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June 2, 2010

The Case for Universal Apps

Release your iPhone/iPad app as a Universal app in the App Store-- it’s better for you, and it’s better for users.  We’re going to give you some juicy iTeleport sales data and user anecdotes since the iPad launch to back that claim.

If you’re a developer both for the iPhone and iPad, you have a choice to make when releasing your app in the App Store.  Do you release separate iPhone and iPad apps or do you release a Universal app, which runs on both the iPhone and iPad?

There are a couple of different ways to look at it.  First, there’s the financial perspective: which approach results in better sales?  Second, there’s the user perspective: which approach makes the most sense to users, pisses them off the least and causes less support issues?  We think that Universal apps are better from both perspectives.

The Financial Perspective

As a developer, you want to be able to recoup the investment of time and money you put into developing the iPad version of your app.  Developing for a new device requires a significant effort, and you want to be fairly rewarded for that effort.  The question is: are total sales better when you release two separate apps (that are perhaps also priced independently), or a Universal app?  A first-pass answer to this question would be: well, clearly in the Universal case you are effectively giving away two apps for the price of one.  If a user buys the app for the iPhone, they get the iPad app for free, and vice versa.  It doesn’t make sense for me to give away my work for free, you say.

We say: yes it does!  It turns out that Universal apps are far more appealing to users than apps that target just one platform, and so a Universal app is likely to generate more sales than two separate iPhone / iPad apps combined.  

We have a particularly unique perspective on this, because we initially released iTeleport for iPad this April as a separate, non-universal app, even though iTeleport for iPhone has been on the App Store since July 2008. There wasn’t a grand plan here; the reason for doing this was that we wanted to get the iPad version out on launch day, and we had changed enough of the code that integrating those changes with the iPhone version to make a Universal app wasn’t possible in the time we had. We were committed to making these updates available for free to our existing users, and we explained this clearly on our website and on the App Store, and so a few weeks later, we made the iPhone app (iTeleport: Jaadu VNC) a Universal app. The biggest reason for doing this was actually from the user perspective, which we’ll talk about in a second.

So we have data that we can look at and compare these two options in a nice, clean way.  This chart shows the sales data for iTeleport for iPad and iTeleport: Jaadu VNC for iPhone from April 1 to April 26:

Pretty good.  An exciting launch week spike, followed by a respectable 2.5x jump over the pre-iPad average.  Looks like this is the way to go -- keep the two apps separate, and let users pay twice.

But looks can be deceiving.  The next chart shows sales data for the Universal version of iTeleport: Jaadu VNC since its release on April 26 to June 1:

Surprisingly, the total sales increased to almost 4x the sales average for March. Here's all the data put together in one nice, big chart:

So from a purely financial perspective, it's clear that Universal apps are the way to go.

The User Perspective

We weren’t necessarily expecting this.  We sort of stumbled into it because of the second perspective we talked about: what do users want? Answering this question is a little bit trickier, because not all users want the same things, and not all users talk to you.  However, we decided one thing very clearly before we launched the iPad version: we wanted to reward our existing iPhone users with a free upgrade to the iPad version.  We made that as clear as possible to our users, both on the iTunes App Store description for the iPad app, and on our website.  We didn’t really commit to a specific mechanism for the upgrade, because we weren’t sure exactly how we'd do it, and whether we were going to go the Universal app route.  We were also considering trying an in-app unlocking model, where we would keep track of which users had the iPhone version before a certain date, and upgrade them for free.  We could also do fancier things like give future users discounted upgrades from iPhone to iPad and vice-versa.

After we released iTeleport for iPad only, however, our users really forced our hand. They were clearly confused, impatient, frustrated and sometimes upset. Some users never saw our upgrade promise, and wrote angry letters (which, to their credit, they quickly and apologetically retracted when we pointed out that we'd promised a free upcoming upgrade).  Some users, even if they were aware of the upgrade path, were hounding us a week after launch saying: Where’s that upgrade, iTeleport? Several users just didn’t get how it would work.  A few savvier users asked us directly: Why don’t you guys make the app Universal?

