Search
My name is Kenneth and I write cool Mac and iPhone software. This is my personal weblog where I post about stuff I find interesting. I usually write about Mac development, the business of shareware and the Mac community in general.
read more →When one hears stories from iPhone developers, they’re either from the lucky ones who made insane amounts of money and laugh all the way to the bank, or rather from disappointed developers who consider their efforts a failure.
The latter tend to blame the App Store for the failure of their application(s). Granted, the App Store is a harsh market which has both its advantages and its flaws. But, in my humble opinion, a good craftsman never blames his tools.
The App Store has trends that can be analyzed, and if you’re going to be developing for the iPhone, you need to learn how to adapt. I have learnt this first-hand through experimentation, and have learnt many valuable lessons along the way.
Last September, while working on a much bigger iPhone game, I thought it would be cool to create a quick one-trick application for viewing jokes. I never envisioned that iLaugh would become my most lucrative app that would keep me going while I develop the aforementioned game.
The Y-Axis shows daily revenue in US dollars.
Let’s leave the end of the graph (Feb-Apr) aside for a minute, we’ll get back to it.
You can see the initial release spikes, typical of the App Store, and then a very depressing downwards trend right after release. For the second release, 1.1, I upped the price from $0.99 to $1.99. Which slightly lowered the initial spike revenue. But at that stage, I had a much more mature app which unfortunately, due to lack of effective marketing stagnated at a sub-$20 daily revenue.
But in February, I made pretty much the best decision I have ever made. That, of course, was to release a Lite version. I initially thought it would be a nearly cost-free way to get some free advertising for the premium version. The main reason I put ads inside the Lite version was actually not to create revenue, but rather to give users a reason to upgrade. But, other than that, the Lite version was an identical, fully functional copy of the premium version.
As you can see, it did a pretty decent job of advertising the premium version. Since the mid-Feb release of iLaugh Lite, daily revenue for iLaugh has been much higher than it previously was.
Fortunately, iLaugh Lite became quite popular on the iTunes App Store, and while never entering the global top 100, it has charted as high as #29 on the Entertainment chart, and has been in the top 40 entertainment apps nearly since its release.
While this did have some unexpected consequences, like bringing my entire server down due to excessive traffic which brought the iLaugh service down and forced me to upgrade to a better server, the benefits were pretty clear.
This graph shows daily iLaugh Lite downloads.
This equates to about 100,000 monthly downloads.
Here’s a graph that shows the web-service traffic this generates (since each joke is fetched from my server, this gives me a pretty good overview of the actual usage of the app). Unfortunately, I only started using this particular analytics package on March 2nd, so that’s when the graph starts.
To date, iLaugh has served over 6 million jokes, and it’s going at about one million per week.
So far I left out one pretty important thing: ad revenue. But one always leaves the best for last, right? So here goes:
As the installed user-base for iLaugh Lite grows, so does daily ad revenue. Currently, I’m seeing pretty good numbers. I have around 6 million monthly ad impressions, and as you can see in the above graph, I’m seeing around $100 daily ad revenue.
While these aren’t mind-shattering numbers, I think they give a pretty good overview of what one can achieve as an average developer for the iPhone platform.
This entry was posted on Wednesday, April 8th, 2009 at 10:28 pm and is filed under Articles, Business, Cocoa, English, iPhone. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
1 Comment 
3 Comments 
10 Tweets 
11 Comments 
3 Other Comments
Add your thoughts!
Finally, a balanced article on iPhone development. Great point about good craftsmen not blaming their tools. The App Store is the best thing that ever happened to indie developers. Unfortunately, many developers don’t understand what non-software engineers do on their phones, and don’t understand basic economics.
I am VERY interested in finding out who you are getting your ad revenue from? what would you suggest to get started? Can you email me with such info?
Thanks in advance,
Daniel Monroe danielm@logictwilight.com
Congrats ! If you can provide the answers for these questions it would be great.
1. Who is your ad provider ?
2. Are you doing CPC or CPM ads ?
3. What is your Click Through Rate ?
still, this is sad. 36k a year.Just open a coffee shop, and you will make a lot more.
This comment was originally posted on Hacker News
[…] Article Count placed an observative post today on Growing iPhone Development into a Viable Business (~$100/day with…Here’s a quick excerptComments… […]
[…] Marketmeeting - Online market for businesses and professionals put an intriguing blog post on Growing iPhone Development into a Viable Business (~$100/day withHere’s a quick excerptComments… […]
And you have to work a lot more, consider this, invest ~40 hours in a simple application and get $100 a day for it. Sounds better than juggling with coffeebeans and latte macchiato’s every day.
This comment was originally posted on Hacker News
And you have to work a lot more, consider this, invest ~40 hours in a simple application and get $100 a day for it. Sounds better than coffeebeans and latte macchiato’s.
This comment was originally posted on Hacker News
[…] barticz: wrzuci? link na Flakera przez Jabbera/GTalka przed chwil? `Growing iPhone Development Into A Viable Business` - dobry, zbalansowany case seoxys.com/…one-development-into-a-vi… […]
Why not make $100+/hour as a contractor writing iPhone apps for people with "a really good idea"?
