The iPhone Gold Rush
IS there a good way to nail down a steady income? In this economy? — Try writing a successful program for the iPhone. — Last August, Ethan Nicholas and his wife, Nicole, were having trouble making their mortgage payments. Medical bills from the birth of their younger son were piling up.
Context & Ripple Effects
A February report of a developer earning more than $500,000 had already established that iPhone software could produce outsized rewards for individuals. This account gives that earlier developer windfall a household-level economic stake, as Ethan and Nicole Nicholas face mortgage and medical-bill pressure.
The opportunity sits alongside evidence that Apple’s handset and iPod touch were becoming credible gaming rivals to Nintendo and Sony, broadening the kinds of software developers could try to sell. But a December report questioning whether iPhone users were willing spenders also makes clear that developer income depends on reaching paying customers.
First-order effects
- A successful iPhone program offers Ethan Nicholas a potential income source outside conventional employment while his family faces immediate household expenses.
- Independent developers gain a visible proof point that a small software product can reach a large enough iPhone audience to matter financially.
Second-order effects
- More developers pursuing iPhone income will intensify competition for customer attention, making the ability to convert users into buyers more important than simply publishing software.
- Nintendo and Sony face added pressure in mobile-friendly game categories as the iPhone and iPod touch attract developers as well as players.
Third-order effects
- If developer success stories continue, the iPhone’s value shifts from its hardware features alone toward an ecosystem in which outside software creators supply differentiated uses and games.
- The uneven evidence on customer spending points to a mobile-software market where a few breakout programs can coexist with difficult monetization for the broader developer pool.
The trend: The iPhone is developing into a software platform whose appeal to developers and consumers increasingly depends on the prospects for paid applications, especially games.