It turns out to not be all that easy and to this day, a couple years after first reading 4HWW, I’m still nowhere near my goal.  But the project is still going strong and some passive, SWISS cash is actually getting into my hands (albeit not nearly enough to live off of).

I’ve decided to incorporate some monthly summaries of this snail pace project into my blog. I present the first of hopefully many more articles that summarize my monthly “passive” earnings.

The “passive” earnings breakdown for July 2011:

July 2011 was actually a record “passive” earnings month, believe it or not.  For some strange reason I pulled in more than usual AdSense revenue (though just $23) and also managed a couple of affiliate payments (truthfully my first affiliate payments, and they were also exceptionally small). The bulk of the earnings, however, were from my apps.

I’ve had an iOS app, WOD Timer, in the wild for a couple of years now and despite not touching it in just as long, it still manages to pull in between $100 to $200 per month.  But this month also included earnings from two newer BlackBerry PlayBook apps that managed to snag me over $250 in July.

Although I call this income “passive”, over the last couple of previous months, I spent quite a bit of my free time working on the PlayBook apps, so it’s hardly passive.  Fortunately both of these apps are in a good position now and, like WOD Timer for iOS, I don’t expect to be working on them much in the foreseeable future while they continue to work for me and “passively” deposit some dollars in my bank account.  Though I do expect to finish yet another app in the next month and I’m feverishly trying to find time to do so.

I don’t have the numbers off hand, but I believe that last year at this time I was making less than half of July’s earnings.  If my doubling rate is anual, I’m hoping for at least $1000 per month in “passive” cash in July 2012.  Of course, that’s assuming we make it there and that cash is actually worth anything when we do.

So it’s been a few days since my latest app release that employs iAds.  And in short, the earnings on it are absolutely abysmal.  Since the release on Thursday, I’ve only seen about 50 cents.  I’m fairly disappointed, to say the least.

During the first couple of weeks that Apple’s iAd network was running, there were discussions around how certain individuals were racking up the cash on their iAd apps.  I’m becoming more and more convinced that this was only due to the novelty that the iAds were and that as time goes on, those dollar signs will decrease (as I have seen first hand).

I took a look at my analytic reports closely and cannot see how iAds would be at all lucrative.  The number of ad impressions that an app shows is a fraction of the number of times that the app sends a request for an ad.  In my case it works out to a single ad impression every 5 times someone opens the app.  Apple is referring to this as fill rate and I think it is so low only because at the current time only the US and UK are displaying ads.  So take this low fill rate (something well under 25%) and then multiply that by an even lower click through rate (something around 10% probably) and that is the probability that someone will click through an ad in your app.  And that sucks.

To determine how many ad requests my app would need in order to see earnings of $1 (yes – a buck), I worked out the forumula

Fortunately eCPM is pretty good for the most part.  Suppose an eCPM of $25, which is 4 to 5 times higher than my daily average, but is a number that I’ve seen.  That means that for every 1000 ad impressions, Apple is estimating that based on the current click through rate and per click bid amount from advertisers, I should get roughly $25.

Using the formula, in order to see a single dollar in iAd revenue, 222 requests would be required!  To see $10 then, 2220 people would need to run the app.  And so on. To make $10 with a 99 cent app you’d only need roughly 15 people to download it.

Now let’s fast forward a couple of years and assume that Apple has a much larger advertiser base and more countries showing ads, resulting in nearly a 100% fill rate.  How many requests would be necessary to see $1 from iAds?  Well, with that high $25 eCPM, that would equate to 1000/25 = 40.  It still sucks.  It would take 40 requests for me to see just a dollar. Assuming that the eCPM will remain high and that you had a 100% fill rate and you were able to get 5000 people to open your app on a daily basis, you could see a daily earnings of $125.

And in a nutshell, I think for the most part, that blows.

Zinio – I used to buy magazines like crack. Not only was this an expensive habit, the issues of Harpers, Men’s Health, High Times and Thrasher piled up in the office was a little out of hand. I eventually went cold turkey and stopped buying them. But now I can finally get back into the habit. Only this time without the clutter and at a reduced cost with Zinio and the iPad. Zinio isn’t strictly for the iPad, but their iPad app is slick and the quality of the magazines is phenomenal on the iPad’s screen. Although magazine subscriptions do cost money (less than a physical copy subscription) the app is fortunately free and every month a smattering of articles are available from popular publishers free for your perusal. The Zinio magazines also offer similar features as that single five dollar issue of Wired that everyone seemed to buy at launch (except at a fraction of the file size – what was with that 500 mb file size anyway?).

Good Reader – I have a whack of pdf’s (all legit, of course) and word docs and other files that the iPad doesn’t really support outside of maybe email. Good Reader lets users load their device with these files and read them later through a pretty swanky interface. The process for uploading files to the iPad with Good Reader is incredibly simple too. Start Good Reader then navigate from your computer to the URL provided by the app. the Good Reader app hosts a website that lets you browse to your files and upload them with a click of a button. I also found the uploading to be fairly snappy, compared to the uploading process that some other pdf reading apps offer.

Skype – sure they don’t have an official iPad client yet, but the iPhone version actually works incredibly well on the iPad. Maybe it’s the peppy processor or something. I found that the sound was very good and the mic picks up my voice no problem at all. Besides, you certainly don’t need crisp graphics with the Skype app. Blow it up with the 2X iPhone to iPad conversion button and your fat fingers won’t have a problem dialing any numbers on the big iPad screen (and if your fingers are still too fat, you can fortunately smash the keypad with the palm of your hand to get voice assistance… just kidding… but I do love that episode of the Simpsons).