This comment was originally posted on Hacker News
Nice write-up, Kenneth. It’s always interesting when developers are transparent with their numbers.
I’m happy if it is sustainable for him, but it relies on a) continued downloads and b) advertisers continuing to be willing to pay $0.70 CPMs for advertising in joke apps to iPhone users who are demonstrably unwilling to pay $0.99 for things.But yeah, there is no magic like having already written code. All additional work you do (marketing, new versions, SEO, etc) acts as a force multiplier for all the work you’ve already done. It’s capitalism at its finest (since you’re leveraging intellectual capital).
Plus you can always play the "Hey, if I can write one application and make $100 a day, and the application doesn’t take the majority of my time to maintain or support… couldn’t I write two applications and make $200 a day?" game.
This comment was originally posted on Hacker News
For one, you have to work an hour. Often, several, right in a row. When other people want you to.
This comment was originally posted on Hacker News
Doubling traffic, and thus revenue in a webapp, is a simple matter (If you can get people to come use it). You might not even need to spend any extra money on servers or bandwidth.How well does a coffee shop scale? Not so well. Space in the real world, is not free. Space on the internet is essentially free.
You also seem to have assumed that a graph that has grown from 0 to 100 in 2 months, is now going to stop growing and stay at 100 for a year.
Off topic: Love the about: "mobile is the future" in your profile.
This comment was originally posted on Hacker News
Doubling traffic, and thus revenue in a webapp, is a simple matter (If you can get people to come use it). You might not even need to spend any extra money on servers or bandwidth.How well does a coffee shop scale? Not so well. Space in the real world, is not free. Space on the internet is essentially free.
This comment was originally posted on Hacker News
Far from the classical success stories, this is an encouraging one, no more than that, but certainly not less and definitely realistic.
This comment was originally posted on Digg
Great post - it is interesting to see the stories of people who are building up there business vs the people who are simply hitting the lottery with a popular app. The App Store is a great way to start publishing your own software as a one person or small team shop.
Definitely linking back to this post so my readers can hear your story!
[…] I saw this excellent article by iPhone developer Kenneth Ballenegger where he describes his iPhone […]
An interesting writeup… what do you use for the ads? AdMob?
@John Casasanta: hey there ;)
Very cool article. I had no idea that such great revenue was possible for an iPhone app. I’m learning Cocoa right now, and after I’m a bit more learned and experienced, I may try my hand at iPhone development (after I get an iPhone or an iPod Touch, that is).
Thanks for posting a "middle of the road" kind of story like this. I have found all the stories from the extremes of iPhone app revenue curve to be almost completely useless in understanding how to grind out a reasonably profitable app.
This comment was originally posted on Hacker News
Yeah, it’s also not bad supplemental income if he’s got a "day job". He’s easily offset the purchase of the iPhone, developer account, and maybe even computer. On top of that, he has an extremely valuable research project feeding him data on the app store and his users. He’s learned some lessons that I’m sure will help smooth the release of his future more ambitious (and hopefully lucrative) work. I’ll bet his game will have a "lite" version for sure now, whereas he might otherwise not known how important that can be to drive revenue of the full price version. The app is also quite valuable as a motivator. I know I get discouraged from time to time working on my app thinking that nobody is going to buy it. I’m certain I would have more gusto if I was watching sales numbers from a simple app roll in, even if they were incredibly modest.
This comment was originally posted on Hacker News
Why not do both? When he says it makes "$100 a day," I doubt he means his days are filled with development and heavy effort. As he said, it provides him with a decent stream of money to continue work on his primary project.
This comment was originally posted on Hacker News
Wow, nice article.
I’m studying Cocoa programming for Mac OS X right now, but maybe after I’m more comfortable and experienced, I’ll try my hand at iPhone programming (not to mention, once I get an iPhone or iPod Touch).
I never knew it could be so lucrative.
While $36K a year is nothing to sneeze at, we have to remember that his app is getting 100,000 downloads a month. That’s pretty successful. A lot more successful than I expect from my first app.
This comment was originally posted on Reddit
I could use an extra $36k a year (or whatever after taxes). Damn, time to break out the Objective C book and learn it I suppose. Of course, I have no ideas for apps either so I’m 0 for 2.
This comment was originally posted on Reddit
It’s what’s happening now.
This comment was originally posted on Reddit
Hi, nice article.
Nothing wrong with that though and I like the analytical approach you take. All the best, great story.
However, I think this is not describing the success of an average developer doing consistent work, but it is more another one-hit wonder. There is a lot of evidence going around that a large majority of apps is only used a day or two. So to a certain extent you did enter a lucky spot (and probably not intentional) with a high daily reuse rate which is key to any ad-based revenue.
