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View Full Version : iPhone Developers - What do you plan to charge?




Buschmaster
Apr 7, 2008, 11:23 AM
Assuming you've got some applications at least thought out, what do you plan on charging for the applications you're developing.

I'll add a poll so people can be more secretive about what they plan on charging. ;)



psingh01
Apr 7, 2008, 02:56 PM
$999/yr subscription. Support includes one answered email per month :D

Santa Rosa
Apr 7, 2008, 02:58 PM
Well according to Steve developers are mainly going to be giving them away for free, so its going to be interesting to see how it turns out.

robbieduncan
Apr 7, 2008, 03:02 PM
If I had the time to do it I'd be charging around $5. I figure that there are at least 10 million devices out there to target (that's almost certainly on the very low side). If you can sell to 1 in 10 people then that's $5 million gross. Apple get their 30%, but the developer still gets over $3 million pre-tax!

Sbrocket
Apr 7, 2008, 04:18 PM
If I had the time to do it I'd be charging around $5. I figure that there are at least 10 million devices out there to target (that's almost certainly on the very low side). If you can sell to 1 in 10 people then that's $5 million gross. Apple get their 30%, but the developer still gets over $3 million pre-tax!

Heh, I think 1 in 10 is a bit optimistic, no? :p

I'm balancing the decision to offer my app for free or for a minimal fee ($1-$5) just to recoup some of the time spent developing it. What I'll probably do is release two versions, one for free and one with advanced stuff for like $2.99 or something. I dunno. If people will buy it, I will sell it. :D

robbieduncan
Apr 7, 2008, 04:23 PM
Heh, I think 1 in 10 is a bit optimistic, no? :P

Depends on the app. But I also think the 10 million devices is massively un-optimistic. Apple should have sold at least 3-4 million iPhones by now. I'd imagine they have shifted at least 10-15 million iPod Touches. So we're now at closer to 1 in 20 (especially by the time the store is actually live).

Sbrocket
Apr 7, 2008, 04:27 PM
Well yeah, the device estimates you quoted sound about right, I'm just thinking 1 in 10 or even 1 in 20 adoption rates are kinda overly optimistic. I mean, you have to factor in those people that actually use the AppStore out of the number of total devices, how many potential customers you target, how much competition you have for your specific solution, etc etc. Sorry, I'm too much of a realistic/pessimist. :D

Santa Rosa
Apr 7, 2008, 04:29 PM
Heh, I think 1 in 10 is a bit optimistic, no? :p

I'm balancing the decision to offer my app for free or for a minimal fee ($1-$5) just to recoup some of the time spent developing it. What I'll probably do is release two versions, one for free and one with advanced stuff for like $2.99 or something. I dunno. If people will buy it, I will sell it. :D

I feel if you offer the App at to high a cost you will probably make less money than offering it at a lower price as more people will be likely to buy. Thats my feeling on the whole situation anyway. Cant wait to install my first native application!!!

robbieduncan
Apr 7, 2008, 04:30 PM
Well yeah, the device estimates you quoted sound about right, I'm just thinking 1 in 10 or even 1 in 20 adoption rates are kinda overly optimistic. I mean, you have to factor in those people that actually use the AppStore out of the number of total devices, how many potential customers you target, how much competition you have for your specific solution, etc etc. Sorry, I'm too much of a realistic/pessimist. :D

All true. But for $5 as a consumer I'd not be expecting too much. Definitely the sort of app a single developer could do in a few months. Even hitting 1 in 100 and making >$300k sounds pretty impressive. And as Apple ramp the platform over the next couple of years that's likely to grow.

I'd be really surprised if Apple don't manage to sell a total of at least 50 million iPhone/iPod Touch devices by this time next year...

Sbrocket
Apr 7, 2008, 04:32 PM
I feel if you offer the App at to high a cost you will probably make less money than offering it at a lower price as more people will be likely to buy. Thats my feeling on the whole situation anyway. Cant wait to install my first native application!!!

Well obviously, that's why I though a $3 would be a good target since its near that impulse buy range where people will just buy it without worrying about the costs. The sweet spot is to stay in that impulse buy range while still getting the price as high as you can, make your app's page enticing enough, and maybe pull them in with a Basic/Pro app structure.

And robbieduncan, that's all true too. The project I'm working on right now is just myself, and its really nothing spectacular in and of itself, but I think it has a buy wide potential user base with some advantages over other competing apps. I mean, there's probably gonna be tons of Converter-type apps on the store at launch, but that's really all I can handle as a full-time student and single developer. I've never marketed or sold apps before, so I have no basis to gauge if people would expect such as thing to be free or if they would accept a minimal price, so it'll be interesting to say the least. I do think my TI-89 style unit calculator is something most other apps won't have, but if nothing comes out of it then it was at least what it was initially meant to be - a project to learn Cocoa.

