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Whether it’s Apple’s successes or failures that attracts the mainstream media’s attention, it always gets spun and hyped out of proportion. NewsWeek’s state of the App Store critique is just such a case study in fact shading and editorializing.

A fine example of this is the anecdote of David Barnard who “found out the hard way,” that you can make more than $200,000 in just over a year on the App Store, which is nearly 10 times the seed money he borrowed from his parents. Not only did he and his wife make that tidy sum using someone else’s money in about a year, a listing of his expenses leads me to believe he didn’t code his own software ($29,000 expense), didn’t create his own website ($4,000) or do his own administrative legwork ($5,000).

He may have put plenty of sweat equity into his products — Trip Cubby, Gas Cubby and Health Cubby ($6.99 each, iTunes) — but he also plowed a lot of cash in, as well, from revenues. And, what’s the huge unspoken irony here? He turned that $200K, creating a well-fleshed out product line (not sure I like the wooden logos), in the midst of the worst economic downturn since the Great Depression.

Rust never sleeps…

Although NewsWeek doesn’t put together an unambiguous string of anecdotes to make their case, I do believe that their “party’s over” premise is sound. The gold rush, at least for the great majority of small time developers, is likely finished and that’s due to three reasons: 1.) large, established app and game developers have moved in and are starting to dominate sales (i.e. money and resources attract more money and resources), 2.) average selling prices are so low that only players with deep pockets can stay in and 3.) the addition of millions of Flash developers (see also: Adobe opens iPhone to Flash, tsunami of crapplets to ensue), both individuals, boutiques and large companies, to the iPhone app ecosystem is going to suck any remaining oxygen right out.

Yes, there will still be opportunities out there, but they will be much harder to find and the “easy money” — a slippery concept even in the best of times — has probably played out and the scraps still available have to feed an even bigger pool of coders.

That said, in any gold rush, the guy that makes the most money likely isn’t one of those breaking his back working a creek bed, panning for tiny flakes of salvation. The guys making the real money are the ones in starched shirts selling prospecting supplies and services…

What’s your take?

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Filed under: Apple Evangelizing, Software, Steve Jobs, iPhone, iPod