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How Does One Make Money With This iOS Stuff?

On my second day of the first BarCamp I awoke early and felt inspired to prepare notes for a talk on what I found so far to be the most interesting way on how to make money on this ecosystem that Apple has created for us.

When I gave this talk I ran out of time and felt a bit “incomplete” as there would have been several interesting points towards the ends of my note. But the room was full and judging from the fact that people asked several interested questions (and nobody left) people seemed to be ok with that.

Being a reader of this here blog you now reap the benefit that I translated my presentation structure filled in with some commentary for coherence. And this also contains the entire notes, the “Director’s Cut” if you will.

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How Safe is Square?

Innovative startup Square continues to make waves with their app and reader combo that enables small-time businesses to access payment with credit cards. Imagine somebody with a camping table and self-made T-Shirts selling these on the street. For example I would have loved a T-Shirt to commemorate 2 weeks of iPad2 queues saying “I queued for iPad 2, but all I got is this lousy T-Shirt”. Without hesitation my Mastercard would have jumped out of my wallet to make love to a Square reader and app.

But then there are the established companies which feel threatened by Square. First and foremost VeriFone, a company that apparently seems to see themselves as the sole owner of the market for processing payment information. This is evidenced by the statements made on their website. Take for example their SEO-friendly site title: “VeriFone Official Site | Secure payment solutions for credit & debit cards, EMV, contactless, & NFC”. They have vested interests in technologies that require you to purchase their products.

Let’s have a closer look what’s behind this rivalry and also investigate if there really is a gaping security hole in Square’s approach as VeriFone claims.

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iCatalog.framework brings Digital Catalogs to Life on iPad

Somehow I was restless this night. When I checked my e-mail I see the reason why. My fine tuned app store antenna has been tingling as it usually does before something great happens on the app store.

There was a joyous e-mail by my US partner on the biggest project I had done in my iOS carreer so far:

All four RedCats iCatalog Apps have been approved by Apple and are now live on App Store.
Thanks for all the effort you’ve put, and continue to put, toward making this the best possible product.

The whole thing started when I got contacted on May 30th by Octavio Cifuentes at International Color Services asking for an “App Development Quote Request”. ICS specializes in digital pre-press services for top-brand retailers and cataloguers. They where looking for a contractor to do an app for them. To put it in layman’s terms, ICS is getting PDFs from catalog companies and they make sure that the colors match the clothes that are being sold. So they wanted to have a product to offer to their customers to take this PDF and make it into a digital edition for an extra free.

The Start of a Beautiful Partnership

At that time I was thinking about doing a magazine/catalog framework loosely based on the Wired-App. If you remember I reported on how Wired is saving all pages as PNG files and using an XML file to create the structure for the magazine. They where shooting over the target with that because they used full size PNGs for both orientations making one edition around 500 MB including videos. But the general way of doing it intrigued me.

When I responded to ICS’s request (after having done the usual NDA dance) I gave them three options:

  • you can become a software company and hire somebody to work on this (not me)
  • or you can outsource it to some eastern Europe or Asian country. But then you’ll need an experienced project manager to keep taps on your cheap labor. (not me)
  • or you can partner with me. I retain full ownership of what I create, but you have the exclusive rights to sell apps based on the framework I’ll be creating

At first they where hesitant, but the more they thought about it, the more they realized that only the third option would give them what they wanted. I argued that if you let your partner retain a stake in the project the outcome will be dramatically different than if it’s just a job where you bill your hours. And naturally ICS did not want to turn themselves into a software developer.

I met with ICS’s CEO James Kearns in Milano, Italy, and there we shook hands on the deal. He’s an amazing person to deal with, a gentleman as he is a scholar. What I liked especially was that he offered to pay for my development expenses because I needed something to live off from while developing the framework.

