He replied to a comment: "strategy is figuring out what part of the market the company wants to play in, how it goes to market, and how it differentiates itself in the market it is about what you are going to do and importantly what you are not going to do."

The analysis on his part had to be simple. He has two products right now, one of which generates $2.40 one time and then people use it for years. His second product pays him $1.40 per customer every month. The second product is far more stable long term.

Great comment. I had a professor say often that "cash is king." Obviously these companies aren't paying attention to cash at all.

Actually, the opposite is true. They've got more cash coming in, and cash in the bank, which is masking the operating loss on each sale.

They don't have the cash to pay their bills. Clearly they don't have excess cash coming in. Cash is still king. They are just masking the cash deficiencies of their business by raising it through funding.

From what I understand, Apple's concern is circumventing the App Store, making it possible for developers to distribute apps that Apple hasn't seen yet. In short, the concern is viruses, worms and other security issues. This, I believe, is why they don't change the limits.

Yep, I know that is one of their worries. Parallel store, bypassing Apple's payment system and creating a bad user experience. However, the number of users that jailbreak their iPhone and use Cydia is small, and the new iPhone users are more and more regular people and will not jailbreak their phone. In essence, Apple has all the control it needs to prevent this and shouldn't worry about it

(Note: I realize that this is somewhat off-topic for the thread as a whole, but I post it as a direct response to the specific argument you are making in your comment. With that in mind, I will also explicitly say I don't even disagree with your conclusion: I just feel that there is a misconception about jailbreaking that should be corrected that is causing the argument to not really follow all the way through to the conclusion. In the end, I still agree that Apple already has the control they need in this scenario, and the suggested solutions in the article would not cause them any challenges in that regard.)

The percentage of people jailbreaking their iPhone over time has not really fallen, excepting of course times when we don't have a current jailbreak (like now, but that rebounds quickly when we do as the demand is latent and pounces); I wouldn't even call it small, as it hovers upwards of 10%: of the hundreds of millions of active devices Apple has out there, tens of millions of them are jailbroken (and yes: they are often current devices; the people most likely to want the absolute newest device constantly are also the people most likely to want even more out of it and thereby jailbreak).

That said, that isn't really relevant: jailbreaking has nothing at all to do with the device testing limit on applications because jailbreaking isn't really about applications: it is about all of the little modifications we make to existing software using my Substrate library... the default repositories in Cydia actually carry an insignificant number of "applications" (something that could be installed with a developer certificate) in comparison to the number of Substrate extensions. If you told me tomorrow that everyone in the world could now get infinite developer certificate access, we in the jailbreak community would say "so what? that doesn't help us" and continue with business as usual.

The suggestions in this article are somewhat reasonable in scope, and would not affect that issue greatly; meanwhile, if there is a serious issue with a developer abusing their certificate, they expire within the year and Apple can make their lives really hard if they ever want to get another one.

I would highly recommend no longer using those buckets for fish tank cleaning. At least not for putting water back in the tank. :-)

Wait. Are you really doing that badly? You are converting, I'd guess based on your data, about 5% of your download base, which is actually very reasonable. But you are losing like 25% immediately, so your conversion of active users is actually quite higher, maybe 7.5-10%. You may be focusing on the wrong metric. I would consider instead focusing on getting downloads higher.

Additionally, I wouldn't offer the bundle packs but instead sell everything individually. I read a great article a few weeks ago on making in app purchase work for games. (I write productivity apps.) One of the things they said was have lots of ways for people to spend money. Only a small percentage of people spend so you need them to spend a lot. The comment was that the best performing games are generating upwards of $50/spending user, all via in app purchase, all from like 1-2% of the download base.

Thanks, that's encouraging.

I'm not sure about offering individual packs. That bundle is the largest-selling SKU right now. Consider that warning message that the IAP system pops up ('you are about to spend $2.99') everytime one makes an IAP purchase. With a single $3 purchase, we only have to risk the user making it past one such warning. With individual packs, it'll be one warning per pack; I think there will be a significant fall-off on the second and subsequent warnings. That's just intuition of course.

I believe 'CSR Racing' is one of the current how-to-monetize favourites. We just don't have the story and content to be in that league, sadly.

  Wait. Are you really doing that badly?

If they've made $124 I'd wager they're doing worse than their business plan calls for, because that's about 17 hours of work at federal minimum wage.

Understood. They are 1/5 to the way of what most apps make though. :-)

I meant there are multiple variables here and they are focused on conversion rate. I'm not certain they are doing that badly there. If they had a million downloads instead of 6000, the story would be different given the same conversion rates. 6000 downloads is nothing.

Personally, I'd give Apple's management the benefit of the doubt.

Sad if true, for all the hardworking companies out there that are working very hard to make a difference in customer's lives. Only overpriced products with no product/market fit can be acquired for "high double digit" millions.

Its all about relationships with people I guess. It reminds me of this excerpt from a psychology book. "People used to look out on the playground and say that the boys were playing soccer and the girls where doing nothing. But the girls weren't doing nothing- They were talking. They were talking about the world to one another. And they became very expert about that in a way the boys did not"

You can replace 'boys' with 'developers' and 'girls' with 'tech socialites'.

It's all about having backers who have fingers in pies that they can arm-twist into buying you. It also makes people who have profitable growing startups without funding like yours truly bitter as hell.

I think its probably more to do with large number of patents they claimed to have for localization and sharing. At least that was the hype at the time of their funding.

I don't think Apple buys up companies due to "hype", and considering the amount of negative press Color has been receiving as of late, that seems especially unlikely here. More likely it is a talent acquisition, or as greendestiny suggests, patents.

I can buy patents but I doubt Apple does an acqui-hire for high double digit millions.

Was there ever a time Color received positive press?

I remember when they first came out, nobody could figure out how they raised to much capital.

Except $20k per month is a pretty low threshold for "big hits". We were making significantly more than that in the Palm/WinMo hey days and weren't the exception to the rule.

Related, I also like the fact that when I purchase something it doesn't take me out of the App Store anymore but instead just starts the download.