Monday, May 12, 2014

Surviving (or not) in the Apple AppStore Now That the Party is Over

 The bulk of this article was written back in December but I never posted it.  Things have gotten worse.  Where the article says "We may have to shift to part time..." we already have. "We have a couple ideas that could still hit..." they haven't.

Also the 58 apps number may be slightly inaccurate.  we've released new ones since then, but also removed some of our crap because we didn't want potential employers finding our old garbage apps instead of the good ones when checking into our work.  (FYI: we only removed them from sale in the USA; not worldwide.  The "no reason to clean up after yourself" section below still holds true.)

December 2013:
Yes, you heard that right:  The AppStore party is over.

Or, more specifically, there are a happy handful of apps are making millions of dollars and hiding the millions of apps making a handful of dollars.

The company I work for--that my brother founded--has been in business since 1997.  We have 58 apps in the AppStore.  We've won awards and been featured in magazines and books.  And now we may have to shift to part-time or side-project and get other jobs soon.  That sucks.  (We have a couple ideas that could still hit.  Hopefully! But if they don't...that sucks.)  And a lot of the problems are things that we are powerless to fix. And that sucks.

"Millions of Apps!"
As more and more apps flood into the AppStore it becomes harder and harder for smaller, independently developed, or niche apps to get noticed at all.  If you don't get noticed, you don't get sales.  Now it is just a question of whether Apple decides to feature you or if you get written up in one of the big tech blogs.  If you don''re screwed.
That brilliant App idea you had?  Someone's done it already.  And even if yours is better it's likely that no one will notice.  And why should anyone pay for yours when there's a crappy one for free.  Yes, in 2009 you may have gotten rich off that idea.  Today, it may buy you a cup of coffee.
This issue is exacerbated by some systemic problems with the AppStore itself.  Problems that at present, Apple probably won't fix.  In fact, Apple has almost no interest in fixing them.  Because Apple likes to strut out the big numbers--the big number at the top is all that matters to Apple.  They like the fact that (as of this writing) there are over 1 million apps in the US AppStore and almost 1.5 million worldwide.  The other fact that at least 80% of those apps (800,000 - 1.2mil of them) have almost no sales and have probably been abandoned by their developers is of no concern to Apple.  Those apps still count toward the impressive sounding total.

They want their big number to stay bigger than Google's big number and Microsoft's big number.  The percentage of dead apps doesn't matter as long as they stay in the pile.

Apps vs. Music
One of the main systemic problems with the AppStore is that it grew out of a music store.  Music works very differently than software.  As music gets old it may become less popular, but it never becomes obsolete.  There are people in the world that are listening to Mozart, or Sgt. Pepper's, or London Calling, or OK Computer (or...hell, why not: New Kids on the Block) for the first time today and enjoying that music just as much as the people who listened to those songs when they were new.  But no one is loading up Asteroids, or VisiCalc, or Doom, or Word 2.0 and feeling the same way people did when those pieces of software were new.  Software doesn't work that way.  You may feel nostalgia, but you won't feel mind-melting awe.
Vinyl records: YES.  5.25" floppy disks: NO.
Software doesn't age well.  Particularly utility or productivity software does not age well.  People may occasionally feel nostalgic for an old video game, but no one loads up Word 2.0 or WordPerfect on MS-DOS when they have a document they need to get done for their business.

Which means that developers need to constantly update their software in order to keep it relevant.  A band never needs to go back and re-record an album because studio technology has improved and the recording would sound better.  And if a band did decide to do that, they would not give away the 'new' album free to everyone who bought the first edition.  The recording quality of a Louis Armstrong album is not going to be as good as a teen-pop album recorded today. But that doesn't matter because the quality of the music can be appreciated separately from the quality of the recording.  Software does not have that luxury.
Old albums become back-catalogue. Old software just becomes obsolete.
No Incentive to Clean Up After Yourself.
Once a developer pays their annual fee to list something in the AppStore, they can list as many things as they want.  And there is no incentive to ever take something down.  Even if it's old, obsolete, and the developer has no desire to ever update it.
Let's say a developer has an old app that sold reasonably well in the past, but has had its run and isn't selling much anymore. And the developer has moved on to other Apps.  However, let's say this old app still makes about $6 per month.  Well, when your choice is $6 per month or $0 per month and you don't have to do anything either way... You take the $6.
Yes, it's crap.  No, it doesn't support iPhone5.  Yea, it probably crashes on iOS7 (I don't know, I haven't installed the thing in years.) It may not even support retina displays, I can't remember.  If someone emails about it, I just delete the email.  I have more important things to worry about. Whatever, $6 per month is still better than nothing. 
This problem could be solved by requiring some nominal yearly fee per app.  Except Apple would never do that because developers would immediately take down all of their apps that aren't making any money.  This actually would be fantastic for the apps that remain, but Apple's marketing would have to change from "MILLIONS OF APPS!" to "200,000 Apps....but they're the good ones that you'll like."