R&D

A lot of experimentation was necessary initially, especially on how to render PDFs. The challenge there was twofold: 1) you could not render the PDFs directly because of the bad drawing performance that the iPad has and 2) because there where thin lines all around those PDFs due to some print-specific features that are being used. These lines are hairlines and disappear in printing, but they show up as 1 pixel lines in the PDFs. So we chose to pre-render the PDFs at a multiple of the resolution which makes the pages super-crisp and the hairlines disappear.

Much work also went into working around performance limitations of the iPad. In my tests the decompressing and drawing of a full screen image would take up to 300 ms which would cause enormous jerkiness. Only 3 frames per second is much less than the ideal 60 frames. I solved this dilemma by moving the page drawing onto a background thread with the help of CATiledLayer. But not without opening a bug report at Apple to complain about the bad image performance. Now scrolling on the iCatalog apps is smooth as button, only if you scroll very quickly you see pages pop up after a brief delay. But this is the best you can get without resorting to OpenGL.

Octavio was my counterpart at ICS and he did all the designing and stuff while I was able to concentrate on the programming of all the features. It’s not immediately obvious at first glance but there is a great deal of small things that we had to polish, polish and polish. I could not have done without a person at the creative helm. I don’t do design. I had some ideas about usability and experience in what would work in an app.  But I don’t like to push pixels around in Photoshop. So OC and me where the perfect team for this task.

Catalog vendors are particular when it comes to so called “Spreads”. If you open the catalog you have two pages next to each other and you might have something that is continued over both pages. So I had to create a way to animated smoothly between the portrait and landscape mode retaining info on which page you where. Say you start in portrait mode and rotate the page you where at was a right page. If you then rotate back you end up on the same page. This is one of the many details that make or break a digital catalog experience. And one kind of thing that you as a developer don’t think about, but need an experienced guy like OC to tell you.

Another thing that I am particularly proud of is the scripting engine that is the heart of all catalogs. Up until the minute that the apps got approved I was worrying a bit that Apple might see this as a rejection reason and I formulated in my head a response. All the interactions in the catalog are written as Objective-C statements that at runtime are converted to NSInvocations with the appropriate parameters filled in. So it’s not a real interpreted language or scripting engine per se, but more like a single statement parser. But it works great. Because of this I’m able to quickly add any new feature. All I need to do is to write the method to execute and then this becomes immediately available for use in all iCatalogs.

It’s only natural that iCatalog also supports video and audio playback but those you best see for yourself in the Jessica London iCatalog app.

Online Integration

All iCatalogs work great if you are not connected to the Internet. There are however two things that you might want to get connected for:

  1. Sharing individual products or your entire Wish List on social networks
  2. Purchasing

I knew from my experience that Apple would reject all apps that don’t work well if you are in airplane mode. That’s why I took extra care to fail gracefully if the internet connection drops out. Reachability 2.0 to the rescue!

Online Purchase integration is different for each catalog client. For the initial batch we chose to just integrate it with the existing online shopping bag. All your wish list and shopping bag items are kept on your iPad until you tap the checkout button. When you do – and if you have Internet – your choices are transferred to the online site and there you fill in your address and credit card info to complete the purchase. Down the road we want to get a proper XML API to transfer the shopping bag, but for now this method works great.

I saved much time when implementing the social sharing functions by not coding them myself but instead using ShareKit. This enables us to share items through a multitude of social media sites right out of the box. Fortunately the most pressing bugs had been fixed just in time for this release.

Edit This

The interactive areas where the second source of pride. I called them “Hot Zones” and they are basically rectangles you draw on the catalog page with the editor. Then you specify different actions for single tap, double tap or automatic execution on page showing. You can assign an icon, a sound and many other options to fully customize what such a hot zone would do. For example the feature “Swatch Match” is constructed such that you have multiple variants of a catalog page with different colors of a product which you can flip through by tapping the button.

Speaking of the Editor. Initially we considered doing an app to do the editing of catalogs. But since I never did a Mac app before I incorporated all the editing functions into the iCatalog project itself. This way OC can immediately check that what he sees is what he gets when putting together a new catalog. By running the editor version in iPad Simulator he gets the best of both worlds: the look and feel of the catalog on the iPad as well as all the benefits of the desktop like access to the files and multi-core rendering performance.

