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Developers Look Past Apple's Jammed iPhone App Store

Programmers at Ubermind are diversifying their app store loyalties. Once the company's mobile-phone software developers trained all their attention on making applications for the Apple (AAPL) iPhone. No longer. The 34-person team at Ubermind, maker of the popular iLightr app that creates a virtual flame on the iPhone screen, recently began building apps for a rival mobile-phone operating system. They're now releasing two apps a month for devices based on Android, the software backed by Google (GOOG), in addition to the five monthly apps they release for the iPhone. "We have no plans to abandon" the iPhone, says Ubermind CEO Shehryar Khan, who says his company's sales have doubled in the past year thanks to iPhone apps. "But we are not going to put all our eggs in one basket." Of the more than 125,000 programmers registered to create apps for the iPhone, a growing number are branching out to build apps for Android and other operating systems. The Apple App Store is still growing, with an inventory that recently surpassed 100,000 games, e-books, calendars, and other apps. It remains the largest downloadable mobile app store by a wide margin. But the larger the App Store gets, the harder it is for developers to make money from it. That, combined with sometimes long approval times and dismay over Apple's gatekeeping decisions, has led some developers to branch out or switch allegiances altogether. When the App Store made its debut in July 2008, it was the first. Now developers can choose among plenty of operating systems. Apart from Android, there's BlackBerry App World for Research In Motion (RIMM) devices. Carriers are opening their own stores, too. The App Store's share of mobile app downloads may slip to 20% in 2014, from 70% this year, according to consultant Ovum. "We Are in This to Make Money"Android is garnering much developer attention. In October, the number of apps in development for Android jumped 94%, from September, while iPhone app volume rose by a mere 4%, according to mobile analytics firm Flurry. The number of devices running Android is surging, too. By 2012, Android is expected to become the second-most popular smartphone operating system after Symbian, leapfrogging BlackBerry, Microsoft (MSFT) Windows Mobile, and the iPhone, according to Gartner (IT). With Android Market, developers can publish apps in a matter of minutes, without going through a review. And developers say it's a lot easier for users to find an app among 12,000 on Android Market than by rooting through more than 100,000 on the App Store. "We love the iPhone, but we are in this to make money," says Craig Hockenberry, principal at Iconfactory, creator of the hit iPhone Twitter application Twitterific. "It's hard to make money [in the App Store]." Hockenberry recently began investigating making apps for Android, though he hasn't turned his back on the App Store. At the outset, developers stuck with Apple in part because it's a hassle learning to write code for a new system. But technologies such as Ideaworks Labs' Airplay software make it easier for developers to create apps for multiple systems at the same time. That kind of software "will definitely change the game," says Will Stofega, program manager at consultant IDC. Ideaworks recently did away with fees for independent iPhone app developers. "We want to send a message to iPhone developers: There's lots of other hardware worth looking at" besides the iPhone, says Ideaworks CEO Alex Caccia. As other operating systems gain traction, Apple could lose part of its competitive advantage, says Charlie Wolf, senior analyst at Needham & Co. "Their whole advertising pitch is the apps," Wolf says. "The real issue is: Are developers making enough to stay loyal to the platform?" Apple App Store: Rejection and DelayFor many, the answer is no. To start with, application prices are falling. Iconfactory's Twitterific app now costs $4.99, compared with $9.99 a year ago. Large game makers such as Electronic Arts (ERTS) can spend more on marketing than can smaller design shops. Moreover, developers are making fewer sales, with products lost among the more than 100,000 apps. Larva Labs makes iPhone apps such as PhotoTwist, which lets people warp and twist photographs, but the company can no longer break even on new apps. "Every other app we wrote after [PhotoTwist] got less interest than the previous one," says Matt Hall, co-owner of Larva. "We've spent more time on unique features for these apps." Larva Labs now focuses on Android, he says. Frustrations over the App Store's lengthy and often arbitrary approval process are also turning developers off. In March, Ubermind received three app rejections in one week alone. Developer SMobile Systems waited a year to win approval for its iPhone app, designed to make iPhone content more secure. Recently hundreds of consumers signed a petition asking Apple to publish two DJ apps that have been held up in the review process. "We are really starting to rethink our options," says Russell Haglof, whose Pajamahouse Studios created a DJ app that's been in review for more than two months. "If you are starting to make a business with a partner that can take two months with no response, it's not a healthy relationship," he says. Unsure of when their apps would hit the store, developers can't market them in advance of release, or even advertise release dates. Developers say Apple is trying to improve its review process and make it easier for consumers to discover new apps. The company now maintains an online system that lets developers track the status of software making its way through the review process. (No mobile app store is without problems: Developers on Android Market try to game the system by updating their apps daily, thereby boosting their rankings on the site, for example.) As the leader, Apple has cause to keep as many developers as possible on board. If the App Store loses its allure, so does the iPhone. "It's Apple's game to lose," Wolf says.
Kharif is a reporter for Bloomberg News and Bloomberg Businessweek in Portland, Ore.

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