One of the reasons I was dragging my feet is because I have a ton to write about on this topic, and kept flushing out bullets that I could later expand on. As you will see the bullets kept coming.
The other reason is that I wanted to give my Apps more time to simmer in the iTunes App store so I can also report on performance as well.
My goal is to detail everything I have learned about this process in this post and share with you all the tips, lessons learned, success strategies and my failures so that you can immediately take action if iPhone Apps are something you want to try out.
I know that Apple is going through some adversity right now and faces questions about its next innovation. Many “experts” are also saying that other brands have caught up and Apple has lost some of its edge. That said, the iTunes store is STILL the single largest repository of mobile phone applications online.
It will take years before anyone else catches up. Because of this, I will continue to focus on growing my iPhone App portfolio. As of the time of this post, I have 2 more Apps in testing stages will I will report on hopefully a lot sooner than the first two.
It was several months back now that I decided to explore the opportunity to establish yet another stream of passive income through iPhone Apps.
You can read about my initial announcement here.
Why iPhone Apps? To further diversify my streams of income, as well as because I find smart phone Apps intriguing and fun.
And before I go further, there are two very important things I want to get out of the way:
1) I am not a programmer or a developer, and I will go over how I was still able to create and profit from iPhone Apps later in this post. This initiative has been profitable for me, and I hope you can replicate the same in your business if you are thinking about the iPhone Apps space by leveraging the information and approach I have already learned and experimented with.
2) If I can do it, so can you. This is an understatement. If you have an idea, you can definitely make the iPhone App business work for you, even if you launch just ONE App. I personally know 2 individuals who work full time, who each have just 1 App in iTunes. Both are making north of $1,500 from that one App alone each month on a passive basis.
Anyhow, I decided to give it a shot and thought what’s the worst than could happen? It turns out that the business is doing very well.
I had set a goal of 2 iPhone Apps by the end of 2012 and I met my goal. I was able to release one paid App, and one free App that generates income from the iAds network (Apple’s iPhone advertising platform – more on this below).
Since launching the Apps, I have already helped a couple businesses do the same by developing Apps specific to their customer needs, and as a result of the continuing demand and the feedback I received from “clients”, I have added this as an ancillary service offering of my SEO firm. We are already seeing some interest in this space as well. More on this later.
I have randomly posted news snippets, snapshots of my Apps’ earnings, downloads and traffic reports on my Facebook page, but I will detail a lot more about the process here in this comprehensive post.
You can check out my Facebook fan page archives here to see what I’ve posted in the past.
Aside from the fact that I am intrigued and find smart phone Apps fun, Apps appeared to me as a natural way to expand my passive income portfolio while diversifying my income streams at the same time.
And although the iTunes marketplace is saturated, it is less so relative to some other platforms – for example, starting a website on a niche topic on which there are likely tons of others already.
Like anything else that is new, this initiative presented a new thrill, new excitement, new learning and experimentation opportunity for me. Similar to what I have done with websites, the plan was to replicate success if there was to be any hint of initial success, which I can gladly say is there based on what I am experiencing so far.
I also liked the idea of experimenting with SEO on Apps to see if the two can be somehow married to realize any benefits. I presumed most Apps out there are not marketed with this perspective.
Of course, I had no idea of how to market an iPhone App the way it’s meant to be but learned a few effective strategies along the way which I will also share below.
In a nutshell, I did the following (the App specific details pertain to my first App, which is a paid App):
Sounds simple? It is. It really is, but it does take some time as you can imagine because of the steps involved in the process.
Most of these tasks were outsourced and there are more than enough resources out there to help you get all the way through this process from end to end.
You can check out the resources I use here.
Some of the steps above are self explanatory, while others need further elaboration. Let’s go through some of these in detail.
Like anything else, when you are contemplating getting involved in something new, it is prudent to do your due diligence and learn as much as you can about the industry, the products, services, competition, nuances, etc.
This is exactly what I did. I wanted to get a feel for how Apps are developed to maximize the effectiveness and efficiency of user interface and experience.
