How Apple Feeds Its Army of App Makers

Let them make money, ensure the coding tools are easy to use, and keep out the riffraff

As he has for each of the past 14 years, Andrew Stone woke at 3:45 on the morning of Apple's (AAPL) annual Worldwide Developers Conference on June 6 in San Francisco, grabbed his yoga mat, and joined the queue of techies waiting to be let in for Steve Jobs's 10 a.m. presentation. The gangly Stone, a former architect who has written software for Jobs's machines since the 1980s, revels in talking tech with fellow Apple geeks, particularly the Europeans and Asians who often save a night's hotel fare by spending the night in line.

This year, more than ever, the good mood was powered by something other than camaraderie: Developers are making money, getting lots of contract work. "You have no idea how many people around here are overjoyed," says Stone, 55, who flew up from his home in Albuquerque the day before. He recalls far leaner years, when many struggled to come up with the $3,000 or so for the conference fee and travel. "Now, good developers can make almost as much money as they want."

The scene outside the conference hall is a snapshot of the war Apple is waging for the hearts and minds of developers. The scale and diversity of Apple's app universe—425,000, roughly twice as many as Android's—is a big reason consumers have purchased more than 200 million iPads, iPhones, and iPod touches. In his WWDC talk, Jobs laid out a post-PC vision of online services that will open up vast opportunities for programmers to come up with new kinds of software. "We're going to demote the PC and the Mac to be just another device," Jobs told the crowd. "We're going to move the hub of your digital life to the cloud." He announced a new service, iCloud, that will ensure any photo, music, or other file that is downloaded or changed on your iPhone is automatically, wirelessly synched to any of your other Apple devices and vice versa. A new iMessage will make it simpler to communicate via text, voice, and video. The basic iOS operating system has been improved, which will make it easier to snap pictures, share files, or find an article. To the extent that Jobs can persuade consumers not to bother with non-Apple products, his pull with developers may increase as well.

Freelance developers such as Stone tend to be an idealistic, egalitarian bunch, suspicious of big companies intent on telling them, or consumers, what to do. And yet Apple has expertly played on their pragmatism—programming tools are slick and simple to use, for example. The main reason there are so many more apps available for Apple products is that there are more ways for developers to make money on them. Consumers have paid more than $4.3 billion for apps sold on Apple's App Store. That includes the original purchase, plus upgrades and ads that appear within the apps. Eddie Marks and his college roommate haven't even bothered to count up the winnings from the ads that appear on their free app, which lets iPhone users simulate the sound of cocking and firing a shotgun. "We've made more than $1 million," says Marks, whose initial goal was simply to raise rent and beer money until he could find a job after graduation in 2008. "It could be $2 million, but I doubt it."

Apple hasn't monopolized developers' attention. According to a survey by market research firm Evans Data, the percentage of developers writing apps for Android (43.5 percent) just passed the share working in iOS (39.7 percent). While Apple dominates a certain high-end niche, Android has been adopted by almost every other phone maker and wireless carrier. Throw in the hundreds of millions of devices running BlackBerry, Microsoft (MSFT) Windows Phone, or Nokia's (NOK) Symbian, and "there's very little exclusivity in the mobile development space," says Evans Data Chief Executive Officer Janel Garvin.

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