So don’t get me wrong, great success and you have deserved all of it, what I am saying is that you try to differentiate yourself from those who got lucky in the appstore and to a point I think you actually did get lucky, too
[…] Growing iPhone Development Into A Viable Business | seoxys.com (tags: iphone business) […]
A lot of you are sort of throwing around ideas as to whether or not the revenue made from this app is worth the time spent. Keep in mind that Kenneth hasn’t even entered college yet, and at the time he released the original iLaugh, he was still in high school. Maybe this isn’t as ambitious as projects pursued by Phill Ryu, but I still think it is a huge success.
And regarding arti33’s comment about opening a coffee shop… opening one costs more than a few hundred dollars and requires much more work. In simple terms, that was a silly argument.
RT @KISSmetrics Growing #iPhone Development Into A Viable Business http://bit.ly/JHLPS
This comment was originally posted on Twitter
KISSmetrics: Growing #iPhone Development Into A Viable Business http://bit.ly/JHLPS: KISSmetrics: Growing #iPhon.. http://tinyurl.com/dcwf89
This comment was originally posted on Twitter
[…] Growing iPhone Development Into A Viable Business | seoxys.com - iphone programming […]
RT @georgechen: A realistic case study on how to make money via Ads on the iPhone. http://tinyurl.com/cocuk7
This comment was originally posted on Twitter
[…] Growing iPhone Development Into A Viable Business | seoxys.com (tags: iphone business) […]
nice writeup of iphone business by kenneth: http://tinyurl.com/cocuk7
This comment was originally posted on Twitter
How much do you think a brand new free app with ads can make per day just starting out?
If you have any specific question you’d like answered, your best bet is to contact me by email at kenneth@ballenegger.com.
[…] Country board placed an interesting blog post on Growing iPhone Development Into A Viable BusinessHere’s a brief overviewWhen one hears stories from iPhone developers … Store, and then a very depressing downwards trend right after release. For the second release,… […]
@keyvisuals How I was doing with AdMob a while ago: http://tinyurl.com/cocuk7
This comment was originally posted on Twitter
@BoltClock http://www.seoxys.com/growing-iphone-development-into-a-viable-business/
This comment was originally posted on Twitter
Growing iPhone Development Into A Viable Business | seoxys.com: http://tr.im/jMs3
This comment was originally posted on Twitter
interesting experiences from iPhone app business http://tinyurl.com/cocuk7
This comment was originally posted on Twitter
I mostly agree with you. Working on the appstore is like working in real life. Heck, some people can even make money selling coffee cups but it doesn’t happen overnight. Like any business it requires hard work.
From my own experience, the success of an app isn’t always tied directly to the work you put in it. Some of my apps required more work than others but brought little benefit. For example my Fearless Brain game, which is pretty simple but still took some days to build and has its own website, is definitely a total flop (as in 0-2 sales a day now and max 10-15 a day upon launch). One could argue that if the game was more elaborate it could sell more, but it could also be additional wasted time. It’s always hard to know if you should be betting more or stop the losses. I ended up making it available for free (with only one additional ad but keeping full functionality). The ads on the free version also get me a buck or two a day (for a rather low total of 6k free downloads).
The most valuable thing I got from this app is the enjoyment to see how some players from Asia have an suprisingly good memory and a will to beat their own score which never ceases to amaze me.
But at that rate that app will basically never get me back the virtual money I have put in it (a few evenings of hard work coding and designing the app and the website).
I have been writing several apps during my free time (as seen on smallte.ch), all intentionnally rather simple because I didn’t want to waste 20k worth of developement on any project while I didn’t have any experience with the possible returns, not to mention it’s better while learning an API not to start with a huge project since once is bound to make mistakes.
So far my experience has been similar to yours, sadly with lower numbers however. I have found also that advertising is much more sustainable than sales in the long run. That said avertising of course is only viable for apps that get used on a daily/weekly basis. With all my apps I now get about 20-25$ a day from advertising, most coming from apps that require daily usage or at least regular usage. Anyway 20$ is about twice what I now get from constantly declining sales (most coming from my Convert Any app). This top selling app has now brought 1784$ total since its launch in December. It’s still less than the virtual amount it cost to develop originally and sales are just getting lower and lower everyday. Ad revenue on admob on the other hand has been steadily increasing.
iLaugh lite is great in terms of advertising because it has a recurring usage, much like a weather application. If you want to go for advertising try to pick a subject with changing information to which people will come back every day.
Another thing about advertising is that you never know which one will have a high click rate. For some reasons one of my apps gets a click rate of around 4% while another gets about 0.5%. As a result one of them is viable even though it has less traffic than the other.
This comment was originally posted on http://www.seoxys.com/)">seoxys.com
Growing iPhone Development Into A Viable Business | seoxys.com > http://tinyurl.com/cocuk7
This comment was originally posted on Twitter
Hi Kenneth, good to hear such an optimistic (but down to earth) view, coming from a real developer.
I am a developer too. I’m wondering what kind of advertising did you do? (when you talked about the Marketing team and outsourcing it).
This comment was originally posted on http://www.seoxys.com/)">seoxys.com
delicious50 : Growing iPhone Development Into A Viable Business | seoxys.com http://bit.ly/f4aNE business iphone
This comment was originally posted on Twitter
Have something to say?
Additional comments powered by BackType