The more important aspect of it was to learn about the unknowns in this territory, preferably from someone who has been there and done it. So I asked around and most referrals pointed to the Free the Apps book, which is a book written by two guys Michael and Quoc who managed to establish an $800,000 a year business making iPhone Apps without having programming background like myself.
I gravitated toward this resource naturally and while I didn’t learn everything there was to learn (I will discuss everything I’ve learned below) , I picked up a whole lot of wisdom and clarity about the process. I can for sure say that I was a lot more comfortable approaching this initiative after having read Mike and Quoc’s book.
Comfort is important. I can tell you that had I not been comfortable after reading this book, I likely would not have moved forward with this project. I would have either given it up completely, or picked up another book or two to reinforce my decision, whatever the decision may have been.
I highly recommend this book if you are interested in earning income from iPhone Apps (affiliate link).
I literally designed my App on a piece of paper with a pencil. When I was done, I had 8 pages of back to back sketches laying out the App. This was a long, but real fun process for me as I was envisioning the App in works before my eyes.
When I say “design”, I am referring to what each screen contains, how it looks, the placement of objects and how it flows to the next screen and so forth. I cannot emphasize how important details are here. As I was going through this process, I had a Microsfot Word document open in parallel where I was typing notes to the developer.
For example, I would label my first drawing “screen one”, and then label a heading on the document called “screen one” as well and type out my instructions below it. It is important to be very clear about every single little thing or your developer will end up either guessing or not doing anything. This will blatantly show when you test the initial development of the App.
For example, if you want a screen to appear after performing a certain action, be sure to indicate how many seconds you want that screen to be up, what kind of music/sound you want playing while the screen is up, what sound should the App make when the screen flows over to the next screen after however many seconds you specify. You need to be very detailed and rigorous carrying out the process if you want to minimize any issues on the back-end.
I chose to approach the App design this way the first time around. For my second App, I drafted the design and flow electronically (a process called wire framing) using a tool called Mockingbird. You can see a list of free wire frame applications here.
Once the process flow design was complete, I outsourced the images and design elements of the App. I hired a freelancer on Elance to do this. At the same time I also hired a iPhone App developer to get started on the App development, also from Elance.
The reason I chose two separate professionals is because developers are not necessarily good graphic designers and vice-versa. High quality imagery and design can be critical to an App’s success and I wanted the best for mine.
I have been using Elance for a few years now, mainly to find developers/programmers for my websites and occasionally content writers. I love the platform, the ease of use as well as the escrow system in place to ensure both parties are protected in a given transaction.
The rules tend to favor the customer (you) so it’s very safe to use. It also has a review and rating system so you know the quality of the freelancers well beforehand. You can also view a portfolio of each freelancer’s past projects.
When using Elance, you specify the project needs and instructions and several freelancers bid on it. You then select one based on price, experience and previous reviews other customers have given them from past projects. You can read more about Elance here.
Couple tips on selecting a freelancer:
1: Lowest price isn’t always the best. Consider the language barrier potential if you are going to hire overseas to save money, previous work experience and quality, review and rating given by previous clients, etc. Evaluate the whole package. It’s not worth losing time and getting frustrated in exchange for a couple hundred extra dollars. I’ll talk more about cost of App development below.
2: If you are worried that the freelancer will run away with your idea (which is really nothing to worry about in my opinion as most freelancers on platforms like Elance do what they do for a living and have their reputation to protect in the industry), search for an NDA on Google. An NDA is a “non-disclosure agreement” that you can have the freelancer sign if this gives you more comfort.
While my App was being developed, I created my developers account on iTunes called iTunes Connect and at the same time created a support site for my iPhone App as well as a website for my iPhone App company where I was going to display all my Apps.
I didn’t have to do this, but chose to do so for various reasons, mainly the ability to optimize and promote the website to drive traffic to it which potentially could lead to App sales.
Several months into this initiative I know I made the right decision. More on search traffic and sales results below. Once the App was developed, I submitted it to iTunes through my developers iTunes Connect account. Note that you need a Mac (Apple computer) do to this.
Tip: When submitting an App, always specify a live launch date well into the future. When you get notice of App approval from Apple, go back into your iTunes Connect account and change the date to the next date/day after receiving approval notice. More on this below and why this is very important to do.
