I was reading a debate this morning about whether or not putting ads in your mobile app was a sustainable thing, or whether it could "pay the bills." Most of the arguments against it made the case that the revenue was too small. I think that depends.
The thing about phone apps is that the vast majority of them have niche uses. Some may shape up to be huge, but most will not. If your niche is small, do you think people will pay a buck for it? Two? They might. The problem is that there's a pretty long curve you have to scale there. If people aren't willing to pay for your app, would they be willing to use it for the price of being subjected to ads?
My gut says yes. A friend of mine did an Android app, mostly as a science project, and he has steadily made a couple of bucks a day. Baby Stopwatch (also a science project) makes nearly a buck a day. Who would really pay for that? Ads are the only chance it has of making money.
It makes me wonder if there's a long-tail prospect for a small company to crank out a bunch of simple apps and generate nominal revenue. As I wrote previously, success is relative. I don't think I would be interested in doing that, but how long before we see a story in Wired about someone doing just that?