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Low App Store pricing squeezing developers?

updated 09:50 am EST, Wed December 10, 2008

App Store pricing squeeze

The current pricing schemes at the iTunes App Store are making it difficult for developers to operate, claims Iconfactory engineer Craig Hockenberry. Involved with the creation of apps such as Frenzic and Twitterific, Hockenberry has published an open letter to Apple CEO Steve Jobs, complaining that the current structure of the App Store leads to a plethora of what he terms "ringtone apps," designed to be cheap instead of functional or well-made. The vast majority of titles are free or just 99 cents, to the extent that a rapid dropoff begins at the $1.99 pricepoint.

The App Store is built to give prominence to 99-cent apps, says Hockenberry, and this means that developers will often choose to pander to that market in order to reach a larger volume of customers. People are also unable to gauge the quality of a $2.99 app versus a 99-cent one, due to only having access to screenshots and a text description before reviews are submitted. Given a choice people will frequently choose the 99-cent app, since there is less to lose if it proves to be a bust.

Hockenberry further notes that quality is discouraged by the economics of development. To break even on a three man month project may require upwards of 115,000 downloads, while working on something worth six or nine man months can require between 215,000 and 322,000 downloads, a virtually impossible target. Raising an app's price might theoretically compensate, but the diminished appeal would be counterproductive. This is why Iconfactory concentrates on lower-cost apps, says Hockenberry.

by MacNN Staff

(26)

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iPod, iPhone, iPod touch, industry, developer, iTunes, App Store

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johnsou
Fresh-Faced Recruit

Joined: Mar 2008

+9

12/10, 10:10am | report spam | close Reply |
I Disagree

One of the more expensive mainstream apps " BeejiveIM" is priced at $15.99. This app has over 700 reviews and has almost a 5 star rating. There are many other examples of apps from $4.99-$9.99 range that are of the same quality and rating.. If you build a super high quality app that is unique and provides value then people will buy and will jump at the opportunity to drop there money.. some developers also have a light limited function version so they can test it out first. Also i think i know of a voice recorder that is free with ads or $4.99 without that has great reviews, Griffin Italk. So in retrospect if you build it " they will buy it".

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chelsel
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Joined: Aug 2007

-31

12/10, 10:11am | report spam | (1 reply) close Reply |
all will be free soon

Open source has proved that free is the future of software... without patent protections of software that is the ultimate destiny.

sammaffei
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Joined: Sep 2004

+8

12/10, 10:22am | report spam | close Reply |
Open source = not eating

chelsel = idiot

horvatic
Fresh-Faced Recruit

Joined: Apr 2002

+7

12/10, 10:26am | report spam | (1 reply) close Reply |
That's not what I've read

Funny, I've read that most of these developers are making so much money they've quit there full time jobs. Some of gotten instantly rich off of one application. Plus consider that there are so many of them out there, competition is going to be pretty strong. Make a great app, it will sell well. Make a poor app, don't look to make a profit. Also, if whomever thinks the prices are to low, maybe they should develop other software and get out of doing software for the iPhone. I think a max price target of a 5 star rated app should be $15, anything higher and unless it is really spectacular I don't think anyone would buy it anyways.

horvatic
Fresh-Faced Recruit

Joined: Apr 2002

+9

12/10, 10:30am | report spam | close Reply |
More FUD!!!

The App Store is built to give prominence to 99-cent apps, says Hockenberry.
I find that to be non-sense, there are plenty of apps at $1.99 to $9.99. He obviously hasn't gone through the app store lately. More FUD!!

Guest
Fresh-Faced Recruit

Joined: Nov 1999

+7

12/10, 10:32am | report spam | close Reply |
How is this new?

The best apps will always get exposure, and always be able to charge more. This is true in Mac software, and true for the iPhone apps as well. No doubt there are a ton of free/cheap apps for the Mac, but the good apps still get attention and make money.

In the Canadian App Store currently, only two of the top 10 paid apps are 99 cents, and one of the apps is $9.99. What is the issue?

simdude
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Joined: Jun 2004

+3

12/10, 11:05am | report spam | (1 reply) close Reply |
bogus

A decent application will have no problems selling at 9.99. Many games are charging this and compared with paying $39-$59 for a Nintendo DS or PSP game, that's a steal.