If you are curious about the support site, I used Appify, which I feel is the best turn key solution to a customized support site specific to an iPhone application. It’s working out great for me (affiliate link).
Step 10 (Marketing) is a big one so I will save that for the end. In Step 11, I incorporated my company so that this part of my business is completely separate from everything else that I am involved in.
Tip: The reason I did not do this upfront is because it takes a lot longer for “corporate” accounts to get approved by Apple relative to individual accounts. However, once you have an individual seller account approved in iTunes, you can subsequently convert it to a business/corporate account and the process is a lot faster.
The Apple developer support personnel were very helpful when I transitioned from a personal to a business account. They were always just a phone call away. I recommend this approach if you plan on establishing a business account in iTunes.
One of the more common misconceptions about Apps is similar to opening a brick and mortar store in that once you build them and get them on the App store, sales will come flooding in. This may work in some rare cases, but for most Apps, you need to engage in active marketing if you want to generate a significant volume of sales.
If you don’t market your iPhone App, your App may go totally unnoticed (a very rare situation as well), generate low to moderate level of sales (a more likely event given the nature of the end user behavior) or go viral (very rare but it does happen). The best course of action therefore is to engage in some level of marketing, monitor the results and then make a decision going forward from there.
You may decide that after a couple weeks of marketing initiatives you want to lay off and move on to your next project. This is fine too. Again, engage, monitor and decide. There is nothing more effective than testing.
Here is how I marketed my first couple Apps:
Just as I promote my websites, I did basic SEO on my Apps. I started with keyword research to come up with words I wanted to target, and then used them strategically on the display pages of the Apps on iTunes as well as the support website that I established for each App.
The display page of the App in iTunes is where you can read all about the App before downloading it. It looks like this.
The support website is like any other content website, therefore also optimized like any other content site. I focused on the same key elements when optimizing both the iTunes display page and support site that I focus on when optimizing a static website.
Some of these include the keywords, title, and the body or content itself, as well as some basic back link building.
I also created a Facebook and Twitter account for my iPhone App company. I synced my Facebook account to the support site so that all updates to the site automatically posted on Facebook using the RSS Graffiti Facebook App.
I then linked my Facebook account to Twitter using the Facebook to Twitter App so that all updates to Facebook auto post on Twitter.
I also used a really cool and automated approach to solicit Twitter follower who have interest in the subject of my Apps and what each does. This has been an excellent way for me to drive traffic to and get more exposure for my Apps mainly on auto pilot.
And as an extended note, I also use this method to reach out to new visitors and readers for my blog and websites. I can manage to do all that easily because of the automated nature of how the process works. You can read about my method here.
In my opinion, having a video demo on an App is almost a no brainer because the nature of how Apps work. As a potential user, watching the App “in action” helps a lot and can brew enthusiasm and interest.
Of course this will depend on what your App does and who it is for, but for most Apps, I think video marketing can go a long way. I know from reviewing my site analytics that the referral traffic to my App support site coming from various video channels is quite robust.
If you are going to go this route, YouTube is the first site that comes to mind. Definitely post a video of your App in action, or at least a part of it if you don’t want to give it all away on YouTube, but also explore other video platforms such as Vimeo and the likes.
If you Google how to take a video of your App while using it on your iPhone, you will find several videos that walk you through how to do that. Some involve Jail Breaking your iPhone, but there are ways you can take a video of your App in action as it is being used on your iPhone so that viewers can get a true feel for it as if they were using it first hand.
I use One Load, an offshoot of the old Tube Mogul which is a video syndication service that allows me to automatically distribute my App promo videos to multiple channels instantly. This tool has delivered some great results for me.
I use Camtasia to record my videos via screen capture of my computer monitor. They have a free trial period you can subscribe to initially to get a feel for how it works.
This one is a hit or miss because you never know how it will perform. Nonetheless, when my Apps went live, I was given some free download codes/coupons by Apple (you get 50 of these each time a version of your App goes live on iTunes).
I had my virtual assistant reach out to relevant App review bloggers and websites and send them a templated email message that I had drafted requesting a review in exchange for the free download code.
I also had her post about the App in relevant blogs and forums. If nothing else, these activities may generate some back links to the App support site.
