More Data Shows App Development not a Sustainable Business

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By Phi Tran Comment

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App creation is not as lucrative as the top 1 percent of apps would have you think. In fact, most apps are likely to fall below the “app poverty line” with their meager earnings of $500 per app, per month.

This data comes from VisionMobile’s Developer Economics report for Q3 2014. The study encompasses 10,000 developers from 137 countries – an app world made of the “disappearing middle class of app developers.” Terms like “poverty-stricken” and “have-nothings” litter the report like sad economics tales, rather than failed software warnings.

VisionMobile’s “have nothings” are app developers who would like to make money, but make nothing. They account for 24 percent of apps. On the other hand, the “make somethings” – about 23 percent – make less than $100 in revenue each month. The “poverty stricken” 22 percent are earning $100 to $1,000 each month, while “strugglers” who earn $1K-$10K account for 19 percent of app developers.

“The Haves” are the top 12 percent of developers who make more than 10K a month per app. You get the idea:

Only the top 1.6% of developers make more than $500k per app per month and some of those earn tens of millions of dollars every month. Between them they earn multiples of all the other developers combined. The next 2%, earning between $100k and $500k collectively make more money than the remaining 96.4%. Less than 4% of developers who earn between $25k and $100k again make more than everyone earning less than them combined. Finally just under 5% of developers who earn between $10k and $25k make almost as much as the 88% of developers discussed in the sections above. More than 50% of app businesses are not sustainable at current revenue levels, even if we exclude the part-time developers that don’t need to make any money to continue. A massive 60-70% may not be sustainable long term, since developers with in-demand skills will move on to more promising opportunities.

So, if you want to drop out of school to strike it rich in the app world, VisionMobile points out the promising growth of enterprise apps since businesses are paying much more for mobile software than consumers. Or, you can choose to develop apps as a means to learning new skills while growing a portfolio of mobile software, but don’t forget we’ve already warned you about “zombie” apps.

 

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