This forced us to ask ourselves: Yeah, why don’t we?  In-app unlocking was an option, but a little bit of thinking exposed a lot of potential complexity, significant development work, and no clear benefit to us or our users.  On the other hand, there was the Universal option, which was easy for us development-wise, and well-understood by users.  The only issue for us was: now that we have two apps out there, if we make one of them universal, is that going to piss off users who bought the other one? We actually thought about this a lot, and decided that going Universal would probably upset some users in the short term, but would be better for us and for our users in the long-term, from a support and less-product-confusion perspective.

We turned out to be right on both counts: making iTeleport for iPhone a Universal app did upset some users, and we believe it will be better for us in the long-term. Obviously, the users that got upset were the ones that bought the iPad-only version, and saw that iPhone users were getting both for free.  Or, they bought both the iPad and iPhone versions separately, and were (understandably) angry about having to pay twice for something they could now get for the price of one.  We did our best to be open and accommodating to these users, suggesting refunds and even offering promo codes in some cases.  Some users understood; some not so much.  It was painful for a few weeks, but we’ve gotten through it now.  Now, about a month after the launch of the Universal app, we are happy with our decision. Users are very happy to see (and pay for) Universal apps, and there’s less confusion.

We wouldn’t recommend going down this road of putting out separate apps and then going Universal.  We sort of stumbled into it, but since we found a clear winner in terms of the best approach, we thought we’d put that out there in this post. Hopefully this helps other developers when they’re making similar choices.

So if you were on the fence about going Universal, we hope this makes your decision easier.  It's easier for you, easier for your users, and you potentially end up earning more in either case.  We hope this helps you, your users, and the entire ecosystem.  Let us know what you think!

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Posted by Vishal 

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May 7, 2010

Quality over Quantity: How We Built iTeleport into a Profitable Business on the App Store

Our flagship app, iTeleport, is priced at $25 on the App Store, and our sales data shows that it's earned more than $1,000 a day.  How did we get here?

The App Store has been out for almost two years now.  There are almost 200k apps and over 38k developers (source).  As the store has grown, one of the prevailing memes has been: you need to have a low price, high volume app to succeed in the App Store.  As the number of apps has grown, visibility has become increasingly difficult, and so the logic is that developers need to get their apps in the Top 100 charts to get visibility, which will then drive volume.  To get into the Top 100, however, you need to drop your prices, because your competitors on the store are willing to do that.  This creates a vicious cycle that drops prices across the board, and makes it very difficult to create a sustainable, long-term business on the App Store without having a "hit" app.  Some have argued that while there are some apps that are successful with a relatively high price, they are all big brands that have their own marketing machines, or get preferential treatment from Apple in getting on the Featured or What's Hot charts.

We'd like to debunk all of these myths.  And we're going to do it with real data.  Our app is called iTeleport (formerly Jaadu VNC).  It's a VNC client for your iPhone/iPad that lets your control your computer from anywhere in the world, and supports Mac, Windows, Linux and many other platforms.  It's been out since two weeks of the original App Store launch (July 08), and we just added iPad support last month.  It's a profitable, sustainable business built entirely on revenue from the App Store that has not been driven by a high volume product. We're hiring.  We have a long-term vision for the future.  And here's the thing: the app costs $25, and it hasn't been in the Top 100 download charts since September, 2008.

Let's start with the data.  The following chart shows iTeleport's App Store ranking in terms of number of downloads for six months (October '09 through March '10):

Yes, the chart is blank.  As you can see, we never made it to the top thousand apps, let alone the top hundred.  This doesn't look like a successful app at all.  

Let's look at another chart.  This one shows the App Store ranking of iTeleport in terms of revenue generated (from the top grossing list):

It looks completely different -- there are even a few days where the app broke into the top 100 grossing iPhone apps!  Looks contradictory, but it isn't.  You're probably wondering "this is all really nice, but how much money is this app making?".  Great question!

This final chart shows the daily net revenue (after subtracting Apple's 30%) generated by the iPhone app over the same six months.

A maximum of almost $2,800, and it never drops below $1,000 a day.  The data pretty clearly shows that we've been able to generate significant revenue without driving a high volume.