As for the open sourcing all software comment forget it. There are some very good open source projects but the idea that open source is some panacea is ridiculous. I use several open source tools at work, but always with caution. We have been burned by going with projects that lost developers and interest, couldn't get support etc. For every successful open source project out there, there are 100 that fail. That's fine if you want to poke around with stuff when you're in school, but when your time becomes valuable (i.e. a real job where time=money) paying for software works. Why is it people think software engineers should just donate thousands of hours of work for free? If you're a plumber, after a hard days work, do you go around offering to fix peoples plumbing for free? If you want software for free, go learn to program and write it yourself.

As far as IconFactory, you can make money selling your applications, but part of making money on commercial software is pricing for the market. Why does Iconbuilder for the mac cost $79 while IconBuilder for Windows is $49? I will pay for software, but when I see a developer stick it to mac users, I buy from another developer.

ctz
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Joined: Dec 2008

+2

12/10, 11:23am | report spam | close Reply |
People pay if it's worth

I think that we all (or almost all :) ) have some common sense, and we're ok to pay a few bucks if we think the app can bring us something more.
it's true that app store consumers think in terms of service / fun provided by an app, and not in terms of time spent to develop it.

For instance some apps like "ImageTouch 2" probably require a server to stock each user's datas. But no one cares ! We're ok to pay for this kind of app just because it gives us some fun.

danviento
Fresh-Faced Recruit

Joined: Dec 2005

+3

12/10, 12:07pm | report spam | close Reply |
Try Harder.

If you don't think your description of screen shots make your app stand out for the rest as worth more money, then change the way you advertise in the store. If your product is so much better, surely you can find a way to tell people why or show a few comparison screen shots.

h***, you can even have a couple dozen employees or friends "buy" it and leave glowing reviews to help boost your ads. Find ways to make your app top the list in searches.

iTAS may not be the playing field you're used to, but you can still do well in it if you can break out from the crowd.

JulesLt
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Joined: Jul 2005

+3

12/10, 12:22pm | report spam | (1 reply) close Reply |
Free for all

Chelsel - that's a statement of religious belief rather than a truth.

The fact you cite Patent, rather than copyright, protection suggests you don't really have a strong grasp on the area.

Even GPL open sourced code actually relies on copyright law to keep that source open (i.e. there have been cases suing firms who have used GPL'd code in closed applications).

Open source works for some apps, but is not a good model for single player games or any softwhere where the last thing you want to do is pay for a support contract or consultancy to get the thing working.

Guest
Fresh-Faced Recruit

Joined: Nov 1999

+3

12/10, 12:52pm | report spam | close Reply |
Demo mode needed

I think if there is any one thing that's holding back the App Store, it's the lack of a mechanism for demoing software before you purchase it. Without that, it's risky to spend a lot there, even if the app is popular and well reviewed.

For example, I'm in the market for an RPN calculator and there are quite a few out there at this point. The trouble is that people look for very specific features in a calculator, and what fits one person's needs perfectly may not fit mine. I need to be able to try them out.

Without that ability, I can't see myself spending more than a few bucks in case the app falls short in some critical way. If developers want to be able to charge more, Apple needs to implement a demo function.

bob_hearn
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Joined: Feb 2001

0

12/10, 01:36pm | report spam | close Reply |
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bob_hearn
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Joined: Feb 2001

+2

12/10, 01:44pm | report spam | close Reply |
I agree with Hockenberry

I'm also an iPhone developer, and I see the same problems. Yes, there are plenty of examples of non-$0.99 apps doing well, but these are the exception rather than the rule, and there are plenty of great apps that simply get no exposure.

The single biggest, simplest thing Apple could do to address this problem is to start basing the popularity lists -- which are the chief vehicle of exposure -- on revenue of downloads, not simply units downloaded, as presently seems to be the case. It's not fair that a $2.99 app (such as my Subway Shuffle) has to do three times as much business as a $0.99 app to get similar visibility. That creates an artificial pressure to lower the price. Both Apple and the developers suffer as a result. Ultimately the users suffer too.

bob_hearn
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12/10, 01:45pm | report spam | close Reply |
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bob_hearn
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12/10, 01:46pm | report spam | close Reply |
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bob_hearn
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-1

12/10, 04:35pm | report spam | close Reply |
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bob_hearn
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Guest
Fresh-Faced Recruit

Joined: Nov 1999

+1

12/10, 04:58pm | report spam | close Reply |
Take Responsibility!

"[...] and there are plenty of great apps that simply get no exposure."

And welcome to the real world. Guess what? There are plenty of great apps for Macs, for Windows, for WinMo, etc. that simply don't get exposure!