This is not fluff and just on the list because it’s an easy check mark, so make sure you consider this. Here is why. The first few reviews an App gets are critical.
Crowd theory and behavior pressure all subsequent reviewers to cooperate with those before them. Psychologically speaking, the initial few reviews (given they are consistent) do a lot more to one’s psyche than we may think.
Before your App goes live, have a few family and friends lined up to download, rate and review your App. Rating and review activity also show potential buyers that the App is being downloaded by others and that it’s not just another dud (majority of Apps are duds). Always have a few folks ready to fire off ratings and write reviews when your App goes live.
Who better to ask for favors than close family and friends? I had 10 five star ratings and stellar reviews within the first couple days of releasing my first App. One simple message to my Facebook page was enough to do that. I thanked each of the 10 individually after the fact.
Don’t limit yourself to traditional and conventional methods of marketing online. One of my Apps is in the fitness niche, so I got some T-shirts designed and ordered them online from Cafe Press in various sizes.
I sent a bunch to my friends and handed off others locally to folks I know that participate in this particular type of fitness activity. I asked them to wear it when they work out.
I did the same whenever I went to the gym. In fact this is how I got one of my clients. They asked me about it after seeing the catchy design. This led to an App development project for my SEO firm.
Two weeks after distributing the T-shirts, the direct hit traffic to my App support site increased noticeably. There could have been many other factors causing the traffic spike, but I think having the URL on the T-shirts definitely helped. Who knows?
I just wanted to get a bit creative. If you have the budget to spend on similar marketing initiatives, why not give it a shot and see what happens?
When you adapt a shot gun approach to something, you never know what is going to hit and what’s going to miss. In the event something hits, you want to maximize the benefits from that hit. It’s really the core 80/20 Pareto principle that’s at work here.
Just as those who own several web properties interlink them to each other, you can do something similar when you have more than one iPhone App. Here are two ways I do that:
1) I credit this one to my good friend Pat who does this with his Apps. When developing each App, I instruct the developer to include a “More Apps” link on key screens of the App. In addition, I have a link to the App support site in the “About” or “Instructions” screen of each App.
Users click this for various reasons, many simply because of curiosity similar to how I click the same links on other Apps I use. Adding such feature can get your other Apps more exposure no matter which App the user downloads first.
2) I created a central website for all my Apps. This is my iPhone App company website, wherein I showcases all the Apps and have all sorts of other relevant and interesting material for readers. This site is also optimized for search engines and brings in a fair share of traffic.
Tip: When using links in various initiatives, consider using a link management program that allows you to track the type of traffic/clicks you are getting. Tracking analytics help fine tune your approach to get better results and more effectiveness going forward. For example, you can measure changes in traffic by changing what pages or screens the links are placed on, or by changing the directional placement (location) of link on a given page or screen. I use the Thirsty Affiliates (affiliate Link) program to do this. You can read my review of Thirsty Affiliates here.
Great, this is a lot of information so far. You must be wondering about the cost of development of my Apps, the effectiveness of my marketing methods and a lot more. I will share some numbers and results from my efforts below:
Let’s start getting into some of the details.
Initial Budget and Timeline for App #1
Initial Marketing Plan
My budget for marketing, outside of salary to my virtual assistant (a sunk cost that I incur every month anyway) as well as some basic tools and services here and there was pretty thin. I wanted to exhaust all the free resources I knew about and later exercise my wallet muscles but only if I felt it made sense.
This was my first App so I didn’t really know whether what I was doing would work. If you have any tips and suggestions on marketing my App going forward, I’d love to hear from you in the comments section below.
Shortly after development I submitted my App to Apple. Weeks later (no kidding), I received a message from Apple in my inbox indicating that my App’s binary (submission file) has been rejected. This is what the message looked like:
Disappointing to say the least, but not the end of the world. Upon reading further Apple wanted me to make a minor change to the UI – “user interface” by eliminating the Exit option on my App’s menu screen. So I had the developer make change, tested the prototype and resubmitted the App within half an hour. What a bummer, another few days until I hear back I thought to myself as the App is in review status again. There is a first time for everything.