I might still do an editor down the road if the framework has stayed stable for some time, but until this occurs having an in-app editor is the best solution. This edit mode is easily disabled when building an app for a client by means of making a simple change in the PCH file.

How To Get Your Own iCatalog

I know that some people out there might be tempted to trying to do something similar. Maybe you have been contacted by somebody with a catalog or their agency and asked for a quote. While it has been an extremely rewarding experience for myself I would not recommend for anybody to undertake it unless the company looking for a digital catalog is prepared to pay at least 3 months worth of development for it. Not to speak of the ongoing work that is necessary to polish it and add new features as they become necessary.

The alternative to spending thousands of dollars is to license the iCatalog.framework. As I mentioned previously ICS is my international commercial partner for it. You can contact Octavio Cifuentes to schedule a demo and explore how ICS can help convert your catalogs into a compelling iPad experience. At any case I recomend to you check out any or all of the free iCatalog apps that are already in the store.

Update: Here’s a demonstration of the iCatalog framework and a peak behind the scenes on how such a digital catalog is made.

Microsoft Continues to Fish in Apple's Pond

I previously reported about having gotten e-mail from a Microsoft representative. It turns out, that was only the US activities.

Today I got a phone call from a lovely lady (obviously native German speaker) from CBS, you know, those TV guys. CBS apparently also does telemarketing and they got hired by Microsoft to call all European iOS developers to try to see whom they might get on board of Windows Phone 7. CBS has received a list of developers from Microsoft who seem to have gotten it by scraping the app store.

Microsoft is offering the following trinkets to make the switch a bit more interesting:

  • 75 Euros Sign-Up Fee waived if you have at least one WinPhone7 compatible app released by December.
  • free tech support
  • they’ll even reservere your app name for you on their store
  • a slew of workshops
  • a free copy of Windows 7 for your development PC
  • a free mobile device

I interrogated the caller a bit about how their activities are working out so far in other countries and especially in Austria. She said that it’s going really well in Great Britain and Italy, and so-so in France and Germany. I was the third Austrian iOS developer she had called, but she just began. Well, having a name beginning with D got me on the third place of an alphabetical list it seems.

Hey, and you don’t have to totally switch. Just “make one app compatible” until December to not have to pay the sign up fee…

Being the solo-developer that I am I certainly don’t want to spread myself too thin. Also I don’t think that it would be wise to branch out to other platforms while I still have so much more to learn about iOS development. Some time ago I formulated my own credo to be “focussed on iOS, but diversified widely on one platform.” That’s my plan.

But you’re free to do whatever you like, if a free Windows 7 mobile phone is all it takes for you to turn your back on iOS then please DO leave.

Building the Ultimate iOS Source Store

When I quit my employment as Windows system administrator in December 2009 I had already been developing iOS stuff for 2 years. At that stage I had to define what my business should be comprised of and I decided on a multi-pronged approach. I simply lack the design capabilities and ideas to sustain myself on apps alone.

The Past

One of the multiple streams of income that a holistic iOS business can generate are sales of software components. Often there’s a functionality that you wished Apple would provide or made simpler to use but you lack time and expertise to write such a component. And you lack funds to hire a professional at a rate of several hundred dollars per day. What if you could share the development cost with dozens of other fellow developers? The pro would still get payed, but you trade exclusivity for availability.

This is what I created my Dr. Touch’s Parts Store for.

Often I get asked, how this is going for me. Here’s my first go at answering that: pretty well! I’ve been doing that for 7 months now, which provides a bit of data that we can slice and dice. Also I’ll tell you about the present state of affairs as well as present to you my vision of the future: The Ultimate iOS Source Store.

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Microsoft Wooing iOS Developers

Yesterday I found an e-mail in my inbox that gave me a bit of a spooky feeling in my stomach. Ordinarily such a mail would have quickly ended up in my trash if it weren’t for the details they put in there.

