While I’m playing the waiting game for my first application to be approved for the App Store, I thought I’d talk about what it costs to make an iPhone application. There’s a question on Stack Overflow that talks about it here. There’s cost dimensions to consider here, monetary cost and time cost. First the monetary costs.
Since I didn’t have a Mac, I had to purchase one. The iPhone SDK requires an Intel based Mac with OS X 10.5 installed (at the time of writing this). I looked around Craigslist and other such sites, but with the way Mac’s retain their value, I decided to just buy new. Fortuntely I got an educational discount thanks to my wife. The other major monetary cost is the $99 to join the iPhone Developer Program. Added with a few other things, the total cost is:
- $1350 (Unibody MacBook, with tax)
- $99 (iPhone Developer Program
- $10 (usightread.com domain registration)
For a grand total of $1459. In my opinion, this is an extremely low number for starting a business. If you were starting from scratch in any other business, I don’t see how you could do it for any cheaper. I do get a break because I’m already paying for shared hosting, but that is only $10/month.
Secondly the time cost. This is highly variable depending on the skill of the individual making the application. I started with at least some background in Objective-C, and about 15 years of development experience which I think is a little above average for a starting iPhone developer. I would estimate the total time for creating uSightRead was about 50 hours. That includes the time to learn the Cocos2d-iPhone framework, create the artwork, and learn the nuances of iPhone development. I’d say that I spent at least 15 hours of that creating the artwork (Dammit Jim, I’m a developer not an artist). It doesn’t include the time to work through the my first iPhone sample app from Apple. If you figure about $40/hour for developer time, the monetary value of my time was $2,000.
My initial goal of this project was to break even on the monetary cost. With uSightRead slated to hit the App Store at $1.99 it seems reasonable. After Apple’s cut, my take would be $1.40 except that I still have to pay taxes on that. If I take 0.40 out for taxes, I’ll get approximately $1.00 per app. This makes the math easy and I’ll have to sell 1459 copies in order to cover my cost. Even if you take my time into accunt it’s only 3459 to break even. Only time will tell if this is a profit making venture.
One real time saver (and headache saver) of using the App Store is that it totally eliminates the need to find a distribution channel or deal with payment processing. In other business, you’d have to setup a merchant account, and either handle the payment processing or pay someone to do that. Companies charge anywhere between 1% and 5% for payment processing services (usually on top of a $0.25-$0.75 per transaction fee). Of course Apple takes 30% so you may feel like your getting ripped off, but consider how long it would take you to get a piece of software into say, Best Buy. What percentage do you think they’d take if you could even get it in the store? I think 30% pretty fair for getting your app available to millions of potential customers.
