Submitted by survey from market research firm VisionMobile, there are 2.9 million app developers in the world who have built about two million apps. Most of those app developers are making next to nothing in revenue while the very top of the market make nearly all the profits. Essentially, the app economy has become a mirror of Wall Street.
The application store model was a good thing for a while, especially early on. Now, though, it’s becoming an impediment. Supply has increased so much that it’s impossible to stand out, especially now that a relatively small number of big players are utterly dominating the listings, drowning out everyone else.
If nobody does anything, this will only get worse.
I was totally baffled by this news heading and thought it was about some Asian company who no longer had middle classed developers…
Haha, I have failed to proofread the title – bows head in shame.
The app store is an impediment? How exactly? The app store infrastructure allows anyone to create apps without worrying about the distribution and monetization aspects. Why do you think there are 2 million apps? Because the barrier to entry is low.
Of course only a small percentage are good and a smaller percentage are commercially successful. That has nothing to do with the App Store model.
As for big players dominating listings, they only do that because they make the apps people want. Nothing is stopping a little developer from making a #1 app, it’s just less likely.
Edited 2014-07-25 22:58 UTC
leos,
I actually agree that the the app store model didn’t cause this imbalance, it only seemed to accelerate the trends that already take place in most markets. It becomes increasingly difficult to overtake incumbents once a market reaches maturity. It’s like a game of monopoly that never resets, there are tons of opportunities in the beginning, but people joining in the middle of a game are going to be impeded by the imbalances against them, the same phenomenon occurs in reality.
The former U.S. Secretary of Labor Robert Reich made an excellent lecture about the root causes market imbalances, that the top gets increasing pieces of the pie at the expense of everyone else who’s slivers are shrinking, which is undeniably the case here.
https://www.youtube.com/watch?v=QCu-XnVxhfk
While he wasn’t talking about app stores per say, his analysis seems remarkably applicable anyways. It is a long video, but very insightful if you have time to watch it.
Not really seeing how such a thing could ever be avoided. If you try to do something for which there are already two dozen solutions on the market, with most being better than yours, then of course you’re probably going to fail.
I saw a blog from one developer, who lamented that his Do Not Disturb Android app failed in rather dramatic fashion in the Play store. Of course, he readily admitted that he never bothered to check and see that the Play store is already full of them. Not only that, but his app was rather sub-par to begin with.
WorknMan,
Yes, this was one of Robert Reich’s main points, with globalization the result is many products becoming redundant, what tends to happen in this case is the bigger vendors grow and consolidate while the smaller ones become nonviable and go under.
In one way, it’s a prime example of Darwin’s theory of evolution – survival of the fittest. Those who don’t survive don’t deserve to stay, to put it ruthlessly.
However if it is true that 69% of app developers are at the “app poverty line”, then we have a huge problem on our hands. The US has been gambling on the tech sector to offset all the jobs and manufacturing we’ve lost over the years. Government’s stance on job loss is that the best way to shore up the middle class is to push increasing numbers of us into tech, our policy has been driven by this theory for the past decade now (championed by Robert Reich himself, how do you like that for irony). Yet if you believe VisionMobile’s State of the Developer Nation numbers, then it may be unlikely that the tech sector can support a healthy middle class either.
Should we just accept this as the way it is? Is the middle class obsolete now?
If you mean unskilled middle class, yes I think that’s pretty much done. If your job basically consists of working on an assembly line and it hasn’t been taken by somebody in a 3rd world shithole, it’ll be taken by a robot soon enough. The manufacturing jobs are gone, and I doubt they’re ever coming back. Long gone are the days where you worked for a company for 30-40 years, and they took care of you after you retired. It just ain’t happening anymore. I’m not making any sort of commentary on whether that’s good or bad; just stating the way it is.