Why would Microsoft be contacting me? They obviously did a bit of digging or reading to know that I created the apps for CCS Publishing. They didn’t bother to check on my references page though. The ACLS app was done by somebody else. But still it shows a fair amount of data mining as they appear to have checked those apps’ rankings and then cross referenced them with who was the real author.

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4 iPad App Makers Share Their Development Experiences

Having some contact with developers around the globe allows me (and by extension YOU, my dear reader) a glimpse of what kind of apps are going to become available with the iPad on April 3rd. More importantly, we can ask those busy developers – who struggled to be first in the launch line-up – what they thought were the difficult steps in designing and building iPad apps.

Being the good soldiers that we are, we let them have the glory from being first while being able to learn from the problems that the one or other Apple mine would have caused them. Maybe this way we can save ourselves some grief and frustration if we can avoid their mistakes from the get go.

So here are 5 of the first iPad apps and what their developers learned from making them.

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Q&A with iPhone Business Owner Selling for $100,000

Brice Milliorn

After I had laid out my analysis about Brice Milliorn offering his iPhone Apps Portfolio for sale on eBay, I got contacted by the owner/seller himself. He offered to respond to any deeply probing questions I might have. Journalistic curiosity got the better of me and so I constructed the hardest questions that I could think of.

Here are his answers, verbatim and unedited.

1. You claim to produce 86% of your income from the USA, yet none of your apps appear in the top 100 in any category there. What is your explanation for this?

There are 100,000 apps on the app store and my apps pop in & out of the top 100 from time to time. Also obviously a Top 100 is only a 0.001 percent of the total app store product mix, considering there are 100k apps out there now.  So just because you don’t show up in the Top 100, doesn’t mean you don’t sell a lot of apps.  And furthermore, it is good that my apps are being recognized internationally as well.

2. If your business is still growing (and would grow more with “proper marketing”) how do you explain the steep decline in average royalties for the past 30 days compared to the 60 or 90 days range?

Lack of marketing, lack of updates, lack of attention, and o’yes 100,000 apps on the app store!

3. You say “a person who can market them will have much better results”. How can you predict that if everybody knows that after an initial sales spike there is only a long tail to farm on?

Marketing 101, see below.

4. What’s your factual foundation to claim that “the numbers may be better” as a sales argument?

Marketing 101, and I know this because the spike in sales that you saw (see charts on link list at bottom) was because of the little marketing that I did have time to do. Also a lot of these apps can have focus marketing, meaning they deal with certain areas of the US, so marketing can be focused on that area or that segment of people (i.e. College Students).

5. How did you yourself arrive at the number $100,000?

  • Well I like what I am doing, don’t have much time but still like it, for me to give it up, a big number would need to be paid, 100k is that big number.
  • However when valuing the business, I think it is a small price to pay. When you value real estate you look out 5-6 years. If you take my sales and look out only 2-3 years, this business will pay for it self easily.
  • I also arrived at this number by looking at the two previous cases that I know of (see below for 2 example cases in question #10) of iPhone developers selling their business and after talking to them about their situation.  These apps were sold between 5k and 10k each, I am selling 87 apps for 100k, that is $1,149 each.

6. Currently it is unlikely that you will find a buyer. Small guys don’t have the money. Big guys don’t see an audience. What’s your plan B? Would you also be willing to only sell shares of your company to interested investors? Like $10,000 to get 10% of your monthly royalties would be around 36% annual interest.

I wouldn’t say I won’t find a buyer? I have had over 100+ emails inquiring about it further and there are 70+ watchers on ebay right now. My website has had over 3000 hits in just 3 days, the ebay auction has over 3000 page views as well. I have no plan B. Like I said above, I like what I do and to get me to sell it would have to be a BIG number. Not willing to sell shares of company. 100k, take it or leave it.

7. Or how about only asking for a certain percentage in cash and getting paid a percentage from royalties over a certain period?

Again, not willing to do this, 100k take it or leave it, I enjoy what I do.