Lesson learned: Apple does not want you to give your users the option to “exit” a program. It is no wonder you always have a difficult time leaving an App for good before moving on to the next. The only true way to close the App is to hit the Home button on your iPhone twice and delete/or stop the Apps from running manually. Painful if you ask me, but that’s just how Apple likes things to be. This is a BIG battery drainer.
Their rejection messages reads that Apps must be able to save information on an ongoing basis. This is the rationale they provided for why they have their policies the way they do. However, what if an App saves a user’s actions real time and still provides an easy way to exit the App upon the user’s wish? Apparently that is a no-no with Apple.
It did not take another couple weeks to hear back. I heard back within hours. I guess they were working on my account in real time as I was making the revisions.
When I submitted the App initially, I specified a launch date / release date a full year in advance (ahead of time). Once it was approved, I logged back in to my dashboard and moved the release date to the day after I received the notice from Apple of the App’s approval.
I did this because the App goes live in the iTunes store 24 hours after its release date, and since Apple doesn’t clarify the time stamp on the release date, I wanted to play it safe by letting close to a full 24 hours lapse after their notice to me before releasing it for sale in the store.
The first 24 hours of any new App’s availability for sale in the iTunes store are the most critical. I will share why in a bit.
As difficult as it is to get an App approved by Apple’s picky staff, getting a brand new App approved in Apple’s iTunes stores is just the beginning. With an ever growing (saturated) pool of Apps (and only getting worse), how does your App find its way to the end user?
As I am quickly learning, it is difficult to promote an App to get it the exposure it needs to do very well. Note that when I say “very well”, I mean generate a significant amount of income.
Even if an App doesn’t accomplish this, it can do well enough relatively easily to where it recoups its development cost and starts paying you back profits. I just want you to know that the effort is worth it. This is why I will continue to build my iPhone App portfolio over time.
But there is one very easy and quick thing you can do to maximize a brand new App’s exposure on iTunes. Before discussing this, let’s first go over what not to do.
When first submitting an App for review, Apple will ask you the anticipated release date of the App. Many developers try to guess when Apple will make a decision (it usually takes a couple weeks before Apple can get back to you).
Apple often times takes much longer than anticipated to approve or reject an App, especially if they need you to make modifications which further prolongs the review time period. I received one of those emails as well when I initially submitted our first App for review (see image above).
With all that going on, let’s say you specified a release date of January 30, but Apple doesn’t get around to approving your App until February 15, then they will make your App available in iTunes with a retroactive release date of January 30.
You don’t want this to happen. Why? Because when an App is first released, it appears on the first page of “New Apps”. It also appears on the first page of all the Apps in your app’s category. With each passing day, the App gets pushed further down the list as newer Apps are approved and newer release dates take precedence.
So despite your App being new, an earlier release date specified by you will cause it to get “buried’ in the archives. There goes all of your free exposure. The first 48 hours of an App after its release are the most critical, providing you don’t succeed much at marketing it afterwards (this is the case with majority of the Apps out there).
Here is what you should do . . .
As I mentioned earlier, when submitting your App, specify a release date well into the future. When your App is approved, log on to your developer’s dashboard and change the date of the release to the date your App is approved, or the very next day.
How do you know? Apple sends auto notifications as your App moves through the review process, from submission, to review, to processing, to acceptance or rejection or more changes / modifications needed.
When you do this correctly, you will notice your App as the number one on the list of new Apps in your chosen category. This is exactly what you want happening.
This entire process takes 2 minutes at best, but will ensure your App gets maximum exposure for free when it first comes out. You never know who is looking around the App store at any given time – why risk the possibility of not being seen when you can easily ensure you are.
I went into iPhone Apps without expecting to turn profits until at least after the first full year of an App being live in iTunes. I’d rather be conservative than aggressive when it come to estimates. Both Apps far surpassed expectations.
Bellow are the results from the day 1 sales of the first App on iTunes. Note that this is a paid App that is sold for .99 cents. Apple keeps a 30% royalty share, remitting the rest of the 70% to you as the developer.
So 18 total sales on day 1! Not too shabby for something mostly passive in nature once the App is live, which is what I was going for. The key question at the time was whether the trend will continue?