How did we get here?  We believe it's a combination of creating a high quality product with great support in a well-defined market with significant demand.  This doesn't sound too different from classic definitions of how to develop a successful software business, and it's not.  We've done very little marketing.  The app has been featured a couple of times over the past two years, but for short periods and not enough to explain the sustained level of revenues.  Word-of-mouth is probably the best explanation of how revenues have sustained themselves.  That, combined with offering something people really want, and are willing to pay a premium for if you give them distinctive, useful, hard-to-find features in return.  Yes, there are cheaper, or even free, VNC clients.  But they either suffer from poor connectivity, or poor support, or laggy performance, or less features or more crashes.

We're not trying to brag by publishing this data.  We're really proud of what we've built, and we hope this data will inspire other independent developers to invest their time into building higher quality products.  We believe this will be better for everyone: for developers, who get to focus on making incredible apps and earn a decent living from them; for consumers, who get awesome apps that are worth their price tag; and for Apple, because the quality of the apps makes the platform more attractive for everyone.

We also hope this demonstrates that you can build a business on the App Store.  That doesn't mean it's easy, or that you'll automatically make more money if you raise your price, or that every app should be priced at $25.  It's just another perspective, albeit one that we haven't heard in all the discussions of the iPhone developer ecosystem.  This may be because we're the only ones, but we don't believe that's the case.  And we'd like to encourage others to add their voices to the chorus, in the hope that we can change the perception of the App Store.

As independent developers, we have a choice.  In our case, we decided to value quality over quantity, and it paid off for us.  We hope that at the very least, this gives other developers something to think about.  And we'd love to hear what you think -- please voice your own perspectives in the comments.

Stay tuned for more posts in the coming weeks.  In an upcoming post, we'll be putting forward a case (with real sales data) for making Universal apps, instead of two separate iPhone/iPad apps.  We'll also be presenting and analyzing sales data from April (not shown above) where our Universal app was ranked the top 100 grossing iPhone and iPad apps, and our iPad app also made it to the top 30 grossing iPad apps -- we'll be able to compare sales figures between the iPad and iPhone app stores and give a sense of the relative sizes of the two stores.

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Posted by Jahanzeb 

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May 4, 2010

iTeleport: The Video

This is our first official iTeleport video.  It gives a birds-eye view of what you can do with the app, and how you use it.  Check it out when you have a minute.  We did the writing/filming/editing/sound ourselves, and we're pretty happy with how it turned out :)

Let us know if you have ideas for other interesting iTeleport videos...

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Posted by Vishal 

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May 4, 2010

Meet iTeleport

We'd like to introduce ourselves.  We are two engineers in the Bay Area, and we run a startup called iTeleport.  Hello world :)

iTeleport is an iPhone & iPad app for remotely controlling your desktop.  It's been out in the App Store since July 2008, about two weeks after the App Store's launch.  This is an exciting time for us: the iPad app reached the #22 Top Grossing iPad app a few days after launch, and the Universal iPhone/iPad app reached #69 in the Top Grossing iPhone apps last week.

We want to share our excitement with you!  And, we'd like to share our thoughts on startups, non-profit community work, and the iPhone development ecosystem.

To start, we thought we'd speak a little bit about our vision for the technology and for the company as a whole.  Here's a tagline that we thinks sums up the technology vision: "Access your stuff from anywhere in the world."  Remote desktop is the first step.  And we really do see it as just a first step.  What we're working on now is extending the technology we've built for accessing your desktop remotely, and making that work for accessing your music, or your videos, or your live webcam feed remotely. We want to bring you the power and the promise of "the cloud," without the cloud.  Some may think this is moving a step backward, or at best, it's kind of a cute, retro idea.  We think it's the most effective, most scalable, most private and most secure method of getting you access to your stuff, anywhere, anytime.

The other thing we're really excited about is our vision for the company.  At a high level, what we want to do is create a company that combines the for-profit business with non-profit, for-impact work.  Here's where we're coming from: we're both engineers that want to build stuff that is used and loved by a lot of people.  On the other hand, we've also been involved in community work, both locally and in developing regions.  Some of that work has been technology focused, some not so much.  What we want to do is utilize the time that having a profitable business affords us to work on impactful projects together, as a company.  It's kind of like 20% time for helping the world.  We imagine a company of smart, talented people from all sorts of different backgrounds, that are excited about both building technology and impacting the world in a positive way.

We are looking forward to sharing our thoughts as we continue this journey. We'd love to hear your feedback and perspectives.

Jahanzeb & Vishal

 

 

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Posted by Vishal 

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