Everyone loves to see how much money iPhone apps earn so I thought I would share how much money I made with Beer Pad.
A Typical App
I like using Beer Pad as yardstick to try to project how much an average iPhone app can expect to earn. Beer Pad is a simple app that appeals to a very niched-down audience and it simply follows the typical app revenue model; Beer Pad’s cost varied between $1.99 to $3.99 throughout the year.
Another reason I like Beer Pad is because it represents a sort of coup for me personally: the idea for the app came right from the market itself, the code was repurposed from Wine Pad and the app has been well received in reviews. To keep things in perspective, the initial time it took to develop Beer Pad was about two weeks most of which was spent on doing research into the niche itself.
No Dreamy-Eyed Earnings Report Here
Finally, as you will see in a bit the earnings from Beer Pad are modest. If you are expecting to see the dreamy eyed “I made $100,000 in only five seconds on the App Store” you will be disappointed. However, I do believe that Beer Pad probably fits the profile of a relatively successful app. This hunch has been backed up at a recent conference I went to were the developer suggested that most successful apps will bring in about $10,000 and mostly in the first month or two.
So – How Much Already?
So, without further ado to date Beer Pad has made $8680 in total revenue. Most of that was earned in the first three months. The average revenue over the past year is $18. These numbers are after Apple’s cut.
Here you can see the break-down of Beer Pad’s earnings in three month increments:
| Period | Total Revenue | Average Revenue |
|---|---|---|
| 1 | $5,202 | $57 |
| 2 | $1,451 | $16 |
| 3 | $992 | $11 |
| 4 | $644 | $7 |
Finally, here is the graph from App Viz detailing the sales over the past year:
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Some Thoughts-Analysis-Lessons
The Long Tail
The first thing that is striking from the graph above is the head of the tail seems to be were most of the money was made. In the long tail, sales dropped down to only $7 per day. Every app that I have worked with involved a similar pattern and as the App Store gets older the head of the tail gets shorter.
Update Effects
It is not all that clear from the chart here, but updating Beer Pad would result in a sales boast for a few days. This is usually a significant but minor increase.
Will This Keep Your Kid In Diapers?
The other striking part of these numbers is the overall revenue. You will need to ask yourself: will one app like this be worth your while in time. For me, the answer is yes because I simply leveraged code that I already had in place. However, if you are looking at two to three months of development time then the question is a bit more difficult especially if you have more than one partner involved in the project.
Can You Afford to Maintain, Upgrade and Support Your App
So this is the unpopular discussion about whether you can afford to keep adding features to your app to keep it fresh. At some point I will need to take a look at that $7 per day figure and decide whether I can really afford to spend a week or two adding new content to the app. Many developers simply believe that you should keep on loving your app regardless of its performance no matter what and at any cost.
But, when you look at numbers like this and realize that most of your money will be made in the first month then assuming you have bills to pay you made need to consider releasing a new app instead of sticking it out.
Take-Away Message
I consider Beer Pad to be a successful app for a few reasons, but financially Beer Pad would not work on its own. The reason that it is a viable product for me is that it is part of a suite of apps (I had 9 apps out at one time last year). Simply releasing an app on its own and doing nothing else probably will not cut it for most developers.
Something I would recommend that you consider is to think a little outside the box when planning your app business. Think of supplementing your app sales with consulting, a desktop app, speaking or even ad supported apps. The app store is competitive: 85,000 apps and prices are falling to 99 cents. This is the time to be a bit more proactive in our business models so we can find a way to make this work. The app business can work, but we can’t just expect to build something, use Apple’s business model and assume we will make millions.
Any Ideas to Make It Work?
Given these numbers I’m curious about your thoughts. Can you make the mobile app business work for you? What new and crazy ideas do you have to make it work? Comment below!!
{ 10 comments… read them below or add one }
Thanks for sharing. It is good to have realistic expectations – this will keep pushing us to create better products.
Great clear and realistic stuff. Good work Matt.
This mirrors my experiences as well.
Despite drastically reduced income from released apps though I will update them as I see fit – usually because I write apps for myself first. If an concept is complete as it was intended, then it just stands as-is. If I continue to use it and get good feedback from the user-base then I will implement updates and improvements to make it genuinely better.
I agree wholeheartedly with Mike J. When I write an app, it’s because I want it for myself, and I hope others will want it too. Because I’m a user and my own harshest critic, the app is never done, and will continue to see updates and improvements. Luckily, that tends to cause a bump in downloads each time it’s released.
Thanks for sharing these figures, Matt.
We’ve been testing the update thing to see how it helps with sales numbers, but the increase usually only lasts for about a week. Looking at the effect, it’s about a $100-200 revenue bump. Considering opportunity cost for working on the update instead of a new app, it doesn’t seem worth it, unless an update really makes sense or is quick to do. I’m convinced that cross-sells work better, so a suite of apps is a better use of time than constant updates.
Those are pretty good numbers, Matt, at least from my perspective. I could actually live (frugally, but still) on that income for almost a year where I live. Anyway, thanks for sharing the data. My first app got approved today and I’m planning to share my sales statistics as well, I don’t expect nothing special though, just want to see what will come out of it.
Oh, and I strongly agree with Kyle and Mike – I make apps mostly for myself as well.
This is very similar to my experience with I Can Has Cheezburger Pro. It’s now at about $20/day so it hasn’t really reached the long tail yet. The free ad-supported version currently sells about 200-400 a day. In the beginning it was 2000-3000/day.
On the other hand, the pattern with iDjembe, which isn’t popular, is very different. The sales vary wildly from 0 to 4 copies a day. and it’s pretty much been the same since I released it.
I’m certainly not going to quit my day job
Please provide detail of funding by program.
Thanks for sharing this info Matt. It’s difficult to find real numbers on apps so I definitely appreciate your openness with this. I have a few app ideas that I’m working on part-time so it’s good to put some sample figures around my timelines.
I echo Joe’s sentiment: thank you for being so profoundly open and honest about your personal business; I’m at the beginning of this app-business-thing, and this is an incredible help. I wouldn’t mind speaking to you offline if you have a moment (not sure what your consulting engagements look like, but I’d like your perspective there as well).
As far as new business models and the ‘long tail’, I like Tweetie’ ‘Version 2′ idea – it’s a separate app with features I can choose to pay for by buying the new app. I wonder if this isn’t a model that could be explored a little more (e.g. using in-app purchase for ‘modules’ of functionality for daily-use apps like communications clients and similar utilities. I also think social-media integration plays a significant hand in app use and could ultimately drive users back to your app(s) and, when integrated with a strong in-app purchase program, could drive continuous sales (think FaceBook games, gifts, etc.).
Just my 2 cents as a novice.