Tweet Deck – you Twitter? This is my favorite Twitter client for the iPad. It’s free and has no advertising. Bonus. And the slick portrait mode takes advantage of nearly every iPad UI element available. Clicking on links in tweets simply opens them in an integrated browser control in the upper half of the screen, allowing you to continue to scan your twitter feeds at the bottom. Of course, all the other great Tweet Deck features are there as well including multiple accounts, list integration and classic style retweets.

RDP is a Remote Desktop client for the iPad, supporting the Remote Desktop Protocol.  This app is fantastic.  Sitting on my couch, I can quickly log into my Windows box and check the status of a long running download or 3D rendering.  There’s both a regular version and a lite version.  The lite version makes it difficult to scroll and move windows around and stuff, but it’s decent for a quick login.

If you asked me 4 years ago if a multi-touch 3.5 inch screen mobile phone with great software support would be an amazing seller, I would have said yes, regardless of which company produced it. It was exactly what the general consumer didn’t know they needed. The iPad though? It can’t be carried in one’s pocket. Face it folks, it has limitations:

• can’t take pictures.
• wouldn’t be a very good portable music player.
• certainly wouldn’t be useful as a phone.
• no FLASH support
• no multi-tasking

At least that’s the kind of criticism I hear about the iPad – even from the zanny Apple lovers. And when most people speak positively about it, I don’t hear much that would convince my mother that the iPad was something she needed. When I asked my nephew what he thought about the iPad, he almost started foaming at the mouth. But when I ask what it is about it that he likes, his vague descriptions made it sound like the iPad is simply a large-screen iPod that is less effective than my $250 netbook. To some extent, perhaps it is.

But I believe that most people’s expectations of what the iPad should have been was grounded on, more or less, in what the iPhone and netbook or laptop are. The iPad will be neither of those. And it wasn’t meant to be.

• the smart phone or mobile device – fits in the palm of your hand
• the netbook or laptop or desktop – to do things that would otherwise require a keyboard and large(er) screen (not necessarily just email – documents, programming, photo manipulation, etc)

So where does the iPad fit in? It’s a tablet and as such fits squarely (with rounded edges of course) between the mobile device and netbook/laptop. It may be able to do some of the things that both of those devices can do, but will definitely not surpass them in their ability to do various specific things well (phone, writing, programming, music player, photoshop, etc).

The challenge that will face most consumers is getting over their expectations. I forsee lots of unsatisfied iPad buyers on launch day.

There is also a challenge facing software developers targeting the iPad. You can simply take your iPhone apps and blow them up for the larger iPad format. Doing so, however, don’t expect much. Those iFart apps lose their luster on the larger format. Or not… fart noises are still hilarious. But you get the idea. The iPad requires remodeling, rethinking, a different approach.

The question remains – what are some of the practical applications for the Apple iPad? Let’s not really discuss specific apps, but more target markets… I’ve been thinking about this and have some ideas.

Clipboarders - Anyone who would carry a clipboard or visit clients. This includes real estate agents, insurance agents, door to door solicitors, FedEx carriers, physicians, auditors, fitness professionals… the list goes on and on. Each of those markets could likely benefit from niche applications catering to what they would otherwise do with a clipboard or perhaps on a laptop.

Couch surfers – This market includes people who semi-casually want to look something up or show someone something while at home, probably sitting on the couch (or other place, unfortunately probably also including the toilet for some). Could be movie listings, the weather, photo albums, the family tree, security cameras feeds, youtube videos, TED Talks, vodcasts, Discovery Channel tv shows that you can’t watch because the rest of your family is hogging the tv… This list is endless. Sure these applications could possibly work just as well on a different device, but the iPad definitely has a market for these kinds of things and this is the kind of market that most developers will likely target.

Readers – People do still read books. Sure the iPad may not be as good as an e-ink device for reading, but I’m sure the market for ebooks on the iPad will be huge. I’m also sure that many iPad owners will additionally own a Kindle or other ebook reader that is specifically made for such a task. We aren’t heading to a single device World any time soon.

Makers – The makers market is probably one of the smaller markets that could be targetted by the iPad. Programmers would obviously have a hard time writing anything of any significance on the iPad. Writers would likely be somewhat unproductive at writing their next novel without a true keyboard. But for cooking, baking, music making, finger painting, proofing and other things that don’t necessarily require external input devices, there is room for some innovative applications. Of course, Steve Jobs is anti-stylus for some reason. He was quoted as saying “yuck” regarding a stylus. The lack of which means less impact to the maker market. The inability of the iPad to use a regular stylus may not be a huge constraint though as there are indications that third party companies have created a compatible stylus. Having this would no doubt increase the market penetration of the iPad on the maker category.

Gamers – This is obvious. At the iPad press conference, some low key uninspiring game demos were shown. I’m not convinced that driving games will rock on the iPad as much as they do on the iPhone, but there is no doubt an incredible oportunity for game developers to port or create for the iPad. With the larger screen dimensions, even two player board games are possible. Checkers or Go anyone??

Expectations that the iPad would be a device all encompasing in its ability to adequately handle all activities from A to Z is unrealistic. Also unrealistic is the idea that the iPad should have features that simply work better on other devices. It is not a camera nor is it a mobile phone. The iPad is what it is and will be successful in its own right. When I want to talk on the phone I will use my Blackberry. When I want to listen to music, I’ll use my iPod. To take a picture I’ll continue to use my SLR and to read an ebook from the comfort of my couch, well when the iPad comes out, I’ll probably use that.