Anatomy of an iPhone App

We’ve all been following the explosion of the iPhone application platform.  It’s been a bit of a land rush.  At this point, there are over 36,000 applications available in the iPhone App Store.  Although application developers are allowed to keep 70% of revenue, it’s very difficult for a new application to stand out from the crowd. 

I recently chatted with local developer James Pozdena, founder of Poz Software.  Like many new iPhone developers, James is experimenting (and hasn’t quit his day job).  He just launched his first application called Make Me Talk.  It’s a fun novelty app that allows you to upload a photo and make it speak (similar to those corny Conan O’Brien interviews).  It sells for $0.99 (give it a spin, it’s pretty cool).  He’s currently working on a more robust location based application employing SMS push notices. 

Interestingly, his initial version of the application was rejected because he used a photo of Obama as the example.  He was told that Apple would not accept the app because it disparaged a public person (wow).

As with most app launches, there is no promotional plan.  It’s a build it and (hope) they will come approach.  James says: “I’m not sure [about marketing]. I love creating the products. But don’t really have any good idea about how to market them.”  (If there are any interested marketers out there, you might shoot James an email.)

I was mainly curious about the economics of throwing an iPhone app out there.  Here’s what the break even analysis looks like.  It’s not hard to imagine hitting the break even point almost immediately.  Unfortunately, most applications simply aren’t found.

iPhone break even

There clearly is an opportunity to turn iPhone app development into a very interesting lifestyle business.  However, it’s unlikley to work without a very well thought out marketing plan.