/tangent

psingh01
Apr 7, 2008, 04:38 PM
More seriously....


10M iPhone owners
50k decide to buy your app (only 0.5%)
$3.00 ea = $150k
That's $105k after Apple
Maybe $70k after Uncle Sam

Sbrocket
Apr 7, 2008, 04:40 PM
Yeah, the numbers look good any way you slice it for minimally-priced apps especially since I'm sure a lot of stuff is going to be coming from individual developers.

Not to mention...Apple's profits off of this are gonna be pretty hefty even after operation costs and such. Take that money from sales and invest it in stock once it gets to a nice bargain price from this developing "recession", eh?

cruzrojas
Apr 7, 2008, 05:59 PM
I like the poll results. If you add the percentages together they add up over a 100%

Probably because of the multiple choice option, but the percentage should be over the number of votes not over the number of people who have voted. oh well.

Buschmaster
Apr 8, 2008, 02:24 AM
Anywhere from $1-$6 seems to be the sweet spot.

Hopefully many users are willing to pay a couple bucks for these very useful apps. I will be!:)

Saliwa
Apr 8, 2008, 03:56 AM
Wow that's cheap, but you're right the volume can be insane.

kainjow
Apr 8, 2008, 08:03 AM
From experience, a low price isn't always a good thing. Once you set a low price, it's really hard to increase it and customers will get angry. However if you start off higher, people will think your app might be more valued compared to a low price, and you can always lower it, making your customers happy.

Buschmaster
Apr 8, 2008, 09:48 AM
Wow that's cheap, but you're right the volume can be insane.
It depends. Sure $1 to $6 is very cheap for a computer program. But if many people release their apps for free (Which as a developer I'm not so sure I hope for ;)) then it will be harder to sell apps at any price...

From experience, a low price isn't always a good thing. Once you set a low price, it's really hard to increase it and customers will get angry. However if you start off higher, people will think your app might be more valued compared to a low price, and you can always lower it, making your customers happy.
True, yes. But my philosophy will likely be get the app in as many pockets as I can, word of mouth will spread quickly that way, I hope. There are advantages to pricing your app either way.

We know that there were 4 million iPhone's sold as of January, correct? Nothing since then, but since that was about half a year and it's about half a year between that announcement and the SDK release we can figure there will be AT LEAST 6 million iPhone's by the end of June. I think the number will be closer to the 10 million, myself. With more markets and the price drop I bet they're selling even more rapidly than before.

As far as the iPod Touch, well, I don't think we've even seen sales figures on it. But it has to be even more sold than the iPhone. Just judging by what I've seen I've seen more iPod Touch owners than iPhone owners. I would estimate about 10 million again playing it conservatively. So if we take those numbers we have 16 million possible buyers.

I'll make a spreadsheet that will calculate your possible sales totals a few different ways.

Buschmaster
Apr 8, 2008, 10:03 AM
Can't upload XLS. But it's easy to make on for yourself, so I won't even bother sticking it anywhere ;)

robbieduncan
Apr 8, 2008, 10:12 AM
Can't upload XLS. But it's easy to make on for yourself, so I won't even bother sticking it anywhere ;)

If you really want to upload it the just zip it first...

CyberGeek
Apr 8, 2008, 11:09 AM
Wow, I was worried about my sale volume estimate being overly optimistic, but I have the most pessimistic estimate here. I figured one in ten iPhone/iPod touch owners would see any given app in the store (a number of people won't ever use the store, and most won't check the store on a regular basis), and then out of that one in ten, one percent actually go on to buy the app (which is typical in the shareware industry (yes, I know this isn't the shareware industry, but the number seemed fair)), which results in selling the app to 0.1% of the iPhone/iPod touch market.

Going off of that estimate, a typical app would probably sell to 16,000 people given the 16,000,000 device estimate. At $4.99 a copy (which is what I'm planning to sell a game at), that results in $55,888 after Apple takes its cut. If you release a game or an app once every six months that sells that much, you can live comfortably with iPhone development as your only source of income.

So, yeah, even with my pessimistic estimate, things look pretty good for iPhone developers ^_^.

kainjow
Apr 8, 2008, 11:51 AM
These X million figures are worldwide, aren't they? And I think the App Store is going to be US initially. So that brings the numbers way down.

You don't get referrals for your software because it's cheap, you get them because your software works. If it doesn't work, it doesn't matter the cost - people won't buy it. If it does work, and it's unique, and it's intuitive, people will buy it.

