Over the years, software development has fashioned itself more and more to resemble the lucrative, gonzo machine that fuels Hollywood, with top talent scoring big deals and even hiring agents. So it was just a matter of time before one of its sectors actually overtook Tinseltown.
In this case, it’s the not-so-small segment of mobile app development.
As analyst Horace Dediu pointed out on his Asymco blog, iOS apps drew in more bucks last year than the movie business. Earlier this month, Apple announced iPhone and iPad developers raked in as much as $10 billion in 2014. Tack on the 30% or so that Apple itself made on top, and the roughly $14.3 billion exceeds the $10 billion or so Hollywood made at the U.S. box office.
The threshold highlights how big the business of mobile apps has become—which is extraordinary, considering there was no meaningful mobile app business prior to 2008, when Apple’s App Store first launched.
Putting The Business Of App Making In Context
That doesn’t mean every app developer makes a ton of money—in fact, according to VisionMobile, 50% of iOS developers and 64% of Android developers weigh in below the “app poverty line,” i.e. making less than $500 per app per month. But at least en masse and overall, the business of stocking Apple’s App Store, with its inventory of more than 1.4 million apps, looks like it’s booming.
Lest Android app makers get left out of the gold rush, Google stepped in a couple of months ago to offer some tips on how to cash in with Google Play and stand out amid its more than 1.3 million Android apps.
Developing for the Android platform is no easy task. These app makers often find themselves mired in testing and debugging for a large variety of devices, a problem that doesn’t really concern your average iPhone app developer as much.
Last year, it looked like the hard work was beginning to pay off: The growing volume of Android devices set the stage for a widening pipeline of funds that could even catch up to iOS. What looked like an inevitability, however, seems a bit less certain now.
The Hard In Hardware
Obviously, device sales directly influence app development, since they fundamentally set the size of potential users.
Samsung, the leading Android device maker, saw cooling sales from its mobile division last year. Meanwhile, Apple saw a sudden, mad surge in iPhone sales last quarter. According to Consumer Intelligence Research Partners, 50% of all phone activations in the last calendar quarter of 2014, ending in December, came from iPhones. As the report notes, that’s a huge 28% increase over the third quarter.
For its part, the Android scene has some intriguing developments slated for this year. Google’s modular smartphone, known as Project Ara, looks fascinating, as does Samsung’s curved glass Galaxy Note Edge. The latter also just hired Lee Don-Tae, a design expert that hails from the same firm that produced Apple’s Jony Ive. In other words, the South Korean company wants to incite the same fervor over its gadgets, including Android devices, as Ive sparked for the iPhone.
Heated rivalries. Large fanbases. Big revenues. Things certainly can’t get anymore Hollywood than that.
Lead photo by Jason Howie; chart courtesy of Asymco