Steve Jobs’ Legacy: The App Economy

“[The] App Economy now is responsible for roughly 466,000 jobs in the United States, up from zero in 2007 when the iPhone was introduced. This total includes jobs at ‘pure’ app firms such as Zynga, a San Francisco-based maker of Facebook game apps that went public in December 2011. App Economy employment also includes app-related jobs at large companies such as Electronic Arts, Amazon, and AT&T, as well as app ‘infrastructure’ jobs at core firms such as Google, Apple, and Facebook. In additional, the App Economy total includes employment spillovers to the rest of the economy”–Michael Mandel, February 7, 2012

“On today’s show, we hear how a hobby turns into a lucrative one-man business — and how Apple’s App Store is transforming the Internet economy. The gist is super simple. In fact, it’s something that’s been going on in the physical world for thousands of years: Giving people a convenient way to buy cheap products….

Instapaper was a Web-based service that solved a small problem Marco [Arment] had: He would come across long articles on the Web, but wouldn’t have time to read them during the day. He wanted a way to save articles to read later on his phone. Instapaper let him do that.

Marco told his friends about Instapaper, it got a few write-ups in the tech press, and pretty soon thousands of people were using it. Marco started running an ad on the Instapaper Web site. The ad generated a few hundred bucks a month.

Then Apple launched its App Store, where developers could sell (and give away) applications for the iPhone and, later, the iPad. Marco started selling an Instapaper app, and his business took off. Marco explains why:

Apple already had everyone’s billing information from iTunes … you could buy things just by typing in your password … That, for the first time, brought very, very easy payment to the modern software world. That, more than anything, is why there is a business for paid apps… .

By late 2010, sales of the Instapaper app were doing so well that Marco quit his day job. Now he makes a nice living — comfortably into the six figures — just from sales of the app.”–Planet Money Podcast, January 31, 2012

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