I wrote this in August 2012:

I just spent a few days camping in the middle of no where in central Oregon. … The forests in which we stayed are decades if not centuries old and over that time period the trees have grown quite large. We saw some that had to be 200 to 300 feet tall. But those trees form a canopy and that canopy keeps rain and sun from getting to the forest floor, snuffing out new trees in the process. Eventually, though, these trees die and fall over [whether due to age, fire, or some other natural event]. Not only does sun and rain get to the forest floor but these trees are stock-full of nutrients that new sprouts use to grow. These fallen monsters are called nurse logs.

Marco Arment, in one of the best posts he ever wrote, believes iOS 7 is the brush fire we need to revitalize iOS development:

The App Store is crowded: almost every common app type is well-served by at least one or two dominant players. They’ve been able to keep their leads by evolving alongside iOS: when the OS would add a new API or icon size, developers could just add them incrementally and be done with it. Established players only became more established.

iOS 7 is different. It isn’t just a new skin: it introduces entirely new navigational and structural standards far beyond the extent of any previous UI changes. Existing apps can support iOS 7 fairly easily without looking broken, but they’ll look and feel ancient.

I have to admit I was feeling down after last Monday’s keynote. The fundamental shift was apparent to me even at a glance and I knew we were stuck between the old design and interactivity paradigms of iOS 6, paradigms perfectly represented in powerOne, and the new vision for iOS 7.

At the same time powerOne calculator is an aging product that, mostly due to app store dynamics, has not been a cash flow positive endeavor but a product nonetheless that we love and have supported for over a decade. I felt trapped: sticking with the old design and interactivity decisions in the current version of powerOne or investing a lot of time and effort into a product that doesn’t pay for one developer, let alone the small company we are.

Then I read Marco’s post and it reminded me that all things that die sprout new life, that this change isn’t just an opportunity to present powerOne again, but also make some fundamental changes that makes it more valuable to both you and me. Back to Marco:

This big of an opportunity doesn’t come often — we’re lucky to see one every 3–5 years. Anyone can march right into an established category with a huge advantage if they have the audacity to be exclusively modern.

I’ll be invading one as soon as I can. Here’s hoping I’m right.

Disrupt or be disrupted. I hear you, Marco, and I’m following right behind you.

We have seen a pretty significant drop in sales over the past 12 months. I spent much time first beating myself up over not adjusting faster and then forgiving myself and trying to understand why it occurred. I have come to four conclusions of what could be impacting our sales:

Increased Competition: We were, for the longest time, the king of iPad calculators but the number of apps available specifically for iPad has increased over the past year. [1] In particular, HP launched its 12c version specifically for iPad and we worked with DEWALT to build a version for construction, eating into our finance and construction sales. This caused a little softening in the second quarter but wasn’t enough to make us worry. We did play with pricing in the summer to see the impact, something I still mean to write about here. The bottom line on that one: more unit sales, less revenue, not worth it.

App Store Changes: With the release of iOS 6 in October, Apple changed the App Store’s presentation. I think this had two effects: 1) it emphasized apps named the same as their search terms and 2) changed how far into any search results a customer was willing to go. For the former, apps named “checklist” or “calculator” are overemphasized in the App Store as those are terms people search for. In our case, almost every one of our powerOne apps has a competitor named by the search term: mortgage calculator, finance calculator, scientific calculator, etc. Since Apple emphasize exact name matches, these apps always end up at the top of the list. Regarding the latter, the shift from a list of apps to cards means customers don’t look at more then the first couple of apps. Previously it was easy to look at 25 or 50 options quickly. (Image from VentureBeat.)

Shift to International Markets: US smartphone market penetration now exceeds 50%. I believe this means that products primarily geared around the US market will see slowing sales. Apps who have broad appeal beyond US borders should do better, although Europe too is at or near 50%. powerOne apps are heavily geared around both US mathematics and English language.

Shift to Consumers: I also believe we are experiencing a shift from professional customers to consumer ones. The earliest adopters of iPhone and Android smartphones were, logically, professionals. They could write off the price of the expensive phones plus had the most need to carry portable computers in their pockets. They were also trained for years by Palm and BlackBerry to think about pocketable computing. Our products are heavily geared toward professionals, many of whom have already bought a powerOne product. As the new smartphone buyers become more consumer-oriented, there is less need for productivity apps and thus our sales weaken, even as the entire App Store’s sales escalate.

This, of course, is all speculation. There is no way of really knowing what has happened. If I was a betting man, though, I’d bet on a combination of these factors.

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[1] I couldn’t find a 2012 number but there were 60,000 iPad specific apps in January 2011 and 275,000 in October 2013.