So if you don’t have any skills that are valuable in the marketplace, you’d better be spending the majority of your free time working on that. Otherwise, you’re gonna live on a steady diet of Ramen for the rest of your life. And if you’re smart, you’ll find a way to bring valuable to people that currently isn’t being fulfilled by anyone else. And if we’re at a point where this just isn’t possible anymore and all the skilled jobs dry up, then I guess we’re boned.
WorknMan,
No, actually I don’t mean unskilled. The article reveals that even skilled developers are experiencing this, with close to damn near everything going to the very top, while the rest are working for peanuts. There’s a risk of overgeneralizing these statistics to developers too broadly, and clearly not all job functions are this bad yet. However with the unstoppable trend towards globalization and consolidation, that’s where it seems we are headed – these central app store models give us a glimpse into the end game. The technology field will mature and becomes more efficient, consolidation will be extremely profitable, but only for those at the top.
Same here. In the past there was always something new on the horizon to take the place of the jobs we were loosing, but if we loose the high tech sector, what comes next? I’ll concede that maybe one of the reasons I’m more concerned now is because this time it involves me personally, whereas I was never directly affected by the loss of other industries.
Edited 2014-07-26 15:53 UTC
I think there is still room for developers to make quite a bit of money, assuming they’re creative and know how to think outside the box. Wasn’t it just a few months ago that some 15yo kid sold his app to Yahoo for like $30 million? But if you’re betting it all on your new fart app making you a fortune, I’ll probably see you in the bread line eventually.
Honestly, I’m not sure. If nothing else comes along and the economy completely tanks for this reason, I think we’ll end up switching to another economic model; probably some sort of hybrid between capitalism and socialism. I’m hoping I’m not still alive when this transition takes place.
Edited 2014-07-26 18:22 UTC
WorknMan,
I’m not sure which app/developer you are referring to here, but even without knowing the circumstances isn’t it just an example of the excesses we’re talking about. Regardless of the distribution, someone still has to be at the top of it and I don’t think age has much to do with it (ie Gates, Zuckerberg, Jobs, etc).
I do understand why people are reluctant to accept socialism and expansion of government power, but the irony of all this is that the need for socialism is driven by those at the top who feel entitled to take home millions “winner takes all” style, while blaming everyone else for not being able to make it, even though there’s no money left. Today our GDP is as good as ever, but most of it is just not being distributed outside of the top.
In other words, if not for greed, then there wouldn’t really be much need for the big government/socialist programs that are so controversial. The socialist movement was caused by those who most oppose it.
Edited 2014-07-26 20:36 UTC
So what is stopping everyone who believes this from pulling their money together to helping those at the bottom end of the economy? I hear this shit all the time… the world would be rosy if all those evil rich people would give up some of what they had to help these poor, unfortunate souls who were just dealt a bad hand and are in a rough situation through no fault of their own.
Personally, I think the situation is a lot more nuanced than that, but I’m sure those of you who are heartbroken over the plight of the poor have enough money cumulatively to feed and house these people for decades, and probably provide them education too. So, why don’t you? Hell, start up a kickstarter and I might even pitch in a little.
The reason why you don’t do it is for the same reason rich people don’t do it… greed. Socialism always seems like a good idea when it involves somebody else’s money …
Of course, I think we may be forced into it eventually by, as you say, not enough high-paying jobs to go around. But there would still be work to be done, and there’d half to be an incentive to get lazy bastards like me off our asses to help out. I mean, we’re not totally automated yet, so… what happens when your toilet overflows and there’s turds floating down the hall? Unless your an expert at plumbing and replacing the carpet, somebody’s gonna have to come do that job, and I’m sure as hell not going to volunteer, even if I had the skills.
Edited 2014-07-27 05:27 UTC
WorknMan,
The middle class doesn’t need handouts, the problem is that we’re so poorly represented in spheres of influence that we’ve become expendable. If you want my opinion, I think employees should be entitled to some voting rights in their company. It shouldn’t be acceptable that voting be a privilege for the wealthy.