This depends on how well the App is promoted I suppose, as well as what breaks I catch. You never know who sees the app and decides to get it in front of a large audience.
Here is further breakdown of the day 1 sales in iTunes.
Pretty cool stuff.
What’s encouraging is the source of purchasers.
5 different countries. Woohoooo – I am going Global!
So how much do I pocket? If you decipher the breakdown report above, you see that Apple keeps roughly 30% of all App sales, which means for a .99c App, I pocket .693 cents per sale.
That’s it, I am quitting everything else to focus just on iPhone Apps.
No . . .
18 sales at .99 = $17,82 at 70% = $12.474
Extrapolated over a 30 day period = $374 / monthly or $4,490 annually
As I wrote above, my total spend for this App was $3,000, but roughly $2,000 of that was for hardware, fixed sunk costs that I will no longer continue to incur.
Nothing earth shattering, but considering the fact that I have another 16 or so now Apps in the design stages, I am potentially looking at $4,490 at 16 Apps = $71,850 annually
Obviously I took liberty to conveniently assume that . . .
1) All my other Apps will all be just as profitable
2) That the trend of 18 Apps per day will actually continue
But assuming the extrapolation exercise works in my favor, the numbers are not too shabby considering a “set it and forget it” model.
Besides, I entered this space not expecting to get rich. Making millions is not the objective here (although it’d be nice), but knowing that I will not be in the red certainly helps me keep plugging away with this initiative.
Fast forward a full month later, this is how the sales trend was looking:
Almost 150 sales during the first month of launch!
The above chart shows the weekly summary, and the chart below shows the daily summary. What is most notable here is the spike seen in the last 5 days. How and why did this happen? Traction.
It takes time for an App to gain traction. With more marketing and exposure over time, traction increases as do sales. The good news is that I had not done any aggressive marketing at all after the initial wave. That will change and should impact sales in the future.
So 145 sales at 70% (Apple keeps 30%) leaves me with just about $100.
With a net cost of $1,000 to develop the App, my break even appears to be at the 10 month period as of this time. This is ok because I expect the estimated time taken to break even to expedite as I further promote the App.
$100 bucks a month is certainly not money that will make me a millionaire, but if you think about how the money is generated, it is purely passive in that it is not predicated on me working on it after having launched it.
One can argue the ROI (your return on investment) is infinite. $1 in passive income that you didn’t have to work for is $1 you wouldn’t have had otherwise. Read this to get a true appreciation for what one dollar of passive income really is worth.
My goal is to launch several applications, which overtime parlay over each other, potentially creating a reasonably sized snowball effect similar to what I have been able to establish with my websites.
I am looking forward to how it all rolls down the hill from here. I am already seeing some good synergy benefits after launching my second App.
App #2 is a free App that generates income through advertisement. Downloads are averaging roughly 250-ish a day which is equating to roughly $3-4 per day in ad revenue.
Extrapolated over a month, App #2 is averaging $90-$120 per month. This is a much simpler App that was quicker and more economical to develop. The total cost of developing this App was just under $500.
Let’s talk about traffic sources to my iPhone App company website.
Initially, most traffic to the website and the Apps on the site as well as on iTunes was purely through referral traffic coming from sources like App directories, Facebook, Twitter and similar sites.
This means people mostly found it through word of mouth, or reading about it somewhere where someone decided to write about it for some reason It could also have been deliberate link building on my part.
I have been working on some search engine optimization (SEO) behind the scenes and starting to see the effects of that on the business. As you will see in the sales figures below, an increase in traffic has correlated to an increase in App sales. Traffic and profitability are always directly correlated, although conversion percentage may not.
Because iTunes does not provide traffic and conversion tracking functionality, it is difficult for me to track conversions.
In other words, what percentage of my visitors are converting into customers, where those customers are coming from, how they found the site, etc.
Understanding such intelligence allows one to optimize resources on more profitable advertising avenues and cut out less effective mediums.
So here is the traffic breakdown:
Almost 10% of traffic coming from organic search results is a good sign. For a few month old site this breakdown is pretty stellar and I am happy with it, considering very little effort up till this image was taken was made on SEO.
