App Stores
Is the hype real?
Michael Yuan, PhD
Ringful LLC
michael@ringful.com

Who am I?
• Co-founder of Ringful
– Voice and SMS mashups for web and mobile apps
• Eg Facebook Voicetag and Two-factor Auth
– iPhone application development
• Pollen Journal, iConference, MultiMedia Messaging, etc.
• A top 100 free app, a rejected app, a top downloaded Cydia app, and
everything in between!
• Author of 5 books
• Frequent speakers in national conferences
• Contributor to several open source projects
• Have a background in enterprise and mobile Java
• http://michaelyuan.com/

The Hype
• iPhone App Store
• Android Marketplace
• Blackberry App Center
• Palm App Catalog
• Symbian App Store Ovi
• Windows Mobile SkyMarket
Device / Software vendor branded app stores

On deck déjà vu?
• App stores have been around for almost a
decade – carrier branded “on deck” offerings
• Difficult for developers
– Hard to get approval
– Porting across legacy devices is a major issue
• Difficult for consumers
– Difficult to find apps for your device
– Deceptive recurring charges on phone bills
Most people just download 2-3 apps when they get a new device
and never bother again after their first bill

A new kind of app stores
• Apps written for and marketed toward a
specific type of device
• Integrated discovery and billing experience
• Cross carrier international reach
• Apps have to be approved
– Yes, even the “open” Android market does this
• One time fee with free updates
• Store operator takes 30% from the top
– A very good bargain for the services provided

Ease of payment
• World wide one click shopping
– Credit card / gift card already in iTunes store
– Google checkout
– Carrier billing?
• Buy on the device or on the computer
• Even ridiculous apps have buyers
– “I am Rich” sold 6 copies

Does it work?
The case of the iPhone app store
• 20,000+ apps got approved in the first 7 months
• 500 MILLION downloads in the first 6 months
• Best sellers can see 10,000+ units of sales EVERY DAY
• Several apps have already broken the $1M revenue mark
• Very impressive growth (Source: PinchMedia):
– 3mo ago: the #25 app gets 11,000 downloads per day
– Now: the #25 app gets 20,000 downloads per day
• Developers in extremely hot demand even in the current
down market
• Web sites now have both iPhone web and SDK apps
– New York Times, Facebook, Digg, Amazon and many more

The tale of a developer
• News paper headline: “iPhone game saves a
family’s home”
• Ethan Nicolas – 30-yr old programmer at Sun
– Build an iPhone game at nights and weekends
– Climbed to be #1 in paid app list
– Makes over $37,000 per day at the peak
– $700,000 in profit in 3 weeks
• This kind of success is not that uncommon!
http://www.newsobserver.com/front/story/1413551.html

App store marketing
• Conventional online marketing has not been very
successful
– Blog / news stories
– Advertisements
– Lack of referrer tracking
• App store itself is where people discover and buy
applications
– Try to get on various lists
– Frequent update helps drive sales
• Word of mouth

Blockbuster vs Longtail
• Blockbuster – get into the top 25 list
– Typical stay time is several weeks
– Do whatever you can to stay on that list
• Drop your price to 99c if needed
• The complaint about “ringtone apps”
– Only takes one hit to make you “rich”
• Longtail
– People find it via search
– Could be 10 to 500 downloads per day
– Stable, steady income while you work on the blockbuster
– Price high for niche market

Free versus paid
• Free apps get 10x more download on average
• They also get used less and generate bad reviews
– Everyone who downloaded the app can bitch about it in the review
section
• Advertisement options
– Admob: Most ads are to drive people to buy paid apps in the app store
– PinchMedia / JumpTap: Brand / display ads
– Other per-click ads models not yet proven on mobile
• Ad-supported model does NOT work for most apps
– Around 1% click through
– 25c eCPM
– Need to carefully study analytics before making your app free

When does FREE make sense?
• Lite version of your paid app to drive sales
– Trial is a known way to generate sales
– iPhone app store does not allow trial / demo apps
– Android Market has a one-day return policy
• Free app that charges outside of the app store
– Eg. RTM, Jott
• Apps that are designed to promote something else
– Fring, New York Times etc.
• Tricky to navigate the approval process

Is the approval process as bad as
they say?
• The process
– Takes 2 weeks for a new app to get approved, Takes about 4-5 days for
each update to get approved
– No undocumented API access (cover flow …), no background
processing, no breaking out of the sandbox
• The bad
– Unconventional apps could be put on a back queue for lengthy review
– No visibility to the process
• The good
– They do catch bugs for you! Esp subtle UI inconsistencies
• Android?
– Probably the same opaque process
– But it allows distribution outside of the Marketplace

Opportunity for developers
• “I have an idea for an iPhone application”
– The financial gap between idea to app
– Good developers can turn ideas to apps on
personal time
• The good old consulting business
• Take initiatives in your own company

What’s involved
• Sign up to the iPhone developer program
– $99, background check
– perhaps 1-2 months wait
• Develop your application
• Submit it to App Store
– The review and update iteration
– This is the biggest uncertainty in the process
• World wide distribution
• Sit back and watch the money roll in 

Is Cocoa really as hard as they say?
• Objective C
– Somewhat weird but futuristic language
– Not all that different from Java if you know the
jargon
• Cocoa Touch framework
– A lot of familiar design patterns
– Very nice UI designer
– A lot of “convenience” methods added over the
decades (think PHP)

Can I distribute the app to friends?
• Yes, you can do ad hoc distribution
– Requires their device ID
– Digitally signed by the certificate issued to you by
Apple
• Or, use the “promotional code” program in
the App Store

Thank you
michael@ringful.com