Filed under: Analysis / Opinion, Gaming, iTunes, Developer, iPhone, App Store, iPod touch
Stats: 99 cent apps aren't selling any better
You could argue that Apple's 0 to 1 popularity scale doesn't tell us much (we're not looking at actual sales here, just a number Apple has given to each app in terms of downloads), but Mobile Orchard's conclusion makes sense, in a strange way: free apps, we know, are much more popular than any paid apps, and if people are willing to pay 99 cents, why wouldn't they be willing to pay more? Why should a 99 cent app sell better than an app of equal usability that costs $1.99? It shouldn't, and according to this data, it doesn't.
Very interesting. There is an exception -- in the Entertainment category, 99 cent apps do sell markedly better than the apps above them (Games, also, as you can see above, seem a little stronger in the 99 cent bar). But in the Business and Productivity categories, higher-priced apps actually sell better than their cheaper counterparts. People will pay what your app is worth, whether that's $1, $10, or even higher. The problem may be getting people to understand the app's worth in the first place (and that's where something like an App Store trial system might work), but Mobile Orchard's data says that price isn't a factor in an app's sales.
Thanks, Dan!
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Reader Comments (Page 1 of 2)
freshyill said 9:05AM on 12-12-2008
To me, this says that 99¢ sell about as well as all paid apps, *combined*. That seems significant to me.
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ajprice said 9:33AM on 12-12-2008
Agreed. Lets see a graph of Free/99c/$5/$10 and then see who pays what!
Gman said 9:58AM on 12-12-2008
Exactly, this graph is super misleading. I really don't know how they draw such conclusions without even splitting out apps that cost more than $1. For example if the majority of sales in the upper bracket fell close to the $1 price tag then their conclusions are completely bogus. Who paid for this?
Fred said 10:19AM on 12-12-2008
They say they have some more graphs breaking down the various price points, which will be used in a future post, so you can all just calm down a little bit.
Le Big Mac said 9:27AM on 12-12-2008
All this means is that people are willing to pay more if there is value in the app. For any given app, this says nothing. Overall it says that developers are pricing their apps appropritely to the market--99c apps sell for that price because people are willing to pay it. Apps for more than 99c are selling at that price because people are willing to pay more.
It does not say anything about whether dropping the price on a particular app would be more profitable. Undoubtedly sales would increase, but this does not say they would increase enough to make up the difference in revenue.
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Aron Trimble said 9:44AM on 12-12-2008
Great post Mike!
I think this really emphasizes two things:
1) Some sort of demo or trial system needs to be put in place. If movie rentals can be set to expire why can't applications?
2) The burden of marketing an application does not fall on Apple. Success does not happen automatically after the app is approved.
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lolec said 9:51AM on 12-12-2008
Shure, they sale the same number of apps, but the profit is what developers complaint about, they can be selling a lot more of >1 dollar apps if the market wasn't full of crapps I don't know how apple will fix this, setting a minimum of 2 dollar apps? or maybe they can disapprove the price if its a limited functionality app, some sites already do that so, for you to be a paid app... i don't know, i hope they find a better solution
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PSM said 9:56AM on 12-12-2008
I'll pay more for an app I know I want, but I take more chances on unknown apps when they are 99 cents. Without trial versions of most apps, this is pretty significant. I won't take a chance above 99 cents.
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Dave said 1:44PM on 12-12-2008
Exactly.
Either Apple needs to implement some type of trial system or, better yet, developers need to released limited, trial, versions of their software.
I'm all for giving people money when there's value, but it's a risk when I am paying $25 for a utility and have no way of knowing if it will suit my needs.
InfoMofo said 10:58AM on 12-12-2008
What I read from this is that the barrier for buying apps is just the irritation of having to enter your name and password. The actual cost of the app is largely irrelevant.
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MadMike said 10:23AM on 12-12-2008
I don't buy any apps. If it isn't free, I don't use it. I don't see the point in purchasing something that I can only use on my Apple iPhone or iPod Touch.
The only App I would consider spending up to $10 on, would be one that can record all my phone calls without that pesky "This call is being recorded" message.
Yeah, yeah, I know privacy rules. In PA, only 1 party needs to know and I will mostly only use it when I call a customer service line and they record you also.
But, that's it. The same thing with ringtones - Free or I live without it.
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russ_schroeder said 1:49PM on 12-12-2008
Yeah, can't imagine paying for software that I can ONLY use on my computer...
So you think you should be entitled to everything for free? Unless of course is helps you feed your paranoia that Big Brother is watching. Yeah, that makes sense.
And let me guess, no one ever told you that the X-Files aren't actually real...
MadMike said 3:03PM on 12-12-2008
Uhm, It's my choice if I want to pay for something or not! If there is a free alternative, its my OWN choice to use it. If I don't NEED something, then I'm not going to F-ing buy it!
It's a free country, I can do whatever I want. If I don 't want to spend $0.99 on a stupid video game, THEN I HAVE THE F-ING RIGHT NOT TO PURCHASE IT.
