Filed under: Analysis / Opinion, Gaming, Software, Odds and ends, iPhone, App Store, iPod touch
What's wrong with buying apps for 99 cents?
Dan Moren over at Macworld has picked up the App Store pricing gauntlet yet again. He somehow equates the iPhone's price dropping to $199 as a symbol that cheap people are shopping the App Store -- as if anyone who's interested in spending $199 on a phone can be called cheap. But he's starting from the right place: from AppCubby's donationware scheme (they sell apps for 99 cents and ask people to donate more on their site) to the Sound Grenade developer (he made a self-described "terrible" app in 20 minutes and threw it up on the App Store -- only to get hundreds of thousands of downloads), something is very weird in the world of apps for the iPhone and iPod touch.Moren's final point seems to be that an excess of 99 cent apps is pushing the really talented developers out of business (because they can't make back what they put into the software by selling it for 99 cents), but there's still something wrong there. If someone can sell 100,000 copies of an app for a buck apiece (walking away with $70,000 after Apple's cut), why are the talented developers leaving? Surely you can make a quality app for less than $70,000, right?
We're obviously still closer to the beginning of how the App Store will eventually shape up rather than the end. It sure seems like developers who create worthwhile apps would find a way to pay for them, but if they can't, then yes, it might be worth another look at the pricing setup from Apple end.
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Reader Comments (Page 1 of 4)
MadMike said 12:10PM on 1-26-2009
Simple: Greed. Quality single-person developers _CAN_ make a quality app and live off the $70,000.00 made on that app.
Medium & Large businesses can not develop a quality app that only nets $70,000.00
A business would PAY a decent developer at least $70,000 a year + benefits. That Asset costs them about $100,000 a year to employ. If said person only develops 2 apps a year, both at $0.99. Said company walks away with only $40,000 in revenue after paying the developer. If it takes more than 1 developer to make said app, they will LOSE money.
A business that pays less than $70,000 for a developer should be put out of business anyway.
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Kai Cherry said 1:43PM on 1-26-2009
Thank You :)
thephonelounge.com said 12:38PM on 2-20-2009
My quibble with your comment is that a full time developer (being paid at $70K a year) will be able to crank out a hell of a lot more than two applications, and why would those Apps have to sell at $.99 anyway? If you go for less sales, more expensive, but target a specific niche, then you'll be able to make much more with your Application.
waffletower said 12:18PM on 1-26-2009
There is a certain naivete in this idea. It is important to remember that there are tens of thousands of applications on the App Store now and the store's virtual equivalent of shelf space is limited to 100 applications per search category. And an application that is in the 50-100 section get far less exposure than being in the first half. It doesn't take much thought to realize that many great apps are simply off the radar -- effectively unknown -- selling no where near this arbitrary 100,000 mark. Some once great apps, that sold fantastically well last summer, have vanished from the "shelf" as well; they are unknown to many new iPhone owners. While there are notable exceptions (Koi Pond and Pocket Guitar being obvious examples), most popular applications have a very brief resonance period (3 months) on the App Store.
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Appman said 8:58PM on 1-29-2009
That I what we will try to sort out and solve on a new show that hopefully starts this weekend. Check out http://theappguys.com
Justin D said 12:20PM on 1-26-2009
Not sure why anyone is surprised. The iPhone is now officially a mass-market product. The same people that have spent years and years buying Gwen Stefani ringtones, voice-ringtones featuring Anthony Anderson yelling at them, Ferrari and supermodel wallpapers/screensavers, for less than $2/pop, are now let loose on the app store.
Frankly, the mass market is low class. While the buyer of the original iPhone may have been the type of person that downloaded Opera Mini onto their featurephone, the iPhone is now affordable enough to be in the hands of folks that downloaded "diamond fronts that say Big Papa" wallpapers.
The 14-to-24 market loves shovelware. Just ask to borrow one of their phones, and see what's on it. They see things like Sound Grenade and iFart, and don't care how well made they are, just that they do something amusing. I've got a few cousins, female, under 18, very tech savvy, but they've got nothing but low-cost, low-grade content on their devices. They're not the market for a $5 to-do list - they're the market for the $0.99 farting app.
There will always be more buyers of these types of apps, versus Things for iPhone, Wikipanion, Twitterrific, etc. Just the way it goes. (In fact, social psychologists would be a better group of people to "investigate" this whole low-cost/low-quality commerce thing than businesspeople or developers.)
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Schell said 12:42PM on 1-26-2009
You know, I was going to disagree, but then I realized that Paul Blartt, Mall Cop is still #1 at the box office - second week in a row. If that isn't telling, I don't know what is.
Kai Cherry said 1:44PM on 1-26-2009
Thank you. Seriously, thanks!
