Monetizing Apps Remains a Major Challenge for Mobile Developers

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The mobile app industry is new and still in its early stages of development, but even at this early juncture, it is clear that monetizing new apps is the single biggest challenge facing software developers. According to the comprehensive Mobile App Developer Survey, conducted in 2013, app monetization ranks alongside social media and cross-platform integration as the most crucial challenges facing software developers.

The survey also found that while the mobile app industry is very dynamic, the revenue they generate is tied directly to the size of a software developer’s portfolio. Consider these facts:

• 100 percent of developers with only one app in their portfolio are earning less than $1,000 per month from their software
• Only 4 percent of developers with two to five apps in their portfolio are earning more than $10,000 per month, while 85 percent of developers with that portfolio size are making $1,000 per month or less
• Of developers with six to 20 apps available, 23 percent are earning more than $1,000 per month
• 56 percent of developers who have released more than 20 apps are generating more than $1,000 per month in revenues, with 8 percent of them earning more than $50,000 per month

This data shows that it is very difficult for mobile app developers to generate significant income from a single piece of software, unless that software is extremely popular or is designed to independently generate its own revenue stream. It also clearly demonstrates that portfolio diversification is directly tied to increased revenues.

Further findings show that 84 percent of independent developers are facing significant distribution challenges, while 82 percent of mobile gaming and app development companies are having trouble monetizing their software. The study also found that of the developers creating software for newer platforms, almost half of them have been in business for at least three years. The more experience an app developer has, the more likely he or she is to venture into new avenues.

As a New York City iPad app developer, I see the community enjoying unprecedented opportunity as the industry continues to grow and change. A sound monetization strategy is absolutely essential for those wishing to generate financial returns from their mobile application endeavors.