This is why you have a marketing department. To make sure your apps get "great exposure."

So I hear the developers whine, "Apple isn't marketing my app!" Well, guess what? Apple never said they would market your app. It's not Apple's responsibility, it's your responsibility! Apple will list you in the "new apps" for a few weeks--that's the limit of Apple's involvement. Everything after that is entirely up to you, the developer, the person who is--in theory--going to get rich writing this app.

And, yes, that might mean you need to charge more for applications in order to pay for it. Advertising isn't free. If you can get good word-of-mouth, that's a bonus that can save you some money but you can't necessarily count on word-of-mouth. You also might need to "prime the pump," so the speak, to get word of mouth going. That means more expense up-front and, once you get a group of evangelists who'll promote your product, you can spend less and let these others help you.

Look into Ad-hoc distribution for demos. Consider getting a reviewer interested in your software. If your application solves a problem for a particular group, consider websites and magazines that cater to people in that group. Contact those people and see if they're interested in seeing a demo. Perhaps they'll write an article about your software. Heck, as I understand it, you can do 100 Ad-hoc licenses. So you can have a sign-up sheet on your website--if people are interested, they'll give you their contact info and you can send them the appropriate key. Turn off the key after a pre-determined amount of time.

But the whole, "Apple should do more to promote my product" is garbage. It's your job to do that, not Apple's.

dimmer
Mac Enthusiast

Joined: Feb 2006

+1

12/10, 07:29pm | report spam | (1 reply) close Reply |
Hard

It's hard to feel bad for developers: the App Store gives pretty much universal access to your app -- so you don't need to figure out distribution, retail space, etc. Price your app for the value you think it has, and if a competitor does better and/or cheaper rethink your position.

Also, creating a free demo version of your app should be a pretty painless deal.

czesco
Fresh-Faced Recruit

Joined: Dec 2008

+1

12/11, 12:09am | report spam | close Reply |
Good Apps Will Make It

I think apps that are worth it will make their way. I was looking for a Bible app and there are so many choices, many being free, $.99, or $3.99. After looking around and reading reviews I decided to go with BibleXpress, even though it was $29.99. I read all the reviews and weighed the options it had and I took the plunge. It has been awesome and definitely worth the money. It's a gamble due to the inability of demoing an app and other than BibleXpress I haven't bought an app that costs more than $3.99.

I think the issue is that if people need an app with certain features they will spend the money. Most of the apps I've come across are more luxuries than necessities for most people. If I don't NEED something, and only WANT it, I will always spend the lower amount. If there is added value than people will pay for it, provided they need it.

czesco
Fresh-Faced Recruit

Joined: Dec 2008

-1

12/11, 12:10am | report spam | close Reply |
Good Apps Will Make It

I think apps that are worth it will make their way. I was looking for a Bible app and there are so many choices, many being free, $.99, or $3.99. After looking around and reading reviews I decided to go with BibleXpress, even though it was $29.99. I read all the reviews and weighed the options it had and I took the plunge. It has been awesome and definitely worth the money. It's a gamble due to the inability of demoing an app and other than BibleXpress I haven't bought an app that costs more than $3.99.

I think the issue is that if people need an app with certain features they will spend the money. Most of the apps I've come across are more luxuries than necessities for most people. If I don't NEED something, and only WANT it, I will always spend the lower amount. If there is added value than people will pay for it, provided they need it.

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Low App Store pricing squeezing developers?

updated 09:50 am EST, Wed December 10, 2008

App Store pricing squeeze

I Disagree

all will be free soon

Open source = not eating

That's not what I've read

More FUD!!!

How is this new?

bogus

People pay if it's worth

Try Harder.

Free for all

Demo mode needed

deleted

I agree with Hockenberry

deleted

deleted

deleted

deleted

Take Responsibility!

Hard

Good Apps Will Make It

Good Apps Will Make It

Login Here

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10 Most Discussed

MacNN Marketplace

Low App Store pricing squeezing developers?

updated 09:50 am EST, Wed December 10, 2008

App Store pricing squeeze

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I Disagree

all will be free soon

Open source = not eating

That's not what I've read

More FUD!!!

How is this new?

bogus

People pay if it's worth

Try Harder.

Free for all

Demo mode needed

deleted

I agree with Hockenberry

deleted

deleted

deleted

deleted

Take Responsibility!

Hard

Good Apps Will Make It

Good Apps Will Make It

Login Here

10 Most Read

10 Most Discussed

MacNN Marketplace