YodaMac said 2:20PM on 1-26-2009
Uh... you can keep your Twitters and your Wikis and all your other self-important blogging, narcissistic, so-called "socializing" applications. That's not what I'd rather see more of these days, on the web or the iPhone App Store.
m said 3:31PM on 1-26-2009
this kind of elitism is exactly what gives mac users a bad name. i'm assuming you're a democrat? the same public gave us Obama. try to remember that.
Ken Shiu said 8:30AM on 1-27-2009
Unfortunately, I'm in the 14-24 market.
I personally hate farting apps and whatnot but I do know many people that find these types of applications funny.
Honestly though, I don't think it was because of us.
Before Apple allowed iFart Mobile into the appstore, there was alot less shovelware and the top few applications were actually useful.
Granted, most of them were games, but they were well made high quality games like Super Monkey Ball and Critter Crunch.
Now most of the games are like "Mafia Live!"
chris said 12:37PM on 1-26-2009
Why can't the "really talented" developers just create apps for .99 instead?
To complain about how people are buying cheap apps is like a Rolls Royce engineer complaining that the masses are more interested in the cheaper cars.
People buy what they want...and won't be forced into buying something more expensive. They'll just take their money elsewhere.
If 100,000 downloads is the goal, then the best course for a developer is to identify what such a large number of people want, and what price they're willing to pay....Then create it.
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Kai Cherry said 1:44PM on 1-26-2009
No cookie for YOU!
I'll explain why:
Because of Apple, my man...because of Apple.
You see, to create an app that takes advantage of the Good Stuff requires time, effort, talent and *assets*...and none of these things are cheap.
While a talented dev might be able to code...they may not be able to say...draw or...do sound design...or compose music.
In the Really-for-Real world, they would have to PAY someone to do this.
"But," you say, "they would have to do this anyway!"
This is true. What matters tho, is that a really talented developer on other platforms or other markets could very likely sell what they make...or at least have a chance to. With this platform, you don't even have the option to reach customers unless what you develop is greenlit by someone else...after you bother.
Why bother?
The market is VERY clear about this and besides, Apple is raking in the dough...doesn't matter if anyone else can/does/could/will.
Neil Wainwright said 12:49PM on 1-26-2009
The App Store should highlight all kinds of apps. Right now it's focus is low to zero cost apps and that means apps that take more time to develop and support won't get done, or at least won't flourish as much in the long term. However, this is all a point in time. It'll settle down. Apple will provide better navigation models, we might get "trial" capabilities and the overall market will sort itself out. We do expense management solutions (both personal and corporate) and we don't play in the 99 cents market because we have a supported web back-end as well. That's OK...I hope the apps succeed at both ends of the spectrum.
...Neil (nexonia@nexonia.com), CEO
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THJ said 3:24PM on 1-26-2009
And some of us find our apps in TUAW comments - That time/expense app looks really, really nice (if only we hadn't purchased Autotask 3 months ago....).
Neil said 12:49PM on 1-26-2009
Yet another Americentric article. While there's no doubting that the American mobile phone market is extremely primitive, that doesn't mean those in other countries are the same.
In Europe, "cheap people" tend to buy low cost, pay as you go handsets and would never ever go near iPhone, which is extremely expensive.
The main driver behind App Store sales has to be iPod touch.
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Greenscreen said 1:36PM on 1-26-2009
interesting....
I would love to see the breakout for top apps (paid and free) downloaded to iPhone vs. iPod touch. I don't think I know anyone personally over 25 who owns a touch and I can't think of anyone I know personally that owns an iPhone that is under 25. (obviously not a blanket statement) And look at the latest sales results... i Pod touch crushed iPhone - and that median age is a lot younger.
If there was some way to look at apps downloaded to iPhone vs. iPod touch, I think you'd see more high-end apps on the iPhone list and more fart apps on the touch list
Kai Cherry said 1:56PM on 1-26-2009
Neil,
Yep :) The iPod touch is driving store sales...and guess how the vast majority of iPod touch owners are? :)
-K
JD said 1:29PM on 1-26-2009
The problem with this logic is that there would then be no niche apps. Almost all of us have specialty interests where we would appreciate having an app serve that interest, but to develop an app for a low-sales, high-interest market requires setting a higher per-item price. The medical apps are one obvious instance of this, but that's only obvious because demand is sufficiently high that they exist despite the hindrances. For many other small markets, we might not even know what could be done because the App Store makes it very difficult to market non mass-market apps. No developer would mind charging a dollar for an app that sells in the tens of thousands, but restricting the market to only such apps deprives everyone who might like something targeted to their special interests. And if you look on something like VersionTracker, you'll see that probably the large majority of applications out there are actually aimed at speciality markets -- a whole world of apps that the App Store definitely hinders.
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Stephen Lang said 1:37PM on 1-26-2009
What is there to re-visit about Apple's pricing? Make it even more restrictive, no apps under $5? That will simply kill demand.
The problem is marketing, not distribution. The Apple Store is a great start for developers and customers, but if you're selling a $10 app then you'll probably need more than App Store to market your app.
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