Companies wouldn’t be so eager to offshore their workforce if employees were represented amongst the shareholders, but as it stands something like 2/3s of corporate shares are owned by the top 1%, who have very little in common with the middle class.
Macro-economically, companies need the middle class to buy their products, and they need to pay the middle class in the form of wages to complete a sustainable cycle. What’s been happening is that companies have become so proficient at cutting costs and using fewer workers (thanks to technology, consolidations, offshoring, long work hours, etc) that the overall amount of money being transferred back into to the middle class is less than what’s necessary to sustain it. This is why the middle class is disappearing.
The corporate surpluses get distributed to billion dollar accounts, executive bonuses, and also to shareholders (at a 15% capital gains tax rate, reduced significantly over the years to even less than what employee are taxed).
Well, the middle class obviously doesn’t have the money to restore the middle class. In any case do you honestly think those who are sitting on money will offer enough to make a significant difference and continue to do so? I think solving the distribution problem would be both more appropriate and more effective than relying on these kinds of voluntarily handouts.
Erm, no, I don’t know where you get the impression I’ve got money to give? It’s a struggle to get contracts to stay afloat, but I did just get referred to another potential client this week!
I think you may be confusing two different things.
One is a metaphor of ‘middle class’ which is being used to describe the segmentation of the app developer community. This community is very small and a tiny fraction of the general population. The app economy is a tiny part of the over all economy.
The other is the term middle class which is used to describe a large segment of the general population.
I think defined at it’s largest extent the global app economy is probably under $150 billion a year. To put that in context the the GDP of the US is $15.68 trillion, the GDP of China is $8.3 trillion and the GDP of Germany is 3.4 trillion.
Even if the stratification of the small app developer community persists and deepens the disappearance of the app developer middle class will have almost no effect on the fate of the far vaster general middle class because the weight of the app economy in the general economy is so trivial.
Tony Swash,
Yes, the term “middle class” is being used in two contexts, the comparison was actually intentional in the article as well as my post. When I said “Government’s stance on job loss is that the best way to shore up the middle class is to push increasing numbers of us into tech”, perhaps it should have been made more explicit that this referred to the economic middle class and not the app store middle class, but I kind of assumed that it didn’t need an explanation.
I think you kind of missed my point, maybe because I didn’t state it well enough. It’s well recognized that the middle class in the general population is suffering today. Many see tech jobs as the answer, after all, those are growing the fastest:
http://www.businessnewsdaily.com/5445-tech-jobs-growing-fast.html
So it’s easy to see why “tech jobs” are so attractive as the answer to our jobs problem; iOS and Android are specifically in the top 10 positions of job growth for the entire economy. And yet, if 69% of these developers make so little they’re considered to be in app poverty, then this state of affairs bodes horribly for the middle class economy.
Note that I’m not suggesting any causation here, I agree with you that the app store stratification isn’t responsible for the middle class problems, yet if the best job opportunities we have are this anemic, then we’re in trouble.
So it’s easy to see why “tech jobs” are so attractive as the answer to our jobs problem; iOS and Android are specifically in the top 10 positions of job growth for the entire economy. And yet, if 69% of these developers make so little they’re considered to be in app poverty, then this state of affairs bodes horribly for the middle class economy.
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The article isn’t talking about tech jobs, but about people going indie on the various app stores, which is a totally different animal.
Personally, I make a decent living out of Android development. You’ll never see me on the app store though, you’ll see the companies i contract for.
torp,
The source does not indicate anything about restricting the scope of the survey to “indie developers”, I don’t think they did.
“Indie” doesn’t necessarily mean you are an individual, if your company doesn’t use a publisher, then it means that you are indie too. For example, this list of 2012 indie games shows some hugely successful titles including Far Cry 3, XCOM: Enemy Unknown, Borderlands 2, Dishonored, and The Walking Dead.
http://www.wired.com/2012/12/the-10-best-games-of-2012/?pid=3198
For all we know, your company might have been included in the survey too
Never the less, I don’t want to dismiss your post over semantics, you’ve brought up a valid point, and maybe the results have selection bias. These are questions we’d have to ask the report’s author, since I obviously can’t answer them.
