Craig Hockenberry, a developer over at the IconFactory, wrote an open letter to Apple CEO Steve Jobs explaining how the proliferation of cheap 99 cent applications (ringtone apps) are making it harder for developers to embark on cutting edge, and more costly, iPhone app development.
We have a lot of great ideas for iPhone applications. Unfortunately, we’re not working on the cooler (and more complex) ideas. Instead, we’re working on 99¢ titles that have a limited lifespan and broad appeal. Market conditions make ringtone apps most appealing…
Before commencing any new iPhone development, we look at the numbers and evaluate the risk of recouping our investment on a new project. Both developers and designers cost somewhere between $150-200 per hour. For a three man month project, let’s say that’s about $80K in development costs. To break even, we have to sell over 115K units. Not impossible with a good concept and few of weeks of prominent placement in iTunes.
But what happens when we start talking about bigger projects: something that takes 6 or even 9 man months? That’s either $150K or $225K in development costs with a break even at 215K or 322K units. Unless you have a white hot title, selling 10-15K units a day for a few weeks isn’t going to happen. There’s too much risk.
Raising your price to help cover these costs makes it hard to get to the top of the charts. (You’re competing against a lot of other titles in the lower price tier.) You also have to come to terms with the fact that you’re only going to be featured for a short time, so you have to make the bulk of your revenue during this period.
This is why we’re going for simple and cheap instead of complex and expensive. Not our preferred choice, but the one that’s fiscally responsible.
It’s an interesting article, and a point that has been made before by a number of developers, but it’s unclear as to what Apple could do to remedy the problem. Should it exert more ‘quality control’ over which apps actually make it into the store? Is there something Apple can do to feature more prominently some of the more substantive applications? Should Apple streamline the number of applications in the app store by eliminating poorly performing programs? Let us know what ya think in the comments.
You can check out the full letter over here.