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Apple iPhone Developers Mostly Don't Make Much Money

Developers, enticed by tales of earning $600,000 in a single month, should face the fact that such breakout success stories are the exception rather than the rule, one survey finds.

Apple iPhone 3G S
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Apple iPhone 3G S

The imminent arrival of Apple's new iPhone 3G S and the new iPhone 3.0 software has stirred excitement among iPhone users and iPhone developers.

But iPhone developers, enticed by tales of earning $600,000 in a single month, should face the fact that such breakout success stories are the exception rather than the rule. To use a phrase popular among other online observers who have weighed in on the subject: Don't quit your day job.

Adam Martin, a U.K.-based online game consultant, began surveying iPhone developers in May about their experiences creating iPhone applications and has just posted some initial results on his blog T-Machine.

Martin surveyed 100 development teams, received 85 usable responses, and found that 52% of the developers had earned less than $15,000 for their efforts and 33% earned less than $250.

For those bringing in more significant sums, the breakdown is as follows:

  • 2%, $15,001-$50,000
  • 1%, $50,001-$100,000
  • 1%, $100,001-$250,000
  • 1%, $500,001-$2,000,000

About 38% did not disclose revenue.

A blog post last month by iPhone developer Mark Johnson reports revenue consistent with the iPhone developers who responded to Martin's survey. Johnson said that over six months, his iPhone game Hit Tennis brought in $10,387.19. That's before taxes.

So from a statistical perspective, perhaps 5% of iPhone developers earn enough to support themselves with revenue from the applications they create. However, the picture may be different for iPhone developers who code on contract and give up application ownership for reliable income.

In an e-mail, Martin said that two aspects of his survey stand out. First, he noted that half of the respondents had not made games before. "Game development is a specialty with lots they'll have to learn the hard way," he said.

Second, he found the business costs for the vast majority of the development teams to be "absurdly low."

He advises iPhone developers to keep costs low and to explore the possibility of working with a publisher. "The current tactic -- relying on 'getting a hit game' -- is one of the riskiest and most foolish business plans in the world; they need to learn to make a profit without that one-in-a-million chance," he said.

At the same time, he acknowledges that game publishers at the moment aren't set up to service single-person and small development shops. He says he's looking into ways to make the traditional publisher/developer relationship work at a smaller scale.

The iPhone may be your next full-function computer. InformationWeek has published an independent analysis of this topic. Download the report here (registration required).

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