Flip This App: Secondary Mobile App Market Quietly Taking Off 39
alphadogg writes "The practice of flipping is probably most familiar to the general public from reality TV shows like 'Flip This House' on A&E. The idea is to buy a house for a lowish price, fix it up a bit, and then sell it on to a buyer, hopefully at a profit. Now, the secondary market for Android and iOS apps is beginning to see the same pattern. App creators without the time or inclination to service or monetize their apps can simply sell them off for a flat, up-front sum of money. Buyers can then either tweak them as they like or not, and either attempt to monetize them themselves or re-sell the apps to still another party. 'Probably 80% of people who want to get involved in mobile either don't know how to code an app or don't know an app developer,' says the founder of one app trading site. 'So there's this massive demand, but kind of a little bit of a barrier to entry.'"
Missing the commissions (Score:5, Insightful)
Now, the secondary market for Android and iOS apps is beginning to see the same pattern.
I'd disagree in that the housing bubble needed a FIRE economy sector based primarily on earning sales commissions and ignoring the underlying value, which this second hand app market doesn't have.
So with a house, regardless if its a good investment or not, a whole bunch of parasites adsorbed commissions each time a property changed hands: Real estate agents on each side, mortgage broker/bank, house inspector, title insurance, credit reporting agency, advertiser/PR firms, moving company if any, house stager if any, etc etc. You can end up with quite a bubble that way because everyone wants prices to go up regardless of value... no one has a responsibility or interest in holding the price to the value.
With this, you've got, what, maybe two lawyers more or less fixed hourly fee to handle the contract issues to trade iFart apps? I'm not seeing anyone with a motivation to raise prices other than the usual suspects (sellers, clueless investors, etc).
Furthermore I'm not seeing strawberry pickers buying these things on 105% margin looking for capital gains. And the app market is not "too big to fail" so the govt will bail out the big players and leave the small fish to fry.
I'm just not seeing "bubble" here.
Not a good deal (Score:5, Insightful)
There's two main problems with this. Firstly, a lot of app developers write shitty code. I've worked on some projects that I've inherited from fairly large, well-known app developers, and even they are pretty terrible. Secondly, these people buying the apps won't be able to make substantial changes because they can't code. So where does that leave them? Putting a new lick of paint on, doing some promo work, then trying to resell? There's not going to be much money in that.
The comparison with real estate is not apt. The people who buy houses, develop them, then sell them on have two things working in their favour. Firstly, they know how to actually improve a house. As the summary indicates, the people targeted by these app trading sites aren't in this position. Secondly, the demand for real estate is growing, yet supply remains the same. You can buy real estate, hang onto it for years, then sell at a profit without doing anything. That is not true of the app market. Every day there's more and more competition with apps. If you buy an app, hang onto it and don't do anything to develop it further, it will lose more and more value and eventually be worthless.
If I were to liken the app trading market to anything, it would be sites like Flippa. These are overwhelmingly made up of auto-generated sites populated by crap to sell onto shady SEO guys - just about the lowest value there is. Good luck applying that to a market where the barrier to entry is a review process that is notoriously finicky about quality.