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I’ve been reading a lot more since getting Kindle. It’s no wonder – Kindle is extremely convenient, and I can buy and start reading any book literally in less than 60 seconds, even when there is no Wi-Fi (Kindle comes with free 3G internet access). To this day, this is still mind-blowing to me. I used to wait for 3-4 weeks for books to arrive to Czech Republic from Amazon in the past.

As a software author, the little book called “Appillionaires” written by Chris Stevens has caught my attention and found its way to my Kindle. Just as Kindle revolutionized the book industry, the Apple App Store has revolutionized the mobile applications industry. Let me share with you what I learned in the book.

Appillionaires – How it all started

The story starts with the iPhone. Without iPhone, App Store simply wouldn’t be possible. Before iPhone, the carriers had strict control over the design and functionality of cell phones. Cell phone manufacturers had to stick to hundreds of pages of specifications; otherwise carriers wouldn’t distribute and subsidize their phones. Apple’s first attempt at smart phone was called Motorola ROKR. Because Motorola and the industry were tied by the old ways, the phone was a failure. Steve Jobs has realized that Apple will have to build the iPhone entirely on its own. And it did – in complete secrecy. iPhone entered the market thanks to a unique deal with AT&T, which allowed Apple to have complete control over the software and hardware of iPhone, which was unheard of at the time.

iPhone originally came only with inbuilt apps, and it was not possible to download additional apps (unless you “jailbreaked” the phone). Apple realized the opportunity, and launched the App Store, which became instant success. Apple leveraged the payment information it already had for millions of iTunes users. For them, purchasing from the App Store was ridiculously easy.

The gold rush

The astonishing success of the App Store has started a gold rush. Everyone wanted to play the App Store lottery. After all, the successful apps started earning many millions of dollars! But still, it was a lottery, because the luck factor was, and is to this day, a big factor when it comes to success on App Store.

Media has popularized the first successful apps that made their authors appillionaires. Today it’s virtually impossible not to see any Angry Birds reference in any given week.

The media popularization of the App Store success stories skewed the public opinion about the app store market – it might seem that attaining riches there is easy, but the reality is that it is a very tough market.

Some interesting facts

Did you know that…?

  • There are over 530.000 apps in the App Store
  • Over 20.000 news apps are submitted each month
  • It takes about 5 days on average for App Store to approve a submitted app
  • Over $250 million dollars is spent on App Store every month
  • The average app price is $1 for games and $2 for other apps (But there are also thousands of apps priced at $9.99, $14.99, $19.99 or more)
  • The most popular app categories are games, books and entertainment
  • The total cost to buy all apps is over one million USD. Tough for collectors!
  • Apple keeps complete editorial control over the App Store content
  • The entry barrier is relatively low – you just need to pay the $99 sign-up fee and adhere to Apple’s guidelines
  • Apple takes a 30% cut, but you can set any price you want

About the “Appillionaires” book

The book is very well structured. It has three parts, each of which has several chapters. Every chapter has a bulleted summary at the end. The three parts are:

  1. The Birth of the App – the history of the App Store and iPhone
  2. The Appillionaires – covering personal stories of the most successful App Store authors
  3. The App Revolution – talking about the current trends happening in the app business. Large game companies and publishers desperately want to jump on the bandwagon by acquiring app developers left and right.

The Appillionaires stories cover the developers of:

  • Doodle Jump
  • Harbor Master
  • Pocket God
  • StickWars
  • Angry Birds

Incidentally, all of these are games.

The stories are very intriguing – for example, it has surprised me that the Angry Birds authors released 52 games before Angry Birds and were on a verge of a bankruptcy. I was also surprised to learn that Angry Birds earn more from merchandise and licensing deals than the actual app sales (which are in tens of millions of dollars).

Yet another interesting tidbit is that the commercial success is much harder on the Android platform than on the Apple platforms: Sales of Angry Birds on the Android platform were very disappointing – you can now get Angry Birds for free for the Android. The Android version makes money exclusively from advertising – and it is significant revenue.

The unique background of the interviewed authors of these apps – almost always 1 or 2 person teams – has given their games a unique twist that was probably the secret ingredient necessary in order to succeed in the app store.

I disliked only two things about this book: First, there are no stories of successful non-game app authors, which would certainly provide additional perspective and insight useful to mISV like me.

Second, the book omits to explicitly say just how “cold” the hard cold reality is. So let me give you an idea – because it costs about $10.000 to $50.000 to develop an average iPhone app, most of apps never even cover the original expenses. 30% of apps never make more than $1000 in total and majority of apps earn less than $700 per year. The reality is even grimmer on the Android platform – iOS developers make twice as money as Android developers. And the competition is fierce – together, the Apple App Store and Android Market list over 700 thousand app.

That being said, the book is well written and certainly an enjoyable and worthwhile read. Both paperback and Kindle versions are available from Amazon. It has 224 pages, which is just about right. The most valuable part of the book are the detailed stories. The stories of the app developers from their youth might even stir some nostalgia in you. And who doesn’t like to read about the success of fellow developers? We all are “rooting for the little guy”.

- By Jiri Novotny, the founder of Dextronet.com and author of Swift To-Do List, a successful task management software for Windows.

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