The app economy's 1 percent

25 app developers make 50 percent of the revenue from app stores.
Written by Tyler Falk, Contributor

There's no doubt that the creation of apps for mobile devices has grown into a legitimate industry in the United States. Apple alone says it has paid app developers over $6.5 billion in royalties through its app store and, the company claims, its app store is responsible for over 300,000 jobs in the U.S. alone.

Participating in the app economy, as The New York Times showed earlier this year, isn't necessarily a path to wealth for independent app developers. And there's more evidence of that thanks to new estimates from Canalys that show revenue from app stores mostly going to a small share of developers, most of whom are big companies.

Canalys estimates that during the first 20 days of November 50 percent of revenue from Apple's App Store and Google Play went to only 25 developers. Among them were Electronic Arts, Zynga, Disney, and (not surprisingly) Rovio, the developer of Angry Birds. Pandora was the only non-gaming developer among the 25.

The main challenge for independent app developers and a reason the rich (developers) keep getting richer? Standing out amongst the flood of apps.

"Discoverability is a particular issue in the Apple App Store and in Google Play given the huge inventories they boast," said Canalys Senior Analyst Tim Shepherd in a statement. "With top game developers' content so prevalent in the stores, it can be hard for other good quality apps to get the attention they deserve."

Of course, Canalys' data is a small sample, but it adds to the evidence that it might not be a good idea to quit your day job to develop apps. One survey says that 80 percent of developers don't make enough from their apps to start a standalone business and 59 percent of apps don't generate enough revenue to break even on development costs.

Still, the app economy is gaining strength. This year it is expected to be a $30 billion market. But it looks like most of that will be going to a small fraction of developers.

(h/t Mashable)

Photo: Flickr/miguel77

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