From my Inbox: GarageBand and sustainable businesses

I got some great feedback on yesterday’s post about Apple and sustainable apps. I wanted to highlight one email in particular.1 A reader writes:

Another way of framing the situation is by contrasting iOS hardware and OS releases against App Store monetization options. Hardware (CPU, graphics, RAM, display resolution) and iOS (APIs and frameworks) have consistently outpaced monetization innovations. The gap grows wider every year, and will do so again with the launch of iOS 7 and new devices this fall.

I consider GarageBand for iOS the example par-excellence of the kind of apps not being made. GarageBand is over two years old now, and is still unrivaled by any third-party iOS app in technical breadth and depth. It uses every ounce of hardware and OS power it can muster. A faster iPad means a snappier, more robust GarageBand experience.

It would be an interesting thought experiment to estimate gross sales revenue for GarageBand and contrast it with an educated guess for the capital it would require to hire the engineers, designers, and musicians needed to build it. I would not be surprised if GarageBand is an enormous loss-leader for Apple.

One mistake I’ve made in this series is not being precise about what I mean by a sustainable business. In fact, I’ve gotten a fair bit of feedback from developers who work alone and make a living on the app store.

That’s fine as far as it goes, but truly transformative apps, like Photoshop a generation ago or GarageBand today (or Paper), require true, multi-employee businesses. And, it’s precisely those types of businesses – outside of casual games – that don’t seem viable as app store-only endeavors.

In fact, the GarageBand example does more to reinforce my argument than any other app. As I wrote yesterday:

But there have been downsides to this paranoia. Apple’s inefficient use of its cash is the most famous, but I think developer hostility is an aftereffect as well. I would go so far as to argue that that Boston keynote was at the root of Jobs’ opposition to any 3rd-party apps on the iPhone, much less app store policies that enable sustainable businesses. Never again would Apple be held hostage to an app that was bigger than Apple.

Most of the best, most technologically complex productivity apps on the iPad – GarageBand, iPhoto, iMovie, iWorks – are made by Apple.2 I agree with my reader: they’re certainly an enormous loss-leader, but crucially, Apple controls them. That’s something that Apple has always considered priceless.

  1. Consider this post an experiment in Andrew Sullivan-style reader interaction []
  2. An interesting counterfactual is the OmniGroup; I’m really curious how they’re doing. Obviously, they eschew typical app store prices []