The Iconfactory, once the creator of the popular Twitterrific app, is now facing a crossroads as AI technology has disrupted its business model. With a lack of resources, the company has decided to put several of its apps up for sale, focusing on those that offer a better return on investment. While the announcement claims that the app catalog has grown too large to manage, the reality is that the business must now prioritize apps that generate higher profits.
Side products, even those with loyal customers, can no longer be maintained. The Iconfactory plans to continue working on apps like Tapestry, Linea Sketch, Wallaroo, and Tot, as well as its new Retro Pixel Portraits project. However, it is accepting serious offers for other apps, which will include intellectual property and source code.
A significant factor in the Iconfactory's struggles is the rise of AI services like ChatGPT, which have significantly affected the company's business. Iconfactory developer Sean Heber stated, "ChatGPT and other AI services are basically killing @Iconfactory, and I'm not exaggerating or being hyperbolic." The issue lies not in people using AI instead of mobile apps, but rather in how vibe coding is impacting the need for app design firms like the Iconfactory.
In addition to building its own apps, the Iconfactory generated revenue by offering app design services, including icon design, app design, marketing asset creation, branding, and consulting services. These services, which once fueled the business, are now being undermined by AI technology. "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.
The Iconfactory's struggles were further exacerbated by 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. This move put Twitterrific, Tweetbot, and other apps almost instantly out of business, leading the Iconfactory to ask its users to decline their App Store refunds to help them stay afloat.
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 various tools for organizing sources, making feeds, muting and hiding content, and more. It also allows third-party developers to extend Tapestry with add-ons called Connectors, enabling users to add even more open feeds.
While Tapestry will remain a part of the company's efforts for now, its future remains uncertain. Open social media platforms like Mastodon and Bluesky are still dwarfed by tech giants, meaning consumer demand for something like Tapestry is fairly niche.
If AI continues to commoditize the business of app making, the Iconfactory won't be alone in suffering the consequences. However, vibe-coded apps may not necessarily meet consumer needs, not only due to the lack of human input but also the lax security some of these apps offer.
Iconfactory co-founder Ged Maheux agreed that AI had "definitely put a damper on the design side of our services," though it hasn't "killed" the company yet. He also cited other factors impacting the business, such as Apple's graphical system, SF Symbols, that developers can use instead, consumers tiring of subscriptions for everything, and the cost of everything increasing over the years while the cost of apps has not, making it harder to make a living as a small business developer.
To compensate for the lost design work revenue, the Iconfactory has expanded its offerings into other areas like UX consulting, coding consultation, and side revenue services. Maheux noted that Apple's introduction of Liquid Glass has offered some new opportunities for design work and consultation, and the company has been working with a handful of companies on this, which has been hopeful.