App Store Trends: Prices race to the bottom

Well, poop. I guess this is Erica's last TUAW post. Thanks for all the hard work; you will be missed!

You all...do realize that all kinds of developers read blogs just like this one, right?

Perhaps you don't realize. here is something more to think about: it is MUCH more difficult to write ANY sort of app outside of the ones people CONSTANTLY complain about (and believe me, even the most...simple of things require much more hoop-jumpery on iPhone OS than they do on Mac OS X...) and due to this and other market conditions, much more costly in more than a couple of cases.

The consumers are sending a message to Mac devs: stick with the Mac.

To traditional mobile dev houses, they are also sending a message:

Don't spend too much on ports...this market doesn't want to pay.

The lure of "volume" sales is an attractive one, but it isn't really the model most Mac/Cocoa devs I know use to determine what it is they are going to do.

Hell, there was a recent case where a *very* respected coder had to walk away from one of these companies BECAUSE of these conditions; they wanted to start a "churn farm" and you know, some people don't want to slap some BS together for a "quick buck".

Given all of the other...complexities invovled, I think people need to be a bit more...respectful of the actual *work* involved in creating this software by those that do it everyday, because the ones I know are mostly doing it for the love and the platform...and you know, when "their guys" seem to be rooting against them, it makes other platforms look that much more interesting for those that gotta eat off that 70¢.

Something to think about, you know?

I hope this trend will pave the way for applications with more features, more development investment, and higher prices. Most of the apps on the store are just plain dumb...

I don't have a problem buying apps or downloading free ones but the free ones are generally very simple or games.

When I don't pay for something and it breaks, is crappy or has no support then I got what I paid for. So if I don't like a free app I delete it and move on I don't even bother reviewing it.

I have the free versions of Twitterific and the New York Times reader. They each have embedded adds that are currently not too bothersome but I really like the NYTimes reader that has one add bar on the bottom where Twitterific embeds adds in the tweets.


I do think apple needs a simple way to get refunds as quickly as you purchase.

Under NO conditions will I EVER allow ad-supported apps onto my iPhone (or, for that matter, my Mac). NEVER.

If a developer wants to offer that as an option, i.e., an ad-supported alternative version of their app, that would be fine--just so long as they ALSO maintain a standard, ad-free version that I pay for.

@Mike comment #24...

but that's like buying a Mercedes and complaining about the cost of tires, oil change etc.

you're getting a higher grade product...therefore items associated with it are typically higher grade, more advanced, more expensive.

Unless it's Pacman, $10 for Pacman!!!
I already bought it for the nano last year for $5.

The only way I'm buying it for $10 is that they:
1- Bundle it with Ms.Pacman
2- Or upgrade to the XBLA Pacman CE

The funny thing is about people complaining about price, is that they paid $200+ for the phone and $70/month for service, but $9.99 is way out of their budget.

I think the major problem is that the iPhone 3G introduced people who are upgrading from feature phones to a smartphone, who are not educated in the notion that a lot goes into developing, testing, marketing an application compared to what they might be used to downloading.... a ringtone, or a flashy wallpaper.

I am glad to see that Apple finally requires you to download/purchase before writing a review. As a developer though ,I hope this downward pricing trend either begins to slow, or only stays on the iPhone platform. People are expecting more out of mobile applications...so it's not getting any easier to develop these apps, so there should not be a reason for pricing to drop.

And i'm just not a fan of placing ads in my application... i feel the customer bought the application therefore it's theirs. It usually looks tacky and stands out.

With respect to ad-based apps, I wonder if Apple will clamp down on them or demand a cut (since it is not making its 30% share of the ad revenue, I assume). So can a developer make more with a free app that contains ads, since the developer is receiving 100% of the ad revenue instead of 70% of the revenues from the app?

By the way, Happy Birthday, Josh!

I think that it's possible to make more than double of your sales if you cut your price in half. It depends on the app and the circumstances. In case of the iPhone, you cannot transfer (sell) the app to somebody else if you get bored of it. Therefore, those people who usually buy used apps/games from early buyers cannot do so. They have to wait for the price to drop. If another app that is cheaper or a new fun app/game comes along before the developer drops the price of the app, he/she could lose out on those people who would purchase immediately at a lower price. Since developers are exposed to millions of potential users/purchasers, it is in their best interest not to charge "higher" prices. You have to play around with the pricing to see at which price you can maximize your revenue stream. That is really easy to do in the App Store - if you were dealing with an app sold in stores, it would be nearly impossible! Another issue is hacking - if it is perceived that your app is too expensive, it may be hacked - and therefore all of your revenues will be lost as a result. Use me as an example - I didn't purchase your app at $9.99 because I may only use it a few times, but I purchased it at $4.99. In the case of the App Store, I am pretty sure that you can make more by charging less. Look at the large companies that are dropping their prices - they know that demand is highly elastic, and they are cutting pricing down to $4.99 from $9.99. Josh, try to keep your app at a lower price for a few days, but make sure that it's announced on various sites - TUAW, TouchArcade, FingerGaming - just let the admins of those sites know - and let us know the results.

In the meantime, enjoy your birthday and celebrate the fact that Apple didn't reject your app and that you are making some money from your effort.

Thank you to all of the developers!

What is being missed here is that the 99c price is a sweet spot. Except for the Adams of the world, of course. it seems almost free, and is the price of most music. An app could easily make a fortune at the price - sell a few hundred thousand and you are done.