From Panic’s 2014 report:
[Low iOS revenue] is the biggest problem we’ve been grappling with all year: we simply don’t make enough money from our iOS apps. We’re building apps that are, if I may say so, world-class and desktop-quality. They are packed with features, they look stunning, we offer excellent support for them, and development is constant. I’m deeply proud of our iOS apps. But… they’re hard to justify working on.
Here’s a way to visualize the situation. First up is a sample look at Units Sold for the month of November 2014:
Wow! 51% of our unit sales came from iOS apps! That’s great!
But now look at this revenue chart for the same month…
Despite selling more than half of our total units, iOS represents just 17% of our total revenue.
There are a few things at work here:
- We’re not charging enough for our iOS apps. Or Mac users are simply willing to pay more for apps. Or both.
- We’re not getting the word out well enough about our iOS apps.
- The type of software we make just isn’t as compelling to iOS users as it is to Mac users. Our professional tools are geared for a type of user that simply might not exist on the iPad — admins and coders. We might have misjudged that market.
It’s really hard to say for sure. One thing is for certain: we are more likely to increase the price of our iOS software over time in an effort to make it make sense. And we’re less likely to tackle any huge new iOS projects until we get this figured out.
Another data point that’s part of a larger trend that’s been visible for a while. The question is whether Apple also views this as a problem. I’m in the camp that thinks they don’t. I think the store they have right now, full of free and low cost apps is exactly what they want. I believe they would like the Panics of the world to stick around, but maintaining a huge quantity of free and low cost apps is more important.
The real question is not whether Apple will change the structure of the App Store to help companies like Panic be successful there, but whether the Panics of the world can find a way to make money despite the App Store’s limitations.