David Bovill wrote:
Richard and others have made this point - but I think the figures are
misleading. From memory there are two figures that stick in my head - and it
would be great to have them discussed, trashed or verified on this list :)
First that 97% of mobile app revenues are on the iPhone - this one I find
hard to believe, though I can also understand how this could be possible.
I'll dig out the bookmark I have for that one if it proves to be
controversial :) Second that 80% or there abouts of mobile phone web
browsing of sites are from iPhone users - that one was from Mr Jobs KeyNote
- but there could be some independent source somewhere - again I can
understand why that may be the case - it is one thing having a phone that
can send MMS or browse the web in theory, and another to get users actually
to use the stuff, or better still actually pay for it (in terms of app or
media purchases) - iPhone OS is leagues ahead of everyone at the moment on
these fronts.
The figures that indicate the real battle are the projected ones and the
ones that refer to the (very) recent growth of Android - these are promising
but not yet solid.
Yet. So much hinges on those three letters.
I don't think the market share stats I quoted from Computerworld/WSJ are
any more or less misleading that others (for those that missed it
they're here:
<http://blogs.wsj.com/digits/2010/02/01/iphone-loses-market-share-in-fourth-quarter/>).
Stats are both rewarding and challenging because the different
methodologies used provide different views into the data. And like any
study of macroeconomics, there will always be disagreement about what
they mean. :)
Given the variety of projected outcomes from these various
methodologies, from "iPhone will rule the world!" to Gartner's
suggestion that iPhone OS will be overtaken by Android in under 24
months (see
<http://www.computerworld.com/s/article/9139026/Android_to_grab_No._2_spot_by_2012_says_Gartner>),
I think it's prudent to take them all into consideration.
It's true that the Apple audience in general, and particularly the
subset of that audience that are early adopters of new technologies,
tend to spend more on related third-party products like apps. Being a
sort of "boutique" vendor with high margins and focusing on quality over
affordability, Apple has a solid niche that has earned it tens of
billions in retained earnings, even with its 10% desktop share and 24%
mobile share.
Consistent with this, while Apple has a 10% share on the desktop most of
our products make 25% of their revenue from Mac sales, two and half
times greater per capita than we get from the Win market.
But that is per capita. As more capita come on board, the totals change
dramatically. Not everyone drives a Volvo, but everyone needs tires.
So for us app developers, another useful metric is app revenue. But
even here we see some variance when it comes to determining what these
numbers mean.
Consider this attention-grabbing headline:
Estimate: Top 1000 iPad apps making $372k a day
<http://www.tuaw.com/2010/04/21/estimate-top-1000-ipad-apps-making-372k-a-day/>
That sounds like a gold mine!
Well, kinda.
If you examine the underlying math, it paints a picture we could
politely call "mixed".
The crux of the numbers comes down to this portion of the article:
By their reasoning, the top paid app in the store sells
about 5k copies per day, with the number two app selling
about 3k, the number three app about 2.5k, and so on.
Vimov estimates that everyone in the top 100 list, when
you add them all together, is making about US$304,058
on any given day. The shelf drops off from there -- in
the top 1000, developers are making about $372,000, and
past that, they're obviously making less.
If I read that right, here's the breakdown:
The top 100 are collectively making $304k/day and the top 1000 are
making $372k/day, which means that those who are in the top 1000 but
below the top 100 (the lower 900) are collectively making only $68k.
Split that among 900 apps and that's $75.50 per app per day.
And then there are the other 180,000 apps. With the top 100 collectively
making $304k and the next 900 making $68k, at that dropoff rate we can
expect the second best-selling 1000 apps in the AppStore to make about
$17k split among them all, and the third best-selling 1000 to make about 4k.
Then it goes down from there for the other 150,000 apps, ranging from $4
per day per app down to zero.
Meanwhile, the current minimum wage in California is $8/hr. In an
eight-hour day a worker with very few skills can make $64. :)
So while an Apple advocate could say "iPhone OS deployment will make you
rich!", a naysayer could say, "You can make more money flipping
burgers". :) Same math, different perspectives.
While the iPhone OS is attractive to me and my clients, as is Android
and the rest of the mobile market, I have to acknowledge that my desktop
apps -- where I'm able to use a high-level tool like Rev to deploy at
much lower cost than I would incur using Objective-C -- make a lot more
money every day than every iPhone app below the top 100.
And compared to the average, my desktop apps are pulling in several
orders of magnitude more money that most iPhone apps, certainly more
than the bottom 150,000 App Store offerings who make next to nothing.
Which brings us to this point:
Like a few others on this list I am now pretty convinced that the PC market
is about to be dramatically overtaken by the new mobile market in terms of
sales and new software developments. Apple and others will be quite happy to
leave the desktop market to the web and to open source strategies - they
simply will not be interested in closing this market - let Google have it.
As a shareholder, I hope not.
For all the attention mobile devices are getting as The Next Big Thing,
this survey suggests a role that's more complimentary to the desktop
than a replacement for it:
Survey finds 16GB iPad 3G most popular, not viewed as PC replacement
...
Similar to Um's survey of iPad buyers for the Wi-Fi-only launch
on April 3, most -- 94 percent -- said the iPad will not replace
their computers. Most said they will use the device for Web
browsing, media content viewing and other personal entertainment.
Only a handful said the primary use of the device would be for
reading.
<http://www.appleinsider.com/articles/10/05/03/survey_finds_16gb_ipad_3g_most_popular_not_viewed_as_pc_replacement.html>
I see phones and tablets as only a beginning of an increased diversity
of the computing ecosystem, in which we can also expect heads-up
displays to play a role within a year or two.
In the organic ecosystem, we didn't see reptiles disappear when mammals
came on the scene, but instead saw a greater proliferation and variety
of them both.
I see the same for computing: When I was a kid the word "computerized"
was used fairly commonly, but now even our cars have a PPC processor in
them and everything is computerized, so the word has lost its usefulness
as a distinction.
So now phones have computers in them too. Next will be refrigerators
(some already do), and a host of other gadgets that haven't been
invented yet.
These will come in all shapes and sizes, each addressing a different set
of tasks.
And amidst all this variety, I see a role for a general-purpose
do-it-all device for at least another few years, much as we have now
with our laptops, desktops, and netbooks.
I think Apple does too, and very much look forward to OS XI.
--
Richard Gaskin
Fourth World
Rev training and consulting: http://www.fourthworld.com
Webzine for Rev developers: http://www.revjournal.com
revJournal blog: http://revjournal.com/blog.irv
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