Software Profits: where’s the App for that?


The phenomenon of the iPhone can’t be disputed, with about 9 million sold and growing, with a reach and influence that has made Apple the most valuable technology company in the world.  The primary driver is the “i” not the “Phone” — the versatile and expanding universe of individual applications available on the device. This, and the competitive expansion of Google’s android OS gives individual software programmers unprecedented opportunities to sell their products, ushering in a realm of newfound riches, right?

So what kind of economic windfall are these software developers enjoying?  According to one long analysis, not much. Plugging some data holes and with a few assumptions, this piece calculates that the average revenue per paid (not free) application is just over $3,000 per year.  And because this is the average, with the bulk of revenues devoted to just a few apps, median revenues per paid application is estimated at a mere $682 a year.  That’s about the cost of two iPhones — before one factors in software development costs or any other expenses.  In fact, it makes the old-fashioned lemonade stand look like a real bargain.