In the first part of this post I promised to publish my own App Store statistics as an example of how things can go in the world of iPhone applications.

Unfortunately, I don’t have all the data because I did not have access to the Sales/Trends module in iTunes Connect for quite some time. However, the data I do have is sufficient to draw certain conclusions.

Mistake #1

You think you can always change the way things are going, even when all you can do is a change for its own sake.

Mobile Lines was initially released on September, 3 for $2.99. The only metric I had at the time was relative popularity as seen in iTunes. And, mildly speaking, it was disappointing. My interpretation of the low popularity was that the price was a bit too high. There did not seem to be any other explanation. Yes, I know that adjusting prices without any sales data is not a good business practice, but I thought I had to do something about it. I presumed I knew what I was doing.

On September, 17 I updated the app and simultaneously lowered the price to $1.99. After a three-to-four days sales spike it just kept sinking despite numerous improvements and a more attractive price. The only achievement was the Top 100 lists in the Russian App Store.

On September, 29 I released another update, 1.2. A day later I got access to my sales reports. For a few days I could observe what is actually a peak of sales.

Date	Number of Copies Sold
September, 30	25
October, 1	40
October, 2	24
October, 3	27
October, 4	22

After October, 4 the sales are nothing to write home about, from 0 to 5 copies a day, totaling 237 copies by November, 4. Note, these numbers are worldwide sales.

Mistake #2

You can always make it up in volume.

On November, 5 I released the 1.3 and, mostly out of curiosity, lowered the price to $0.99. It was an experiment. If the minimal price is a decisive factor to make up one’s mind to purchase something, I could really afford to lose in fees and gain in sales volume and popularity, which, in turn, would lead to better sales. They say the trick can do wonders. Except it didn’t for me.

Date	Number of Copies Sold
November, 6	86
November, 7	73
November, 8	41
November, 9	32
November, 10	20

After Mobile Lines dropped off the first page of recently released applications its sales fell through the floor. Now, compare 220 copies at 2 bucks apiece to 276 copies at 1 buck, both numbers over the first 20 days.

Problem #1: Publicity

Lowering prices just isn’t going to work if nobody knows about the product. Indeed, you cannot buy the thing you haven’t heard of. What does the price matter if you don’t even see the price tag? I should somehow promote the application. But, given the miserable revenue, I cannot advertise it in Macworld. All I can count on is word-of-mouth marketing.

As I said in the previous post, Apple can arrange a lot of free advertisement on the front page of the App Store without incurring any significant expenses. In fact, Apple is taking some small but important steps in the right direction, be it the “iPhone Your Life” page or new App Store categories like Medical. When Apple stops treating software like music, we’ll see much more because Apple’s marketing is one of the best on the planet. Just let them improve the App Store.

Problem #2: Business

Meanwhile, Mobile Lines remains a loss-making product. Not that I ever hoped it would earn me millions, I just thought its sales would cover its development in a reasonable amount of time. Not that I am going bankrupt because of poor sales, I just worry that I won’t be able to support it well enough to feel comfortable.

Let’s do some simple math. The best day in the life of Mobile Lines brought 86*$0.99 – 30% (Apple’s tax) = $59.6. Here in Russia we pay 13% income tax, so all I finally get is $51.8. It’s not very great, is it? Now take the numbers for 20 days, (276*$0.99 – 30% – 13%)/20 = $8.32. Now tell me what country I should move to in order to survive on 8 bucks a day.

Note that I’m not talking about the crappiest application known to man. I’m not blaming potential customers or competitors either. We are all in the same boat and there is no easy way out. The less developers earn, the worse they code (outside FSF, that is, because free software lives by its own rules). As a customer myself, I don’t think that customers benefit from dirt-cheap stinking-crappy products, especially if these products imply warranty and support. Software support is very expensive, sometimes even more expensive than development. Ask your IT managers about the costs of enterprise support. App Store developers writing programs for personal use cannot afford the enterprise business model, so they charge customers upfront. Customers willing to have bugs fixed and features added should be prepared to pay in advance, and they generally are.

This is the reason why I gave up the idea of $0.99 application paradise. I raised the price to $1.99 (and should have raised it at least to $2.99) because I don’t want Mobile Lines to become abandonware. I want to support it as well as I can for as long as people use it. The minimal price multiplied by the sales volume just doesn’t let me do it. If App Store starts to actually promote all apps, I think I will be able to reconsider.

Problem #3: FUD

When I ask myself what’s next, I don’t know. Even if nobody buys Mobile Lines from now on, I will still support it. One update is already being reviewed for the App Store, one more is in progress.

Let’s be honest. On the one hand, I cannot just say, “Fuck it, I ain’t getting millions”, make it free and forget it. Every once in a while somebody writes me an e-mail, asks questions, suggests new features or reports a bug, as they would with any other commercial software. People don’t really care how well I’m doing financially, they have paid for it, they have every right to expect help when needed. Making it free at the expense of support would not be particularly honest with them. Abandoning the application development would not be honest with myself, because I have my own personal interest in it. So, killing Mobile Lines is out of the question, period.

On the other hand, I realize that I cannot devote too much time to a loss-making project while I have a lot of other things to do, and when I say “a lot” I mean fucking many. Among them is another iPhone application in a late stage of development. I wonder if I’m going to have two loss-making products.

They call it FUD. Living in either fear, uncertainty or doubt is probably the second worst thing after living in hunger. Working productively in such circumstances is next to impossible. Now take one more look at the App Store and tell me how many of its 10000 applications are a cause of their developers’ headache? There is no way in hell this can last forever. Sooner or later developers driven to despair will start bailing out, unless something radically changes.

Me? I’m still hoping. And hope dies last.

Posted on Friday, November 28th, 2008 at 15:34 under Coding, Miscellany, iPhone.
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