| The reason the number in this article is interesting is that it is a compelling absurdity: the notion that Apple might make an appreciable amount of money off the average developer due to "developer on-boarding" costs as opposed to fees from selling their software. The analysis in the (simple) article, thereby, is actually quite funny, and is part of an overall correct narrative; although, I agree that it was not described in quite the right context, and lends itself to your math complaints, which are technically quite correct. From this standpoint, using the average developer income does not destroy the analysis (and is in fact required of it): if I were using a similar analysis in a talk, I'd want to speak to the people in the room, to give them a feel for what Apple will make from that sample. Secondly, it is not problematic to ignore that the developer might have otherwise purchased an iPhone: the purpose of this kind of analysis isn't to demonstrate that Apple is "trying to get money out of developers", it is to demonstrate a comparison in the money made. However, you are quite right that the math in the article is flawed: thankfully, some parts compensate by being conservative; once you take into account processing fees and other fixed costs (as various others have done), Apple's profit on the App Store is closer to 10%, not 30%. We then get $4.9b*10%/160k, giving (conservatively, working back up towards 12%) ~$3500/developer. ($300+$99)/$3500 is >10%, which is still an interesting figure to be able to trot about at conferences (especially if you try to estimate the money spent on Macs). (If I were to try to undermine the math in this argument, I'd probably do so from a different angle: the $99 is not pure profit, as Apple has employees scanning over the contracts and vetting corporate accounts; the fixed per-signup costs need to be removed.) (Additionally, I question whether the average developer buys the most expensive device Apple offers, or instead purchases an iPod touch to use only for development; and then, keeps the iPod touch for longer than a year. A bi-yearly iPod touch would destroy this math.) |
It's also plausible.
Early Autodesk's entire business model was built on top of fleecing their dealer (value-added reseller) channel.
Ditto franchises, pyramid marketing, ponzi schemes.
That said, if you're smart and very lucky, it's possible to make real money playing in someone else's sandbox.