Design and development shop the Iconfactory is selling some apps — and AI is partially to blame
In a significant shift that underscores the evolving landscape of the tech industry, The Iconfactory, a renowned design and development firm behind iconic apps like Twitterrific, is facing challenging times. The company has announced it is putting several of its long-standing applications up for sale, citing a severe lack of resources. While initially framed as a capacity issue due to an expanding app catalog, the deeper reality, as revealed by company insiders, points to the disruptive impact of Artificial Intelligence and other market pressures.
The Iconfactory’s co-founder, Ged Maheux, acknowledged the crossroads, emphasizing the necessity to prioritize apps that offer a stronger return on investment. This difficult decision means side products, despite having a loyal user base, can no longer be sustained. The company intends to continue developing core apps such as Tapestry, Linea Sketch, Wallaroo, and Tot, along with their new Retro Pixel Portraits project. However, they are actively seeking “serious offers” for other intellectual property and source code.
A major contributing factor to The Iconfactory’s predicament is the rise of AI. Sean Heber, an Iconfactory developer, starkly expressed the sentiment on Mastodon, stating, “ChatGPT and other AI services are basically killing @Iconfactory, and I’m not exaggerating or being hyperbolical.” The issue isn’t that users are abandoning mobile apps for AI directly, but rather how AI is commoditizing the need for traditional app design and consulting services, which have historically been a significant revenue stream for firms like theirs. These services include icon design, app design, marketing asset creation, branding, and consulting – areas where AI tools can now generate solutions rapidly and inexpensively.
Heber lamented the shift, noting, “I know nothing I say is going to get anyone to stop using ChatGPT and generating a new app icon in 5 minutes for the app that you also had ChatGPT write for you in a few hours, but I’m not sure what the rest of us are supposed to do about making enough money to, ya know, live.”
The Iconfactory’s challenges were compounded by the 2023 shutdown of Twitterrific, their once-flagship iPhone app for browsing Twitter. Elon Musk’s decision to officially ban third-party clients led to an immediate cessation of business for Twitterrific and similar apps like Tweetbot. This event forced The Iconfactory to make an extraordinary request to its users to decline App Store refunds, highlighting the severe financial strain. Heber elaborated on the dual blow: “First Twitter/Elon killed our main app revenue that kept the lights on around here, then generative AI exploded to land a final blow to design revenue.”
In the aftermath, The Iconfactory launched Tapestry, an app designed for tracking sources across the open web, including RSS feeds, YouTube, Bluesky, Mastodon, and more. While innovative, Tapestry operates in a niche market compared to the widespread appeal Twitterrific once enjoyed. Heber admitted that Tapestry’s Kickstarter was a “Hail Mary,” and current subscription numbers are not sufficient to fully offset the revenue lost from Twitterrific.
Maheux, while agreeing that AI has “definitely put a damper on the design side of our services,” clarified that it hasn’t “killed” the company yet. He pointed to factors beyond AI, such as Apple’s graphical system (SF Symbols) offering developers built-in alternatives, consumer fatigue with subscriptions, and the increasing cost of doing business juxtaposed against stagnant app pricing. The Iconfactory is adapting by expanding into UX consulting, coding consultation, and exploring new design opportunities like Apple’s Liquid Glass.
The Iconfactory’s experience serves as a stark reminder of the rapid changes in the tech industry, where long-established business models are being upended by emerging technologies and shifting platform policies. The struggle highlights a broader concern about the future of human-centric design and development in an increasingly AI-driven landscape.
