With the proliferation of smartphones and mobile devices, apps have emerged as an integral part of the new tech economy. Some apps help people manage their finances, and some provide up-to-the-minute news of the world. Others act as a GPS for navigation, allow users to shop at their favorite stores from their phones, take pictures, send messages around the world, find somebody to date within a five-block radius, or find the best nearby bar or restaurant.
Whatever you can think of, there is probably an app for that. The good news for both kinds of apps is that people use them a whole lot. ComScore's Mobile App Report for the year found that approximately seven out of every eight minutes spent on mobile devices is app related.
The bad news is that ComScore also found the majority of mobile device users download no new apps each month. There is, however, a small set of around seven percent of smartphone users who download apps like crazy, accounting for nearly half of all monthly downloads. Apps can be a huge source of profits. These days, there are thousands of developers working independently, with start-ups, or with established companies to come up with the next big app.
The competition to develop a successful app is fierce, and there's no guarantee that even a well-executed, great idea will catch on and bring financial success. Even though some apps have made millionaires out of their creators, most app developers will not strike it rich, and the chances of making it big are depressingly small.
In fact, less than one hundredth of one percent of the millions of apps that are available will benefit from any sort of financial success. That said, before breaking down the bleak prospects of most app developers, let's look at some of the notable success stories.
First, it is worth noting that the most popular apps rated by unique visitors per month are owned and operated by large technology firms. Some companies have been developed for the sole purpose of creating and marketing apps. Storm8, a competitor of Zynga reported more than million unique downloads last year.
There have been a few instances of small apps generating big success and making their creators exceedingly rich. While those valuations and sales numbers may seem encouraging, don't be fooled: And that doesn't account for the money, time and effort invested in creating those apps.
With those small revenue potentials it is hard to build a team of developers and create advertising and marketing campaigns to increase recognition and the number of downloads.
There is also a huge amount of competition. For every category of app, there are numerous options to choose from and making yours the one to gain traction can be hit or miss. On top of all that, even with a hugely successful app there is no guarantee that it will be able to produce a profit.
It is increasingly difficult to monetize activities that many people have come to expect to be free such as messaging, social networking , photo sharing, and cloud storage. And success itself may be fleeting.
King and Zynga saw their IPOs generally flop and their stock prices suffer over time. Apps of all kinds have become ubiquitous, and the majority of mobile device owners use multiple apps daily. Some apps have become hugely popular leading to success and wealth for the developers, bringing in millions or even billions of dollars. These success stories, however, are the exception and not the rule.
The unfortunate truth is that most app developers will work hard to create the next best thing while barely scratching by in a world of ever-increasing competition and a consumers with short attention spans. Dictionary Term Of The Day. A conflict of interest inherent in any relationship where one party is expected to Broker Reviews Find the best broker for your trading or investing needs See Reviews. Sophisticated content for financial advisors around investment strategies, industry trends, and advisor education.
A celebration of the most influential advisors and their contributions to critical conversations on finance. Become a day trader. Successes First, it is worth noting that the most popular apps rated by unique visitors per month are owned and operated by large technology firms.
The challenges to becoming an app millionaire While those valuations and sales numbers may seem encouraging, don't be fooled: No thanks, I prefer not making money. Get Free Newsletters Newsletters.More...