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The strange economy of the App Store

A few App Store apps have already gotten the public browbeating for tweaking their prices, and here's another: as Johnathan notes, there's a new app on the top of the heap in the paid pile, and apparently the only reason "Units Convertor" (sic) is there is because it used to be free.

We can't necessarily call them out for switching just to sit on top -- what would you do if you had a free app that was being downloaded like crazy and decided you wanted to make some money from it? But being that free apps far outweigh paid apps in terms of distribution, even the #21 free app can quickly jump to the top of the paid pile. We've already posted about how developers might be getting a raw deal out of the App Store (and some publishers have told us personally that they agree), but the economics are very interesting in there right now -- you've got a basically free economy, and considering that most of the apps out now are easy to make, it's just as likely that you'll see a free version of an app that does the same thing as a paid app.

Of course, what's happening in there actually mirrors what's happening out here with software: some of the best applications around are actually being given away for free. We're still in a strange place with the App Store and its pricing, and you have to think that eventually things will settle down and the developers who deserve to get paid will.

A few App Store apps have already gotten the public browbeating for tweaking their prices, and here's another: as Johnathan notes, there's...
 

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U

Well, I want to respond to the comments here as the developer of the software.

1,If you download the app while it was free, any future upgrade is free. Anyone can verify that with their iTune receipe. My friend show me his recipts with both version at $0. Can you found someone downloaded it for free and get charged by update?

2, The reason I releae it free at the beginning and then change it back to paid is simple. Because Apple was process the paid contract. Without that. your app will be stuck in pending. Since the free contract is ready first, I decide to let people use it without paying anything. I mentioned in description "It will be free for couple days"
Everyone can see that and I don't know the day Apple approvel my contract.

3 It took a week to get the contract done and I chaneged it to paid, the update is actually approval after that.

4. For my understanding, there is no way developer can charge people for update within app store, you can see other developer change price, up or down. Did you see any updates has refund or surchange?

Somepeople said I was Bait and switch, I just don't understand how come taking a lost to let eople use my app would have any problem.

5, I think the bigest problem is when I cahnge to paid softwrae, Apple ranking sysmten bug make mine app list on the top. But who knows it before it happened?

People complain there is not trail period for paid software.
and then complain people who give it free at the beginning.
Can anyone tell me what happened there?

August 01 2008 at 3:58 PM Report abuse rate up rate down Reply
EL

I think it's ridiculous that Apple does not implement their own apps which are already available. ie. all their widgets!!!! They're so good and yet they can't port any of them except for Calculator?! Come on!

But it's obvious what's missing. TRIAL VERSIONS!

August 01 2008 at 3:04 PM Report abuse rate up rate down Reply
Bertil Holmberg

I do not agree with your sweeping comment "considering that most of the apps out now are easy to make," not unless you consider the current crop useless trash, which I think is mostly untrue. Making a good iPhone app takes a good deal of work if you want it to function well, and adhere to Apple's guidelines. The iPhone is small but that does not mean that it is simple. It runs a version of Mac OS X but that does not mean that you can use just any Mac code experience, iPhone OS is quite different. Add the fact that Apple keep changing things, the OS is still buggy, the documentation is incomplete, and that developers still must work in secrecy. All this adds up to considerable work even for a small app with just a few screens of functionality.

August 01 2008 at 12:29 PM Report abuse rate up rate down Reply
Jash Sayani

Apple is just coping what the Jailbreakers do !
Steve loved Installer and made AppStore - the buggier Installer. And Apple cant even update it regularly!
They take ages to test an app before putting it on AppStore, and seriously what do they test ??????

They put an app like NetShare after testing it for ages!! and then take it off !!!

I am pissed off Steve !!!!!!

August 01 2008 at 6:28 AM Report abuse rate up rate down Reply
Kofi

Well said Dan. However, while LuminousNerd may be correct on a lot of things, I disagree with the SuperMonkeyButt comment. But you all have valid comments concerning that 'free - pay' thing in the AppStore. And I totally agree with autoy for that observation on Labyrinth.

August 01 2008 at 1:20 AM Report abuse rate up rate down Reply
Al

I have yet to find a way to view new apps on the phone. Does anyone know how to do this? Right now I see Nearby listed number 1 in featured -new, but I see "Judo" on iTunes if sorted by release date. So whenever I need to see what came out today I have to go to itunes to do it?

July 31 2008 at 10:55 PM Report abuse rate up rate down Reply
umijin

The problem I have with the app store is how Apple presents them. The "New" apps section actually doesn't have the newest apps, for example. When click on See All link in the section Casino/Card Games, I get a very small subset of actual card games. (see my blog for an article).

So, Apple is misrepresenting the available apps, making all of their splash page lists essentially paid 'featured lists', unless something has changed in the last week.

July 31 2008 at 10:12 PM Report abuse rate up rate down Reply
autoy

Some apps like the excellent labyrinth have a trial, separate app you can play with some limited amount of levels for free. Then you can actually pay for the full version if you like it. This is the way all free->pay apps should be, changing the price of an app annoys everyone.

July 31 2008 at 9:33 PM Report abuse rate up rate down Reply
David Chartier

I think this is an extremely difficult concept to pigeonhole into the difference between "free" and "paid" apps though.

The example you use Michael—Firefox—can be given away for free because Mozilla rakes in *tons* of cash via affiliate ads that users click on when doing searches from the built-in toolbar. That works out great for both Mozilla and Firefox users because an alternative form of revenue is highly successful. That alternative form of revenue is also at least one reason why Mozilla can afford to pay so many employees who work on Firefox to make it so successful. You don't get something that great for nothing.

But not all applications have an alternative revenue method like that available. Some developers want to develop software for a living, others don't. In most cases, the paid software is *generally* better because it usually offers a broader set of features that are more polished with a more successful UI. In rare cases, free/open source apps reverse this equation and trump their paid brethren.

I hope you're right though. I hope that the relatively lower commercial bar of the App Store helps consumers to see past the "ZOMG it's free!" shine and realize that good software takes hard work, and developers deserve to get paid for that work—if they want to be, of course.

July 31 2008 at 9:26 PM Report abuse rate up rate down Reply
uhuznaa

One thing that's really missing is a trial period for paid apps. Give me an hour (or a bit more for complex apps) so that I can actually *use* them before buying. Just give me a period of time I can try the app and if I delete it in this period, don't bill me.

$0.99 or such seems to be almost nothing but if I feel ripped off (since the app is crap) I will very much hesitate with the next app I'm about to buy. When I buy a coffee and get a pot of cold water instead I will not say "hey, it did cost nearly nothing after all!"

July 31 2008 at 7:08 PM Report abuse rate up rate down Reply
1 reply to uhuznaa's comment
Max

I agree. most palm apps had trial versions. How are you to know if an app or game is any good, or even if it works?

Also, another thing that was better on the Palm is that you can buy apps anywhere, right from the publishers' web sites, where you can usually do more research. You could also beam or copy demo versions of your games to friends.

Not to mention you could easily just copy your own apps right to the device.

The store is handy, to be sure, but it can't be the ONLY way to get apps. Imagine if the only place to get music was the iTunes store -- no CD stores.

July 31 2008 at 9:25 PM Report abuse rate up rate down Reply
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