I read both the summary and the report as talking about the money brought by an app in the app stores, either via sales or ads. You don’t care about those numbers when you’re hourly/salary, only when you’re the one who put it in the app store. To pick an example from gaming, it looks like they talk about what Firaxis made out of the xcom for tablets sales, not how much they pay their employees
Edit: dammit, I’ll never get quoting right in these tiny boxes.
Edited 2014-07-27 08:02 UTC
torp,
Yes agreed, I don’t think “app developer” strictly refers to individuals, a company can be an app developer too. Never the less, the app sales must be big enough to cover salaries at a minimum, otherwise the company is taking a loss and that’s not really sustainable unless the appstore work is being subsidized by something else.
FYI Darwin never claimed any of the sort. “Survival of the fittest,” besides being a tautology of sorts, was a term coined by a political scientist named Herbert Spencer who grossly misunderstood and misrepresented the mechanisms of natural selection in evolutionary theory.
Edited 2014-07-27 03:20 UTC
It isn’t a problem with the model, its doing exactly what everyone wanted it to – it has reduced the barrier of entry to practically zero.
Once that happens in any kind of market, when you create an environment where risk is low but potential reward is high – you are always going to get mountains and mountains of crap products and only a handful will float to the top and reap all the profits.
Why? Because the smart producer’s in such a market will react by increasing investment in order to make better products – “better” being whatever sells. They want to spend money to do this – any strategy that converts investment capitol to sales will be explored, because it limits their competition to only other producer’s that have similar resources. In other words a market with little barriers of entry will eventually evolve some.
Look at the PC game market. There are only a few game studios left, they all spend wads of cash to make games. There are of course independents and hobbyist that are successful, but they are few in number and tend to market themselves as craftsman to a degree.
What you don’t see is thousands of failed endeavors. Why? Its not because of any real barriers of entry, its because the same process that is happening in the app stores has already played itself out in the PC game market. Developers who don’t really have their shit together don’t bother, because they know the chance of success is slim to none unless you are willing to spend lots and lots of money.
This is going to happen in the app stores too – its happening right now. The problem of huge amounts of crap in the app stores is a self correcting phenomena – all the crap will disappear once developers get a dose of reality. All you will have left is AAA titles and a handful of craftsman like endeavors in due time.
Then everyone will complain about the barrier of entry being too high again…
I think the real reason things are like this is that there is only so much you can do with a mobile app. They just aren’t as complicated as say writing OpenOffice or OpenGL. Except for games, but even that is being comoditized by groups writing the engines so others can just slap in the art work and try to sell it. Simple programs, low barrier to entry, draws in all the hopeful wanna-be programmers who probably switched over from web site creation.
Edited 2014-07-26 01:51 UTC
This is caused by the lack of discoverability. The top app is easily to discover they have funds to advertise themselves, and they are in the top lists anyway. But we don’t have a system, which could tell you, that there is an app, you personally could be interested in. This is what ‘Genius’ should do, but it does not. This is what Google promised, but could not implement. The current AI is not smart enough. It’s still an open opportunity. Maybe its an opportunity for Wall Street as well.
In a bizarre twist for a Google product, the search functionality on the Play Store is nearly useless. I’m not sure if this is accidental, or a deliberate move to guide people towards apps Google gets a cut of.
I know what this article is talking of first hand.
I developed an app. Decent quality, people who tried it liked it, it filled a need and was fun. I’ll admit my marketing wasn’t top notch, but I got in newspapers and at least one blog review.
Since then, sales have been minuscule. I’ve tried various things to boost sales, none have worked out or even just worked.
Don’t want to sound like I’m complaining here, I take full responsibility for my app and it’s sales, I just thought people here would appreciate and example case.
