out of your hands. Apple features new apps daily.
What does it take to win over Apple's support? Good design is important. "As far as we can tell that's based on polish and quality," Saul says. "Make something that's useful and also is nice and polished and looks good, and your chances are vastly increased."
Looking good is a matter of solid design. Enlist a designer to help create the interface a user will experience, as well as the logos and screen shots that will appear on the Apple iTunes App Store. This collateral is the first thing a potential buyer will see, so maximizing its impact is crucial.
Besides design, being polished includes being technically solid. If you are developing the app yourself, you may want to consider bringing on a programmer who is well-versed in Objective-C to help you; though apps can be built using other programming languages, this version of C++ is the standard. You should also be sure to give your app the full battery of beta-testing it needs before you make your submission. An inexpensive way to test it is to distribute it among friends and solicit feedback. Just remember: Without smooth functionality, your app will be dead in the water.
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Making Money on iPhone Apps: Leveraging Your Existing Business
If you already have a business, creating an app – or multiple apps – to enhance your clients' experience can be a tremendous opportunity. Often, a small business is already filling a niche – and can also do so when their client is on the move. Take the case of Yelp, the online review site. Its iPhone app not only provides its standard customer-reviews, but also can tap into GPS to allow a user to find nearby businesses.
So, thinking along the lines of "what do we already do, and how can it be used on the go?" is a great place to start. Look for an area that will be a natural extension, or a macro view of what you do.
When Zillow, a real-estate listing company, built an app, for example, it not only included its standard real-estate listings, but also allowed users to scope out rentals and homes for sale in their immediate geographic area. This feature tapped into casual consumers' desires to learn, say, what their neighbor's condo might be worth – or to take a self-guided real-estate tour. It took off, and now Zillow is selling mobile ads and incorporating social network link-posting – in other words, running a quite profitable app.
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Making Money on iPhone Apps: Think Big or Think Tiny
Some of the most successful apps are the most complex: Location-aware, social-networking-capable apps such as Whrrl, FourSquare or Glympse. And some of the most successful apps are very simple, one-off jokes. It may be that the best app for you is limited in scope.
Simple apps, the kind people whip out at parties to emulate chugging a beer (iBeer) or wielding a light saber (Lightsaber Unleashed), require far less up-front time designing and programming. And if you haven't invested a lot of time into developing a simple app, you can afford to make it inexpensive. In a best-case scenario, with minimal marketing such apps can to go socially viral. Then again, if it doesn't sell, no biggie: just try again.
On the opposite end of the spectrum, complex, multi-faceted apps are born most often out of an existing business or business model, and can require a team of designers working for weeks or months. This model is best for existing websites and businesses that can add value through creating an app. With these, you're going for polish, perfection, and possibly a higher price-point. What's more, complex apps need to be sticky to be effective. That's where marketing comes in.
In the middle ground stand a host of simple-concept games with great graphical interfaces. If you look at the App Store's top 10 sellers for paid apps at any given time, most of them are games. Games that either educate or temporarily amuse, especially ones that anyone from age 4 to an adult can understand and appreciate, are almost always in demand.
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Making Money on iPhone Apps: Flaunt What You've Got
Once your shiny new app is available in the App Store marketplace, visibility is vital to profitability. Getting into the App Store's top 100 – much less top 10 – list is of course the best way to see sales soar. If that's just not happening for you, start small. Build an audience from the ground-up.
"It's not necessarily the day that comes out that it needs to have blockbuster sales," Trefry says. "Think about what audience you're going after, and how that person interacts with their device."
Some key tips:
• Generate pre-release buzz. Have a website up and running before your app even launches. Make sure information is available for any interested parties. Existing social networking you or your company use can be beneficial in generating buzz, too.
• Do your own marketing, or enlist help. Craft a press release, or have all relevant information, including your contact info, available online. Create a list of blogs and websites that might be interested in reviewing your app, and ping them to spark interest. Be casual but informative – confident but never pushy. If being your own PR person sounds like a drag, enlist a tech PR firm that specializes in product releases on a contract basis.
• Plan for tie-ins or cross-app promotion. If you have existing apps, building in promotions for a new product is a simple way to get its name out to customers who already like your work. In-game advertising isn't a quick-fix to boost sales, though; it's more of a way to create a longer tail for your product's sales. Separately, think about other companies who aren't direct competitors you could form a mutually beneficial relationship with once you launch.
• Create an infrastructure that will support momentum and future growth. Consider what will keep customers coming back as well as what will attract new ones. Are there promotional tie-ins or giveaways that can help attract new interest on your website and in the App Store? What level of connectivity with buyers are you expecting and can you maintain? Trefry stays in touch with his app's fans on Twitter and Facebook, and since hearing input from them modified Gigaputt for use on the iPod Touch. "From social games on Facebook to iPhone games, there's no longer the old-school concept of putting it out there and then it's done," he says. "Now it's all about interacting with your fans, and making appropriate updates based on feedback."
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Making Money on iPhone Apps: Entering a Contest or Get in a Festival
This year, New York City invited programmers and developers to dig through their data and create urban apps. Offering $20,000 in prizes, the city hoped to spur technological innovation. For app developers, though, it was a big chance not just for a cash prize, but for exposure. When the prize winners were announced, everyone from politicians to venture capitalists were there taking note.
If you're a member of a tech or academic community, speaking on a panel or holding events in which you can discuss innovation in your field (and in your app) can hone in on your ideal audience. As a bonus, you'll gain clout in the community, and possibly open yourself up to future business opportunities. For example, Saul debuted Retronyms' iPhone game Seek 'n Spell at a New York big-games festival, where he introduced dozens of gamers to his location-based competitive spelling game. This year, he is speaking on a SXSW panel, and regularly hosts meet-up events to play Seek n Spell in San Francisco. "Even just talking about the market and space we're working in gets people excited and creates a market where new people will buy the app," Saul says.
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Making Money on iPhone Apps: Additional Resources
Check out 31 example apps to get your ideas flowing at appsamuck.com.
See a fairly exhaustive guide to making an iPhone app in one month.
iPhone Application Development For Dummies by Neal Goldstein, 2009.
The Business of iPhone App Development: Making and Marketing Apps that Succeed by David Wooldridge and Michael Schneider. Apress, 2010.
Inc.com's additional coverage of the iPhone and app development.
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