Selling software isn't a simple thing to do. You need to setup customer support. The greater the number of users, the greater the amount of bug reports and crashes, and the greater the chance you'll have no idea initially how to fix them ;).

It's fun and challenging, yet stressful. Don't expect it to be easy.

CyberGeek
Apr 8, 2008, 01:26 PM
These X million figures are worldwide, aren't they? And I think the App Store is going to be US initially. So that brings the numbers way down.

I just reviewed the event video, Steve made no mention of the App Store being US only to start. In fact, he took about five different opportunities to stress "every single iPhone user." The developer program is US only initially, but it looks like the App Store will launch internationally.

Selling software isn't a simple thing to do. You need to setup customer support. The greater the number of users, the greater the amount of bug reports and crashes, and the greater the chance you'll have no idea initially how to fix them ;).

It's fun and challenging, yet stressful. Don't expect it to be easy.

Quite so. That said, iPhone apps will tend to be simpler than their desktop counterparts, which should reduce the amount of support you'll need to provide (unless you write really bad code. Try to avoid writing really bad code.) Still, though, it would be very bad to charge for apps without being willing to commit the time necessary to properly support it.

psingh01
Apr 8, 2008, 02:57 PM
You really have to figure out the market for it. Obviously enterprise level apps will not be $3-6. They will much higher. But say a Tetris like game (i.e. casual games). I would not expect people to pay $49.99 for it. I think $5-10 would be acceptable provided the game is unique and of a high quality.

Now if others start releasing similar style software for much cheaper or even free....then you have to charge less for your app. Would you buy $50 Tetris or $5 Tetris? You just has to find the sweet spot for your apps.

I would certainly develop freeware in addition to payware. It depends on how much work goes into it and what is already available in the market. Some work would need to go into building a reputation/brand. If you are known for developing high quality/interesting software then maybe people will be more willing to pay extra for something new.

yayaba
Apr 8, 2008, 06:29 PM
A couple of questions to ponder:

1) Will Apple allow people to release freeware with donation options? I'm not sure if people will even pay for the app I'm making but I'd like to offer an option to donate. Only thing is it circumvents Apple's 30% take so I'm not sure if they'll be ok with it.

2) How will Apple filter the apps? By that, I mean will they allow there to be 10 Sports score apps, 20 Tetris clones, etc? Or will they eventually clamp down on the number of clones out there so the App store doesn't fill up.

Out of 10,000,000 users, I only expect maybe 1 to 2 million to even look at the app store. Out of that 1.5 million average, I'd say maybe your app has a 1-10% chance of being sold to them. It's not a crazy amount but it's a decent amount of money.

psingh01
Apr 8, 2008, 07:10 PM
A couple of questions to ponder:

1) Will Apple allow people to release freeware with donation options? I'm not sure if people will even pay for the app I'm making but I'd like to offer an option to donate. Only thing is it circumvents Apple's 30% take so I'm not sure if they'll be ok with it.

2) How will Apple filter the apps? By that, I mean will they allow there to be 10 Sports score apps, 20 Tetris clones, etc? Or will they eventually clamp down on the number of clones out there so the App store doesn't fill up.

Out of 10,000,000 users, I only expect maybe 1 to 2 million to even look at the app store. Out of that 1.5 million average, I'd say maybe your app has a 1-10% chance of being sold to them. It's not a crazy amount but it's a decent amount of money.

For the donation, I would assume that you can put an "about page" for the app with a link to your website. On the website there could be a donation button. I don't think that Apple could/would stop you there. I suppose if there ever were a direct donation option on the App Store then Apple would still take it's 30% cut.

I don't know about the filtering. One would hope that no filtering is done but who knows about that when it comes to Apple.

cheekybobcat
Apr 8, 2008, 07:43 PM
$999/yr subscription. Support includes one answered email per month :D

Talk about a bargain!

firewood
Apr 8, 2008, 11:01 PM
Note that many of the most popular commercial PalmOS/Treo applications sell for $15 to $30, even though there was tons of freeware also available for that platform. Since iPhone and iPod Touch devices currently sell for about the same price as PalmPilots did at the peak of that platforms popularity, why would software prices be very different between the two platforms?

ChrisA
Apr 8, 2008, 11:36 PM
At first every kid and wanta-be programmer will offer something for $1 to $6. No matter what you can think of you can bet there will be 50 of them offered for sale. Quality will in general be quite low but with some exeptions.

Later we will see free Open Source versions of popular applications. These will take longer to appear but because they are the work of groups of programmers cooperating it takes a while to organize. It will be very hard for one person working alone and charging even $1 to compete with a group who works simply because they enjoy it. If one of these open source apps becomes popular then we might see even more programmers attracted to the project.

