Tim Bray, the man Google hired to woo developers to its Android platform, has said that app-sales in the US$2 billion a year mobile market “sucks”.
“I deeply believe that the app-sales business sucks. Selling anything on a one-time basis at a price below $10 is historically the kind of business that’s been owned by companies like Walmart,” he wrote on his personal blog.
Bray’s comments were in part a response to a prediction by analyst firm Forrester that mobile app revenues, which stood at around US$1.9 billion in 2010, would hit US$38 billion by 2015.
“If you look at the mobile-apps business, well, it’s just not all that big. Even the kind of money that Rovio’s pulled in with Angry Birds does not point at the kind of exit that makes a venture investor’s heart go pitter-pat,” said Bray.
At yesterday’s iPad 2 launch Apple boss Steve Jobs reminded the world how important Apple’s iOS platform was to today’s revenue, having delivered US$2 billion to developers since 2009.
Analyst firm IHS estimated last month that Apple’s App Store held 82.7 per cent of the US$2.2 billion market.
And despite Android’s new found dominance in smartphone operating systems, Google held just 4.7 per cent of app store revenue last year.
The major problem for developers, according to Bray, was that most of the money today goes to just a few “hitmakers”, while the vast majority of developers fall into the “long tail” that make very little money.
“[$2 billion] sounds like a big number. But if you divide it by the number of active developers, it sounds small,” said Bray.
“I acknowledge that it’s working for some people, but it’s just not where I’d want to be.”
Apps will become a realist option for developers when those in the long-tail can make a decent living, he said.
Potential answers to the problem of sub-$10 one-off sales included in-app sales, software upgrades, ad sales or “server-side enablement”, such as Amazon’s Kindle and Apple’s iTunes.
But the fact that Apple paved the way for developers to make money from apps should not provide any comfort to developers, according to Bray who last year declared his hatred of Apple’s business model for the iPhone.
“It’s a sterile Disney-fied walled garden surrounded by sharp-toothed lawyers. The people who create the apps serve at the landlord’s pleasure and fear his anger... I hate it.”
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