iOS Developers Wouldn't Come to Android or Windows If You Paid Them. Literally.

Last Updated Jun 22, 2010 1:29 PM EDT

As app developers get rush to get the "iOS 4 Tested" seal of approval from Apple's (AAPL) App Store, Google (GOOG) and Microsoft (MSFT) may have more and more trouble pulling those programmers away to work on Android and Windows 7 Phone.

The iOS 4 push, though, isn't a fleeting symptom. Apple's mobile platform is becoming ever-deeper and more robust, even as it becomes more proprietary. For developers with limited time and energy, the multi-platform approach may no longer be appealing. Here's why.

Apps are getting deeper. With the proliferation of third-party APIs like MasterCard's (MC) payment system and the growing number of Apple's own frameworks, iOS developers have more and more tools to work with. That's great because it means more capable apps, but it also creates a steep learning curve: with every subsequent release of the iOS, and every few months that pass, more capabilities bubble up. That's more learning, more time, and more intellectual investment -- and it's all happening inside Apple's developer environment, the only IDE that works with iOS. Not only that, it's happening in Objective-C, Apple's own flavor of the popular C language.

Bigger and bigger payoff. For iOS developers, the App Store has been astonishingly profitable, and has single-handedly made software profitable in myriad new ways. But the iOS has only just begun to show off its earning potential. Because of the increased screen size of the iPad, and the increased processing power under the hood of iPhone 4, apps are doing more, and users are willing to pay for the marginal utility. New high-price apps like BarMax, a $1,000 app that helps law students prepare for bar exams in California and New York, have demonstrated that niche apps can sell to a long-tail of customers and still be wildly profitable. TechCrunch summarizes the niche economics well:

... [O]ver 100 students have downloaded the app so far. That may seem like nothing, but remember, we're talking $1,000 here. That means the app has rung up over $100,000 in sales -- in case it's not clear enough, that's the same as a $0.99 app being sold 100,000 times. In fact, these 100+ sales have been enough to make the entire venture profitable...
Advertising as cement. For developers that can't (or won't) charge big bucks for their apps, the rollout of iAd with iOS 4 means lucrative new reasons to stay primarily on the iPhone platform. Because of Apple's high-profile advertising clientele, in-house art and huge minimum price, iAds are going to look slick, work well and present users with big brands that sport wide appeal. Not only that, they're going to drive up the price of media buys for other iPhone ad platforms, too -- meaning more advertising money that can trickle down to developers. Oh, and Apple has also cleverly excluded Google from getting in on the action. Google and Microsoft can't help themselves. For the platform teams that are building out Android and Windows Phone, the most frustrating part about the prospect of losing developers must be that their own companies are helping turn the iOS into even more of a killer platform. Google's tremendous HTML5 push -- evidenced by their slick mobile Web apps like Gmail and Google Voice -- and its ongoing effort to convert all YouTube videos into H.264 format, via HTML5, shows implict support for Apple's preferred formats, even as Google's principals pay mouth service to Adobe (ADBE) Flash. (If that last sentence felt like a conveyor belt of jargon, think of it this way: Google is using the same technologies as Apple -- and when Google supports something, it effectively becomes a Web standard.)

Microsoft, for its part, is going even further than Google, which is mostly focused on Web apps. Redmond's search engine, Bing, just released a native iPhone app on June 22 that boasted some pretty killer features, including real-time trend searching and a feature that lets you find products by snapping a picture of the label or bar-code.

You can't even pay them. It should come as no surprise then that both Microsoft and Google have been trying to pay developers to switch platforms -- and it's not working. One San Francisco game developer (for iPhone) has reported receiving calls nearly every day from Google and Microsoft platform flacks offering him cash to make the jump. He has declined, he says, because the Apple OS is the only "commercially viable" one.

Apple fanboys might see this as evidence of victory. But the truth is that competition serves all ends: we're all better off with several competitive mobile platforms than one clear leader. But the stars may not align in favor of healthy competition. Should Apple's competitors keep failing to recruit developers, the FTC may look into iOS more seriously.