8. There is a guy named Joe Madox who is seemingly interested. When defending your offer it sounds like he has already made up his mind to try to come up with the sum. Or is a friend of yours?

This guy has asked a lot of questions, more than anyone. He owns a publicly traded company. He was thinking about paying me in shares of his company. I declined, cash only.

9. You are saying you’re selling “your business”. Does this include the legal entity plus bank accounts belonging to it? What’s this “collateral” you speak of?

Selling the assets of the company, meaning the 87 apps, not the name of the LLC or the LLC itself, little confusing I realize.  The collateral is all the source files, the website files, images, everything the user needs to run these apps and update these apps and completely relinquish these apps from me!  No bank account b/c not getting the LLC, just getting the apps themselves.

10. Based on what legal foundation do you think you can sell your business at all? Sure you can sell a corporation, but how does Apple deal with such a sale?

I am selling my programs, not Apple, not my LLC. There have been previous developers who have sold their business fine, I contacted them to ask questions, got a response from them, said everything went smoothly. Here are those two examples…

Example 1:

http://cgi.ebay.co.uk/Top-Tens-iPhone-app-source-code-and-website_W0QQitemZ260457053112QQcmdZViewItemQQptZUK_Computing_Software_Software_SR?hash=item3ca4733bb8&_trksid=p3286.c0.m14#ht_946wt_1167

Example 2:

http://blog.secondgearsoftware.com/2009/10/bitbq-acquires-fitnesstrack-emergency.html

11. How big is the business risk of your news providers cutting your sports-related apps off?

Well I have fended them off so far but there are a lot of hoops to get around with these apps, a new person starting these types will take weeks and weeks of trial and error with Apple before it ever gets approved.  There are also other news providers I could always use I am sure.

12. In Summary I must say that you are doing a very bad job at presenting your business as something worth purchasing. Anybody who has the money to spend on your company also has the financial sense to want to see a good business case. You fail to present it. We all don’t know what will be in 3 years. Apple may still dominate the Smartphone market. Or it may not. And also coming out of the crisis it has become extremely hard for anybody to get a loan for 100k for a business.

I think we all know, the only company to better the iPhone, is Apple. And the economy is/was bad but there is always someone with more money than they need looking for a golden opportunity.

13. Therefore I suggest that you need help in 1) compiling the numbers in a more transparent fashion, 2) maybe even going so far as to providing the apps.db from MyAppSales for download (It does not contain login data, which is on your keychain), or a ZIP of your past financial reports. 3) formulating a plan B as outlined above.

I am NOT going to give out the individual numbers but I will break them down more. The reason I will not give out the individual numbers is because my best selling ones will then be duplicated.

These numbers are again from AppViz as of 11/07/09.

  • Rule book Apps 8,712
  • Sports Related Apps 12,479
  • Friday Night Lights, ANTZ, & iSpy 4,533

Any further questions can be direct to me at jbmjbm22@me.com.

Also further info can be found at the following redirected sites:

JBMJBM, LLC iPhone App Website

http://www.jbrice.com/iphone

JBMJBM, LLC Sell Page (with CHARTS)

http://www.jbrice.com/sell

JBMJBM, LLC Ebay Sell Page

http://www.jbrice.com/ebay

JBMJBM, LLC Press Release

http://www.jbrice.com/pressrelease

Why I won't purchase an iPhone Business for $100000 today

We’ve been reading about it on Twitter for the past 2 days, now even TUAW picked up the story of an iPhone Developer who wishes to sell his entire business for $100000. Leaving out of our consideration that probably nobody has this much money around anyway it’s still an interesting impulse to start thinking of how much your own iPhone business would actually sell at…. should you ever WANT TO sell it.

With the seemingly limited journalistic means of TUAW all the author came up with was some general quotes and rants. I dug a bit deeper and think it’s interesting to write down what I found in neutrally evaluating this offer. TUAW repeats the seller’s offer on how he will support you, hand over everything, yadi yadi yadi.

But we all are children of numbers and algorithms. So I think we deserve a little bit deeper analysis. This I will attempt in this article.

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