Maybe I have other priorities in my life. Useless applications on a phone, isn't high on my list.
So, if the app is free, then I have the right to use it for free.
There are lots of apps that are free that I STILL DON'T USE.
Moron.
anaknipedro said 10:41AM on 12-12-2008
This is a cross-sectional analysis. It is meaningless because it does not look at what happens to apps when their price goes down. When developers price their apps at >$1 they anticipate that their app offers greater value that those prices at $0.99. My feeling is that most of the apps in the app store should be free because they don't offer much value. The ones that cost money offer more value and are worth the price.
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BriteMac said 11:07AM on 12-12-2008
I can tell you what influences App sales more than the price--it is the position on the store. If you are not seen in either the top 25, what's new or what is hot you will suffer. I'd love to see graphs related to that.
Further since both the iTunes client on the phone and on the desktop insists on listing products by popularity of download by default people will not be willing to do page through pages of apps to find something new and wonderful. I have been promoting the idea of an end-cap where all products with a certain start rating (3?) get cycled in / out of the end-cap. This way everything gets a chance to be seen. That is what is killing us in my view. The AppStore's design prompts developers to make quick/dirty apps and not update old ones.
So the cycle is more like this--you're new--you are hot for a while until something else new comes along. A tip of the hat from a review site that has a lot of traffic will bring you back to the top of a category but only for a while. Further the AppStore is far from bug free. Jetset was at the top of the business category until JetSet disappeared from the iPhone AppStore (but still showing up on the desktop client) for a month. It took Apple a month to resolve the issue. The rankings sank and I haven't recovered. Perhaps with a tip of the hat with 1.2 of Jetset that is coming out soon?
The issue is not the pricing in my opinion but the position and how Apple promotes Apps on the store. People only look to the popular and forget the rest.
I think Apple is really trying to get things to work right and satisfy the customers and the developers. I think they have a hard road ahead of them--still they have the best store out there on the best platform out there. Hard for me to be to critical!
-BriteMac / Maker of JetSet Expeenses
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Josh said 11:58AM on 12-12-2008
Interesting post. But I think it still backs up the argument of the developers since they, according to this, wouldn't loose sales with pricier apps and would have a greater profit margin for improving.
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iphonedev said 11:35AM on 12-12-2008
@2 :Agreed. Lets see a graph of Free/99c/$5/$10 and then see who pays what!
Yes, i think this is the right categorization of paid apps. May be the minimum paid app should be priced $2, because paying $1 is more of a hassle than expense.
There are many "tourist" devs who are creating imbalance by setting arbitrary prices for a lot of junk. But once they are gone, the serious devs should focus on quality and set reasonable prices. I don't mind paying $5 for something useful because that is a tenth of the monthly phone bill.
Devs should focus on what Apple does best : improve the quality of the apps, keep the prices same.
Read more at http://iphonedev.in
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brian said 11:43AM on 12-12-2008
The solution is obvious: Apple needs to allow $0.49 and $1.49 apps.
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crazylegsmurphy said 6:30PM on 12-12-2008
Wow, I can already see the slippery slope the Apps Store is heading down. I just got done paying for an iPhone on a 3 year contract and honestly the last thing I feel like doing is spending $10+ on an App.
What strikes me as totally odd is that if you're a developer (lets be honest that most of these App developers are just doing this in their free time for fun, or to make a few extra bucks), you would be complaining about not being able to sell an App for more than $0.99.
Think about, there are a LOT of iPhone users out there, and if you happen to build an App that gets a million downloads....well, I can guarantee you that it's covered your expenses in building it.
Regardless, I'm already pretty fed up with the Apps store. It's like a free-for-all for pricing. One day an App will be $1.99, the next, $5.99. There is no money back guarantee or customer price protection. There are more and more free Apps with banner Ads, and splash screens.
The Apps store is starting to go the way of all outdated internet business practice. Instead of offering an App for a reasonable cost (consistently), and making your millions on large volumes, they're trying to find a way to squeeze even more cash out of customers already paying "Apple Tax".
For me, I'll stick to free or $1. I simply can't justify any more than that and I'm not about to start paying off the shelf software prices for an iPhone App.
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jbelkin said 4:21PM on 12-13-2008
Well, speaking just for myself - $.99 is a psychological price barrier where it's a easy decision to make - if the review seems decent, then I'm willing to take a shot - if it's dumb like iChalky, oh well, no biggie but at $1.99 even though it's only a buck more is a bigger psychological barrier - like why buy the bigger cup size where there are free refills? ... but if it's something I really want like centipede, $4.99 was nothing ... but that is also smart pricing, at $9.99, I would've thought - do I really want to pay $10 bucks for 30 year old technology (though technically there are a few newer versions - BTW, Centipede is great - the touchscreen bubble button works as well as the trackball!) ... same with business apps ... I would have no problem paying $9.99 or more for a decent list app but of course, want a $.99 demo version first.
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