Making money from apps is HARD – some data

By August 21, 2014Mobile, Uncategorized

Screen Shot 2014-08-20 at 17.44.29

As you can see from the chart above only 3% of mobile app developers are making more than $100k per month/$1.2m per year. Assuming the same power law applies as monthly revenues scale further it’s a fair guess that only 3% of that 3%, i.e. 0.1%, are making $1m+ per month or $12m+ per year. That’s one in a thousand making enough to be interesting as a VC backed startup. Not great odds.

And it’s getting worse. The latest news is that app downloads are decreasing. The average Brit has downloaded 1.8 apps to their phone, down from 2.3 a year ago and 31% of smartphone owners have no third party apps on their phone at all (up from 20% last year).

The trends show that developers are still increasingly favouring apps over web technologies, but I’m thinking that might change soon. Maybe it will become easier to make money on the mobile web than from apps. It doesn’t seem like that’s a high bar.

The chart above came from Vision Mobile State of Nation Q3 2014 which you can download for free here (registration required).

 

 

  • Holiday in Dartmoor

    Cool FT article on that earlier this week. ‘Apps: Growing pains’: http://www.ft.com/cms/s/2/d72f0e14-27ab-11e4-be5a-00144feabdc0.html#axzz3AxH41LBZ Agree with the mobile web observation.

  • http://twitter.com/yanroux Yannick

    Is it hard because app distribution is broken (and so only the top 10 apps in each category scale) or because monetisable business models don’t work on mobile? Also, time spent on mobile web is tiny, so unless that changes not sure it will get more attention from developers : https://twitter.com/BenedictEvans/status/502520057373941760

  • http://www.theequitykicker.com brisbourne

    I saw this. Thanks.

  • Dan Field

    Interesting story from Sky… but I read it as they just aren’t switching Apps rather than shifting to mobile web.

    It’s getting harder and harder for the App devs to get that initial install, the App stores are broken…. one of the things advertisers are now trying to do is target new phone setups for example, trying to target App PPI ads to be one of the first 10-20 Apps the user installs. Those will be the ones they’ll stick with.

    Tracking the on-going engagement and data usage of these Apps is an interesting topic (And a key part of our business here at millenoki 🙂 ).

    Another article just popped up on this same subject:

    http://gigaom.com/2014/08/22/are-we-in-a-mobile-app-glut-report-says-most-us-phone-owners-arent-downloading-apps/

  • http://www.theequitykicker.com brisbourne

    Good point Yannick. I hadn’t realised that mobile traffic was that weighted towards apps. Re distribution – I think industry structure is the issue. Lots of apps do make money.

  • http://www.theequitykicker.com brisbourne

    Thanks Dan. Agreed, no sign of people moving to the mobile web. Yet….