Original URL: http://www.theregister.co.uk/2012/04/23/engineers_slate_software_economy/

Getting rich off iPhone apps is b*llocks, say UK devs

MPs told sales can't cover costs while Apple coins it

By Anna Leach

Posted in Small Biz, 23rd April 2012 12:46 GMT

Almost no apps cover their development costs and software services only make money in "extremely unusual" cases, some proper engineers have told MPs.

A panel of engineers and boffins drawn from the Institution of Engineering and Technology and the Council of Professors and Heads of Computing poured cold water on the idea of the internet economy in their response to MPs' questions about commercialising research.

Speaking through the UK Computing Research Committee, a joint group on policy, they told MPs on the House of Commons Science and Technology Committee that apps rarely made enough money to justify their development:

Software "apps" can be marketed through App Stores, such as Apple Inc’s iTunes store, but competition is intense, individual apps sell typically for 99p, and almost no one recovers the realistic costs of development...

The software engineers added that internet businesses like Facebook and Google were one-offs that only made money after long periods of soaking up investment:

Some innovative software-based services have been commercialised extremely successfully – Facebook and Google being the leading examples – but the commercial model is extremely unusual, as it requires huge investment to provide free services so that a vast population of users is developed and monetised through advertising revenue and added-value services.

Sustained initial funding was required if the UK wanted to build businesses out of research science, the group said, pointing out the example of the Fraunhofer Institute in Germany, which funded companies for up to 10 years before they became sustainable businesses.

The House of Commons Science and Technology Committee has put out a call-out for opinions on the question of turning research in science and tech into successful business. They have published the responses of 89 universities, businesses and organisations and aim to produce recommendations on what they call "Bridging the Valley of Death" or turning "successful science into successful business".

Click here for the written evidence submitted to the Science and Technology Committee on "Bridging the "Valley of Death": improving the commercialisation of research". ®