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Are iPhone app devs getting a raw deal?

Robert Palmer

We mentioned yesterday a rumor that Apple won't cut a check for iPhone application developers until the dev's share of the sales tops $250. A lot of commenters were upset about this, if it's true: TomWBrowning said "So if you make an app that costs $1 you won't see a penny even if 359 people buy it?"

From the (indie) developer's perspective, this stinks. They've already paid at least $99 just to participate, and now they have to wait until they make (potentially) hundreds of sales before they see a dime from Apple. Will the high barrier for entry discourage truly good app development? Or will it act like a cover charge to keep out the riffraff?

From Apple's perspective, this is just good business sense. It costs money to cut checks and make electronic transfers in quantity. Plus, Apple can aggregate a great deal of interest on all those little sums they have tucked away. Their cut -- effectively -- is probably far more than the advertised 30 percent, depending on how smartly they invest their savings.

The model isn't exactly foreign: Google AdSense makes a great deal of money (on paper, at least) on the backs of smaller sites that don't earn the $100 minimum for Google to cut a check. Some commenters were suggesting that a $50 threshold for iPhone apps would be more reasonable.

In any event, it certainly makes ad hoc distribution look more and more attractive.

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