The way to make money is not to sell a million copies of some very small program that anyone could duplicate in a month, no that will not work because 100 peope will see you getting rich off a month's work and try yhr same thing. What you need to d is sell one copy of the program for a million dollars. Or manybe one copy for $100K. or 100 copies for $1k each but in either case what yu are really selling is a service to a very few people who need something very tailored to their needs. For example I'm working on software to process telemetry from space launch boosters. I know my users by first name, all of them. In the past I've worked on radar signal processors, military simulations, flight control software. High value low volume is the only way anyone makes money with software.

My advice if you DO want to try and get ritch with a $2 per copy unit conversion tool. Invent about 50 "brands" and make 50 slightly different copies of your program. Because there will be 200 people all trying to sell unit converters and if you are selling 50 brands that gives you 25% market share. Hey I didn't think of this. Coca-Cola bottling company and Philip Morris figured it out long ago. ou need to cover the full range of price points. Sell the unit converters for every even dollar from $1 to $12 and have about 20 registered domain names and internet sites

SirOmega
Apr 9, 2008, 01:01 AM
I think the numbers break down this way...

By the end of june, 5M iPhones sold. HOWEVER, only 3M active on AT&T and ready for the 2.0 firmware. If 1M phones in the US (and abroad) are unlocked and on another carrier, they aren't available to sell apps to. Once firmware 2.0 is hacked so that you can use whatever SIM/Carrier you want, the numbers start to look better. So my baseline number is 3M units to sell to in June, 7.5M by Christmas (mostly due to 3G launch).

So I figure my sales target is 0.5%, or 15,000 units @ $5 ea is about $53K (35K after taxes if you have an accountant worth their salt). Almost enough to go buy a new G35 Coupe.

psingh01
Apr 9, 2008, 12:52 PM
At first every kid and wanta-be programmer will offer something for $1 to $6. No matter what you can think of you can bet there will be 50 of them offered for sale. Quality will in general be quite low but with some exeptions.

Later we will see free Open Source versions of popular applications. These will take longer to appear but because they are the work of groups of programmers cooperating it takes a while to organize. It will be very hard for one person working alone and charging even $1 to compete with a group who works simply because they enjoy it. If one of these open source apps becomes popular then we might see even more programmers attracted to the project.

The way to make money is not to sell a million copies of some very small program that anyone could duplicate in a month, no that will not work because 100 peope will see you getting rich off a month's work and try yhr same thing. What you need to d is sell one copy of the program for a million dollars. Or manybe one copy for $100K. or 100 copies for $1k each but in either case what yu are really selling is a service to a very few people who need something very tailored to their needs. For example I'm working on software to process telemetry from space launch boosters. I know my users by first name, all of them. In the past I've worked on radar signal processors, military simulations, flight control software. High value low volume is the only way anyone makes money with software.

My advice if you DO want to try and get ritch with a $2 per copy unit conversion tool. Invent about 50 "brands" and make 50 slightly different copies of your program. Because there will be 200 people all trying to sell unit converters and if you are selling 50 brands that gives you 25% market share. Hey I didn't think of this. Coca-Cola bottling company and Philip Morris figured it out long ago. ou need to cover the full range of price points. Sell the unit converters for every even dollar from $1 to $12 and have about 20 registered domain names and internet sites


There are different ways to make money, not just high value low volume. Not everyone will have the resources to develop enterprise level software or have connections to make specialized software for people who can pay $100k for a license. If those options are available to you then great, but it's not for everybody and not the ONLY way.

You wouldn't expect some body off the street to walk into a Fortune 500 CIO's office and say buy my iPhone software for $250K, it'll help you run your business better. That's not realistic.

However as an example (one that I've used already) a "casual game", i.e. games designed for non-gamers. Something that can just be picked up and played for a few minutes to just pass the time can be very cheap and generate high volume sales. It is no secret why Nintendo Wii, Xbox Live Arcade and PS3 store have all of these things built right into their consoles. It is for this very purpose. Selling cheap games at high volume.

Ultimately the software has to be of high quality. No matter if it is $5 or $500K.

ace2600
Apr 9, 2008, 09:25 PM
I think an important part to remember is that these are people who paid $400 for a phone plus spend at least $60 per month on a phone bill.

I plan to launch with 3 apps and base charging on the function and my demographic. One will likely be free, one $5, and one $15. Personally, when the new NIN album released at $5 - that hit a sweet spot for me mentally (yes, that's like comparing apples to a rock band).

I would say don't undervalue your product. But at the same time, it's easier to raise your price later than hurt your initial customers.

I plan to offer free upgrades to customers for probably a year, if not forever. Anyone have thoughts on upgrades and cost?