Design and development shop the Iconfactory is selling some apps — and AI is partially to blame

At one point, an app called Twitterrific was one of the most popular iPhone apps for browsing Twitter. These days, the company behind that app, and the many apps that followed, is struggling. And AI may partially be to blame.

On Wednesday, the company known as the Iconfactory admitted it was at a crossroads and was putting up several of its apps for sale due to a lack of resources. While the announcement positioned the matter as a situation where the Iconfactory’s app catalog had simply grown to include too many apps to keep up with and not enough time to do so, the reality is that the business today has no choice but to focus on the apps that offer a better return on investment.

Side products can no longer be maintained, even if they have “loads of happy and loyal customers,” as the Iconfactory’s co-founder, Ged Maheux, says.

The company says that it will continue to work on apps like Tapestry, Linea Sketch, Wallaroo, and Tot, as well as its new project involving Retro Pixel Portraits, but is accepting “serious offers” for the other apps. These sales will include intellectual property and source code.

Of particular interest is that the company points to AI significantly affecting its business as the reason.

“ChatGPT and other AI services are basically killing @Iconfactory, and I’m not exaggerating or being hyperbolical,” Iconfactory developer Sean Heber said in a Mastodon post earlier this month.

The issue isn’t that people are using AI instead of mobile apps, but how vibe coding is affecting the need for app design firms like theirs. Besides building its own apps, the Iconfactory generated revenue by offering app design services, which include things like icon design (hence the name), app design, marketing asset creation, plus branding and consulting services.

These services helped fuel the business that’s now being destroyed by AI. “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,” Heber wrote.

Another issue for the longtime app makers at the Iconfactory was the shutdown of its most popular app, Twitterrific, which was killed by Elon Musk in 2023 when the company (now known as X) officially banned all third-party clients. The move put Twitterrific, Tweetbot, and other apps almost instantly out of business, leading the Iconfactory to plead with its users to decline their App Store refunds to help them stay afloat.

That, too, has affected the Iconfactory’s future, Heber admitted in his posts.

“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,” he wrote. “I think perhaps because @Iconfactory design is quite good people have this impression that we’re sitting here on a pile of money or something and some huge powerhouse — nope. We’ve been barely making it since Elon/Twitter. There’s only 6 of us and there’s no war chest.”

After shutting down Twitterrific, the Iconfactory turned to the open social web as a way to generate a new revenue stream. It launched an app called Tapestry, which allows users to track sources across the open web, including RSS feeds, YouTube, Bluesky, podcasts, Mastodon, Reddit, Tumblr, Micro.blog, and others. The app offers a variety of clever tools for organizing sources, making feeds, muting and hiding content you don’t want to see, and more. It also offered a way for third-party developers to extend Tapestry with add-ons called Connectors, allowing users to add even more open feeds.

That app will remain a part of the company’s efforts for now — a Mac app is in the works — but even its future could be uncertain. For one thing, open social media platforms like Mastodon and Bluesky are still dwarfed by tech giants, which means consumer demand for something like Tapestry is fairly niche.

As Heber shared, the app’s Kickstarter was a bit of a “Hail Mary” on the company’s part, but people aren’t subscribing in great enough numbers to make up for the revenue that Twitterrific once brought in, he said.

If AI continues to commoditize the business of app making, the Iconfactory won’t be alone in suffering the consequences. But vibe-coded apps aren’t necessarily what consumers need, not only because of the lack of human input, but also the lax security some of these apps offer.

Reached for comment, Maheux agreed that AI had “definitely put a damper on the design side of our services,” though it hasn’t “killed” the company yet.

“Many indie developers have adopted AI for an inexpensive or free solution for graphical work like app icons, which has been a core part of the services we offer. We still do, of course, but the frequency of developers coming to us for these services has declined greatly in the last few years,” he told TechCrunch via email.

He also cited other factors impacting the business, like Apple’s graphical system, SF Symbols, that developers can use instead. Consumers are tiring of subscriptions for everything. Plus, he points out that the cost of everything has increased over the years, while the cost of apps has not, making it harder to make a living as a small business developer.

“We’ve had to expand our offerings into other areas like UX consulting, coding consultation, and side revenue services to try and make up the revenue from this lost design work. Apple’s introduction of Liquid Glass has offered some new opportunities for design work and consultation, and we’ve been working with a handful of companies on this, so that’s been hopeful,” he noted.

Updated after publication with company comment.