Jun 8, 2009 7:36 pm US/Pacific
Entrepreneurs Cash In On iPhone App Success
SAN FRANCISCO (CBS 5) ―
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Apple iPhone 3G.
Mario Tama/Getty Images
In the last two years, Apple has sold 40 million iPhones and iPod touches. And it's not just Apple that's cashing in. Entrepreneurs are finding a way to capitalize on Apple's success.
At the Apple Worldwide Developers Conference in San Francisco there is a sold out crowd of 5,000. In the sea of developers, Derek Burgess and Khang Toh from Pittsburgh, Pa., who were both recently laid off, pitch a game they created for the iPhone.
"Smackbots is a robot fighting game and you just fight and have crazy fun. It's speedy and mindless. We're selling it for 99 cents and there will be content upgrades for 99 cents. We have more game ideas. We hope to make a company out of this," Toh said. They invested about $2,000 of their own money and are currently in talks with interested investors.
Mark Hughes doesn't need investors. He quit his job as a java web developer and has almost matched his old 6-figure salary developing 2 iPhone video games, Perilar and Castles, in the past year. Individuals and large companies are jumping in to get a piece of the pie and Apple makes it easy.
"Apple has taken the work out of it. I don't have to run my own store. They do my credit processing and refunds. They handle the business side of it," he said.
And it's why CNET's Brian Tong said the Apple economy is booming during this recession. He said, "The barrier of entries are so small, Joe Schmo in his garage with 200 bucks and a whole lot of time can make 100s of thousands of dollars and that's why there's an energy for people to be part of this whole thing."
Not all of the iPhone applications are money makers. But, there are 50,000 applications now available in the Apple store. With more than a billion downloads, Apple takes about a 30 percent cut of the ones that are making money. And the two guys with Smackbots are proud to announce they are among that group making money. Smashbots was just released on the eve of the WWDC.
The good thing for consumers is, prices should stay low, because there will be more competition. Palm, Microsoft, and Nokia are all building application stores to go with phones running their own operating systems.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
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