How to Build A Killer App Business—According to Apple
If you ever wanted to make big money by creating a mobile app business, Apple has a few pointers.
The tech giant this week updated its App Store developers site to include a series of tutorials, case studies, and other information about how developers can grow a business around the apps they create.
Apple’s (AAPL) site includes a “Developer Insights” page, which explains how app developers Seriously, Grailr, Evernote, and Smule, all built businesses out of their apps. Seriously, for instance, used social media to market its brand, while Evernote tried to localize its note-taking app making its service available in different languages to better appeal to a worldwide audience.
Perhaps most importantly, Apple has provided some much-needed clarity for app developers to learn how they can get their programs noticed. The company explains how users “navigate the App Store and how our editors choose apps to feature.” Apple also explains the pros and cons of different app business models, selling apps in bundles, and offering subscriptions.
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Apple’s App Store has 1.5 million apps, making it difficult to get noticed and build a business. However, for those companies that do get noticed, it’s not uncommon for development houses to be bought out by larger firms and for creators to become millionaires overnight.
In January, Apple, which takes a 30% cut on all app and in-app purchases, announced that it had paid out nearly $40 billion to developers since the App Store’s inception in 2008. What’s more, the company added that more than one third of that revenue was generated in 2015, alone.
Having a strategy for actually making money, however, is critical.
In a study released last month, app-marketing company Sensor Tower found that U.S.-based consumers spent an average of $35 on apps last year. The average American spent $25 on games, making that category by far the best way to make a buck. The second-place app, music-related programs, generated an average of $3.40. Social networking, entertainment, and “lifestyle” apps also landed in the top five, with users spending an average of $1.80, $1, and 40 cents on them, respectively.
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Sensor Tower had its own ideas for developers, saying that creating a game might be the best way to secure an “install.” In fact, the company said that the average iPhone owner last year downloaded about 10 games and three “photo and video” apps. They also downloaded three social networking apps and “nearly three” entertainment programs.
“Of the remaining 18 categories with downloads during the period, Music saw the most with 2.2 installs on average, while Catalogs saw the least with 0.17 per device,” Sensor Tower said in a statement.
While Apple didn’t say what kind of apps developers should create, the company’s developers site is a useful tool for anyone trying to build an app business. But ultimately, as Apple notes, the best way to be successful is build “great apps.”