"Give it Away Give it Away Give it Away Now."
Apple's "Free Upgrades Forever" policy doesn't help.  It basically turns the App Store into a collection of 1-off programs that may get an update or two to boost sales early on, but eventually will be abandoned because every time someone buys your app, they are taken out of the pool of potential customers who could buy your app again.  The idea that it's easier to keep an existing customer than to find a new one goes out the window because once they are a customer, they can't buy the same thing again.  That's a tricky concept, so I'll explain it better.
Suppose you design "Cool App version 1" and sell a million copies.
That's fantastic!
Then you work for a year on version 2. To be clear, version 2 is not a sequel, it is the same app just with added functionality, new features, some design improvements, and updated graphics...
If you release version 2 as a (free) upgrade to version 1, then you get 1 million happy users and $0.
If you release it as a separate app, then you get 1 million disappointed users.  But some of them will buy the new app.
The obvious choice is to release it as a separate app.  You gotta stay in business, right?  But you also can't take down Version 1 because then you would lose the ability to make any bug fixes to that version.  You then run into the problem that some new customers may find Version 1 without realizing Version 2 exists.  Once they install V1, they'll likely see the notice you put inside the V1 app saying "Be sure to download the new Version 2!"
This further sucks because none of the good reviews for Version 1 will transfer over to Version 2.
There is no way to offer version 2 as a paid-upgrade to version 1 but contained in the same app package and give people the choice not to upgrade if they don't want to pay again.  (Games can do this to some degree by adding level-packs or things like that, but that is hard to do with utility software.)
There is no way to offer different price points for iPhone or iPad without (again) breaking things out into separate apps.
There is no official way to offer discounted pricing for upgrades.  Although WE DID FIGURE OUT HOW TO DO THIS but doing so further fragmented our core app.

Cheap. Cheap. Cheap.
Most apps in the AppStore are free or $0.99.  It's rare that an app can charge more than $5 and extremely rare for an app to charge more than $10.  Desktop games can cost from $10 to $60.  Desktop productivity software can cost hundreds or thousands of dollars.  For the most part, mobile software costs 99 cents or free.  You have to sell a lot of copies to make any money from 99 cents per pop. So niche software is out. And people are so used to the cheap prices that no one is willing to pay more than that. So niche software is out again. In fact, it's even tough to pry 99 cents out of people's hands.  That is why so much has shifted to free with in-app purchase because people can see if they like something.  But Apple limits so much of what can be done in this way because they won't let an app 'expire' after a time limit, and they prohibit many of the traditional 'shareware' methods of convincing people to pay after they've gotten a taste of what your app has to offer.

That's where the December 2013 writing ended.  I never finished it.  So it just sort of gets cut off in the middle of a thought.  But that's how I feel right now--cut off in the middle of something good.
Our business has no shortage of new ideas for products, new ideas for improvements to the existing catalog, or new things to do.  We just can't do any of them because no one is buying what we are selling anymore.  And they aren't buying the competitors' products either, so we don't know what we could be doing better.

Back in the 'good old days' which was 2008-2010 if an app 'failed' it would still probably make a few thousand bucks over a year or so and you could at least cover a chunk of your time.  Now if an app fails, you're lucky to make $100.  Some of our recent releases haven't hit $50 yet.

One more thing...
Tech support:
Developers have no way of knowing if an email is coming from a customer or a pirate.   Imagine stealing a car off a dealer's lot then turning around and driving it into their service center to collect on the warranty.  That happens here.

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