Let’s have a look at where the biggest chunk of traffic is coming from:
These are some pretty cool stats to look at. I had 513 visitors to the site. The average visitor viewed over 2 pages and stayed on the site over 3 minutes.
Again, great results. Anything over 1 minute of viewing time is solid. Almost 63% were brand new visits. Google is #4 on the list of sites that sent traffic to me, with a total of 42 visitors.
Have a look at #11. It is interesting to see that those who found the site on Apple iTunes are the ones that spent the most amount of time on the website. This is awesome.
I deliberately included links on our iTunes sales page to my website. This is a fine strategy. Most developers don’t do this because most don’t have their own web presence.
Thus, the links on their iTunes listing are generic links pointing to support pages. I have the support page embedded into the website. Good move in retrospect.
It is not a coincidence that those coming from iTunes are also the ones viewing the most number of pages on the site, at over 4 pages per visitor.
I mentioned earlier it is easier to get started selling iPhone Apps on iTunes under an individual or sole proprietor account. I started out this way, but knew I wanted my iPhone App business as a separate legal entity.
Your tax accountant and lawyer can tell you all about the benefits and reasons you should incorporate your business separately. If you are going to apply to iTunes as a company, you will need legal paperwork demonstrating that you are a corporation.
You will need a DUNS number (D&B or Dun & Bradstreet) as well as an EIN – Employer Identification Number. You can get these on your own by spending some time researching and applying online, or you can engage a legal professional to help you.
There is one more thing I want to cover in this post before concluding it, and that is the Freemium model (free distribution). My second App is a free App and anyone can download it wherever it is available. Why would anyone spend time and money developing a free App?
There are several reasons. If you already have an existing business, you may want to develop an App that ads to the overall user experience and convenience. This is why one of my iPhone App clients hired me. If you are an entrepreneur, you can still make money with free iPhone Apps by displaying advertisements on your App.
Any platform that gets the attention of viewers’ eyes has the potential to make money from advertising. Just like magazines charge money to display and add on their pages, and websites to display ads online, Apple also charges vendors to display their ads on their applications. So while one revenue model with iPhone Apps is to flat out charge for your application, another is to provide it for free and then display ads on it.
Companies normally pay per add impression and sometimes per add click (when a user/viewer clicks on an add). Each time an impression is served, or an add is clicked, the App generates advertising revenue for its developer/owner.
The success of my free iPhone App will be strictly based on volume of downloads. The more downloads, the more users, the more ads and the more revenues.
So far so good. It is being downloaded over 250 times per day, which amounts to $3 to $4 in daily ad revenue. I am expecting this to increase over time with marketing and promotion.
Most of Google’s multi billion dollars in annual revenues come from their Adwords network, which is an ad network through which vendors of sorts pay Google to display ads. You can read how and where Google makes its money here.
Google turns around and publishes those ads on various private networks such as websites people own. Google then splits the revenue share with the website owner.
Here are how Google ads look like on websites you browse every day:
(Click to enlarge image: Notice the Ads by Google logo on the top left of the ad?)
Similarly, Apple entered the ad serving market by establishing their iAd network.
Here are how Apple iAd network ads look like on iPhone applications:
iAd is not the only iPhone ad network. There are several other alternative. I believe you can also display Google Adsense ads on applications.
I decided to stick with iAds in the beginning because its most convenient and embedded within the iTunes Connect developer’s dashboard that I am already using. I may decide to experiment with other platforms down the road.
But the concept with iPhone App ads works the same no matter what ad platform you are using. Each time a website is viewed, or an App is used, it generates an ad impression, which can also lead to a potential click through (pay out rates are often times higher when someone clicks).
Where did I get the idea to try something like this out?
From my information based websites that generate passive income through the display of Google ads. I took this successful experiences with the web based model and decided to try it out on iPhone Apps.
I am hoping this turns out to be a successful experiment as well. So far it is. If you are interested in seeing some of my earnings from Google Ads you can view them here.
My total cost of developing the free App, not including my minimal time involvement was just under $500. The App took approximately 3 months to develop, test, fix bugs and get approved in the Apple iTunes store.
The App is usable on both the iPad and the iPhone.