App store profitability is all about using botnet downloads to juice your ranking. Google “app store ranking manipulation”.
iTunes, Google Play and the Windows Phone store are all DOMINATED by botnet promoted apps. And don’t think you’ll get anywhere reporting even the most blatant examples. You won’t, I’ve tried, repeatedly.
If you want to make a profit from indie app development, you’re wasting your time unless you’re prepared to shell out $5000+ for fake downloads.
If not, as you’ve discovered to your cost, you’ll never break through the rankings because at least 50% of the top 5…10 ranked apps in any given category is doing it.
It’s cheap, 100% effective and unchecked.
Given the amount of highly ranked dross in all the app stores, anything goes.
What evidence do you have that botnets are being used to pump ratings? I can certainly believe that that’s happening, but how can you know that is what’s happening?
@What evidence do you have that botnets are being used to pump ratings?
Apple have recently announced that they’re going to crack down on this kind of thing (which is itself an admission that it’s going on) and have already completely banned at least one published and all their apps.
If you’ve been publishing in a particular niche/category for a few years you can spot fraudsters easily. It’s the POS apps, that nobody’s heard of, which rocket up the charts with lots of 5-star ratings (bots) and lots of very low ratings (real users).
If you don’t know the niche but apps in that niche mostly have a list of related apps which is very highly correlated with apps in the same niche, the fraudsters are the one’s with a highly atypical list of related apps.
Smart botnet handlers will take steps to create a realistic list of related apps for the app they’re promoting but there’s an app right now that’s ramping up in the category I work in and they’ve obviously slipped up because the related app list contains apps which are a simple word match with the appropriate category but actually not relevant at all. A real user wouldn’t accidentally download the irrelevant matches because they’d notice the discrepancy.
Google for “app store ranking manipulation”.
I’m skeptical these 69% of unpopular developers deserve to be there in the first place. Call me a curmudgeon, but even big expensive software is usually bad. All that solo work I haven’t see probably has a lot of bad too. Maybe even 69% worth…
IMO Things get popular because communities of like-minded people admire said things and then share with other communities. One can’t be expected to advertise and manipulate ones way to popularity. You should be on forums etc offering value to people with your voice and services. Then, if you’re as good as you think you are, your fans will sell you to their communities.
How many of the 69% of unpopular developers are passionate about helping others first? How many of those apps have been updated this month, even if just one small bug fix? Democratization includes the annihilation of people you don’t like, including those who are just in it for the money. Nobody admires those people.
Wealth and popularity beget wealth and popularity. But I’m skeptical most of the people in the app stores deserve either…
It’s not surprising, how many developers are making anything of value? Even those which are making something decent, how much are they charging? $1? $2?
The volumes you need to make that profitable are enormous.
Sell something for desktops or servers though, you’re not charging $1 or $2, it’s likely more like $30, $100, $500.
To make matters worse, smartphone software markets are totally fashion driven. Nobody got Flappy Bird because they thought it was a great game, they got it because they’d read about it on Facebook or something.
Few companies can make those volumes and those are going to be the ones with marketing capability. There will be exceptions, though.
You don’t have the *right* to make money though. I’d like to only write applications for BeOS and Inferno, but the market is not viable, so I go elsewhere. Same for the tablets and smartphones, there is no real viable market for making money unless you’re a big hitter or very lucky. I’d probably rather take my chances buying lottery tickets than try to come up with a big hit on a smartphone.
You cannot build something nobody really needs, then bury it among 100 similar products, put it in a catalog 1-million items long, then expect to charge 3^a`not a pop and get rich.
Just like with everything else, if you want customers to buy a program from you you need to: A) Think of something they will be interested in, and which is relatively unique; this is Marketing. B) Write the program. C) Get the message to consumers that your product is available and is attractive; this is Communications.
You cannot skip both A) and C) and expect any money at all. The Play Store is your friend, it will give you a channel between your product and consumers and your bank account. But it is you who should make an attractive product, and it is you who has to promote it.
Edited 2014-07-28 08:06 UTC