TIP: Remember, you can make money with free iPhone Apps as well as paid iPhone apps. Don’t discount free Apps right off the bat without trying them. Something that is offered for free will likely get many more downloads as we are seeing in the initial stages of our new free iPhone App already.
Loaded question, and the answer can significantly vary on quite a broad spectrum.
As with many industries, products and platforms, the first mover advantage has a lot going for it. The iPhone App space is quite saturated today, and will be more so tomorrow.
That said there are still new Apps that come in and become very successful. There will likely be many more in the future as well. Generally speaking however, doing well with iPhone Apps is a bigger challenge today and will continue to be.
That said, if you have an idea you believe people will like, try it out if you have the budget. Don’t go into iPhone Apps simply for the profits because it is a rough and tough field to play in.
You will be competing against some giants out there. Get into it for the fun (they really are) and the excitement that comes with the process. Can you be profitable? Of course.
If your funds are limited, contemplate other potentially more higher ROI initiatives. Just like blogging isn’t for the desperate, neither is developing and profiting from iPhone Apps.
There are a lot of variables beyond your control, and competing in a super saturated space, especially one where large corporate giants are playing in as well, is just too unpredictable.
But sure, keep your paycheck as your bread and butter and dive into iPhone App projects on the side if your situation allows it and appetite calls for it. It’s fun and you will likely end up making a few extra bucks on the side every month.
You can tell how excited I am about this new initiative. I certainly had not planned this post to be this long but screen space flies when you’re having fun.
There are several tips and strategies in this post that have worked well for me. There are also several lessons that I have learned along the way.
If I were to extract one main message from this post about my journey however, I’d say that it is that “there is a way where there is a will”.
We live in a time where and when we can do pretty much anything we want and have all the knowledge, training, tools and resources readily available at our disposal. I am not a programmer, nor did I know anything about developing, marketing and profiting from iPhone Apps when this process started just about a year ago. Yes I should have published this post much earlier.
Today I have my own small iPhone Apps company and a couple Apps live on iTunes, both of which are doing very well. I have also learned repeatedly that more you pout yourself out there the more opportunities will come knocking on your doorsteps. As many have said before – “I love luck and getting lucky, and find that the more I try the luckier I get”.
Because of my involvement with Apps and what I was able to demonstrate, I was contacted by a couple small local businesses through word of mouth referrals that wanted an App developed specific to their business and solely for their customers and clients. Because I knew I could facilitate the process I took the offers. I knew I could find developers at every skill level to execute for me.
I really did this for two main reasons – and money isn’t either one. First, I wanted more experience with iPhone App related project management experience and second, I wanted to try out what could become a potential complimentary offering that my SEO firm can offer to its clients. Yup, as a result, our SEO firm now offers iPhone App development as well.
I am currently exploring the opportunities on the Android side as well, but from initial research it seems that there are more nuances, especially with customization, modification and compatibility with the various phones that use Android, that can make the process more challenging. Let’s see where this research takes me in the near future.
So there you have it 8,000 or so words later. I am not a programmer but I did it. You can do it too. Anyone can do it. I am not making millions, but iPhone Apps have been profitable for me and will likely continue to be over time as they mature and I develop and cross sell more of them. I also have a new service offering because I put myself out there yet again through this brand new experience. Most important of all, I am learning, growing and enjoying the entire process.
You really never know unless you put yourself out there. It really just takes one good idea to propel you – just think Angry Birds and the likes – but even if you don’t reach that level, take comfort in knowing that you can still do fairly ok. But you’d never know that until you take action. Who knows what your actions can lead to in the future?
There is more than enough information in this article for you to take action if you choose to. I hope you do, and I’d love to hear all about it so please let me know of your progress.
I’d also be happy to answer any questions or concerns about iPhone Apps, my process, or anything else you have in mind in the comments section below.
If you want to read more about the iPhone App development business, please let me know what specifically you want me to share with you in the comments section below.
Finally, I’ve put a lot of time, thought and effort in writing this article. If you enjoyed the article and found it helpful in any way, I’d appreciate it if you could help me spread this article by liking it or sharing it on Facebook or Tweeting it through Twitter.
All the best and make sure you drop your questions and comments below.