App Store Developers Debate Pricing and Marketing

[rdowns]

Link


Or as I call it, why we see so many garbage apps.

With 10,000 applications and 300 million downloads in less than four months, Apple’s iPhone may be the most successful software platform since the IBM personal computer.

But that doesn’t mean all is well in the App Store.

In fact, the business model that nurtured its success now threatens to choke off the programming talent that sustained it...

The sticking point, as Hockenberry sees it, is that spike by Edible Apple’s graph: the proliferation of 99-cent applications — what he dubs “ringtone apps” — as developers reduce their prices to the lowest possible level in order to get favorable placement in iTunes.

“We have a lot of great ideas for iPhone applications,” Hockenberry writes. “Unfortunately, we’re not working on the cooler (and more complex) ideas. Instead, we’re working on 99¢ titles that have a limited lifespan and broad appeal. Market conditions make ringtone apps most appealing.”...


What should Apple (AAPL) do about the ringtone problem? Hockenberry doesn’t offer Jobs a solution. (”You and your team are perfectly capable of dealing with it on your own terms,” he says.) But he warns that pricing issues are choking off innovation and could prevent development of an app that could do for the iPhone what the spreadsheet did for the Apple II or desktop publishing did for the Mac.

[jessica.]

That's just it, many people do not want to spend money on apps and $.99 cents appears to be their sweet spot. Look at these boards. Many people are younger and they're struggling just to buy the phone let alone pay for the service. Then on top of that they want the apps but they don't want to pay. Those who jailbreak are ok, those who do not will pay $.99 here and there.

Those "business users" or those people who genuinely need an application will pay. I did not pay $6.99 for AirShare, but I would in a heartbeat as it fills a slight gap that Apple left me with when I bought the iPhone.

Why do we see so much junk in the app store? Quite frankly it has everything to do with the model they're using to approve apps, just as the article states/implies.

There is also another issue that either wasn't brought up or I missed. That is developers releasing an app for free then turning it to a fee-based app. Or, they release it for say $9.99, drop it down to $2.99 as a "sale", then back up again. People wonder how the hell the $9.99 app made it to the top, but that is how. People are more prone to waste $.99 cents or a couple more bucks at that, somehow wasting $10 hits people a bit harder.

[rdowns]

I think there are a lot of developers who will not develop for a 99 cent platform. Someone out there has the next Better Than Sliced Bread application idea but won't build it because they know they can't sell it for the 5 or 10 or 20 bucks needed to build and support it.

[detz]

And this is the reason I'm going towards contract work instead of developing my own apps. If your app is not $0.99 you get bad reviews on how it should be free or cheap, and there is always someone out there willing to copy your app idea, make it cheap and undercut you. Unlike blackberry and Windows Mobile users iPhone users are not willing to pay for quality software.

With that said, there are not that many quality apps on the store either...people are just trying to make a quick buck so they "bust" out a crappy app in a week or too and post it on the store.

I doubt I will release anything on the store under $4.99 now, it's not worth my time to create useless apps.

[Stebus]

I've noticed this problem too, and honestly, the only way I see it improving is Apple changing their approval process. Maybe start looking at the actual usefulness of the app rather than just the code? I realise this is stepping on dangerous territory but it could stop the people that make "how long until..." apps. Maybe if an app wasn't deemed worthy they could still have it in the app store for free? That would mean that if people just enjoy making apps then they could still have them included and distributed. I know it's not perfect, but it seems better than the present situation.

[BergerFan]

One man's trash is another man's treasure.

[kingtj]

There are PLENTY of quality apps for the iPhone that don't cost a penny!
Look at the popularity of, say, the AP News Wire reader software, or "UrbanSpoon", or the Aurora Feint game. I've personally installed 4 or 5 screens full of FREE applications, games and utilities that I like a lot and find useful.

The *only* reason you see people paying more for software on other phone platforms is because the competition isn't there. If you're tied to a contract for a year or 2 on some Moto Razr phone (say, with US Cellular, for the sake of example), you're stuck buying "BREW" based games and apps from their little "app store", at mostly inflated prices. In the grand scheme of things, they figure "This sucks, but I guess I may as well pay $5.99 for this game if I want to play something on this phone for the next 2 years I'm stuck in this contract that already costs me $60+ a month anyway."

When you develop for the iPhone, yes, you're under more pressure to deliver "value for the dollar". If you can't handle that? Good ... go away and shovel your more costly software at people using inferior phones, who are FORCED to pay more.

The comment in the original article is VERY insightful. Too many developers acted like the Apple app store was some kind of "golden ticket" to generate thousands in "automatic sales". In reality, they need to *advertise* their product just as much as anyone else would. Give people direct links to buy your app from iTunes or whatever ... but MARKET the thing! Otherwise, yeah -- it's gonna sit there with THOUSANDS of other apps, often FREE or 99 cents each, and be BURIED under them.

Originally Posted by detz

And this is the reason I'm going towards contract work instead of developing my own apps. If your app is not $0.99 you get bad reviews on how it should be free or cheap, and there is always someone out there willing to copy your app idea, make it cheap and undercut you. Unlike blackberry and Windows Mobile users iPhone users are not willing to pay for quality software.

With that said, there are not that many quality apps on the store either...people are just trying to make a quick buck so they "bust" out a crappy app in a week or too and post it on the store.

I doubt I will release anything on the store under $4.99 now, it's not worth my time to create useless apps.

[rotarydialz]

One idea is dor developers to release the first level of a game for free and charge for the full version. Another idea is for developers to provide a link to a demo of their app. I'm not interested in paying for something that may turn out to be garbage. Maybe there should be a group of impartial reviewers who would be given a free copy of an app to test it's worthiness. Pay now, cry later is not the best business model.

[tveric]

I'm amazed that a developer has the gall to complain about the App Store.

Consider this: anyone can submit an app to the store, and most of them get approved, giving them INSTANT access to a marketplace of millions of people. Contrast this with music, movies.... or even the software you see for sale at your local electronics chain! If a no-name filmmaker makes a movie, can he get it to be shown at multiplexes around the world? No. Can a musician instantly get his album into Wal-Mart and everywhere else without a record deal? No. If you write some great software for, say, a Mac, will your software show up in a nice box in the local Apple retail store? No.

Part of the reason we have to pay $10 for a movie when it comes out or $15-20 for a CD is that the distribution channels are so tightly controlled. It's really a de facto monopoly that allows those in charge to get more $$$/person than they would get in a truly open market. Their heavy marketing takes care of ensuring that enough people feel they HAVE to pay $X.99 for whatever they're peddling.

By contrast, the App Store has removed these distribution barriers, mostly. The downside for a developer, of course, is that suddenly everyone else has the same access to this new market that you do - making it extremely difficult to make your product stand out. So what do you do? As some have suggested, put up a 'Lite' version of your app for free - it's kind of the new shareware. But don't cry to me about how it's a race to the bottom - the App Store is true capitalism, the good apps will survive and people will pay what they're worth, because in a real open market, the definition of what something is worth is simple - it's whatever people are willing to pay for it.

There's another strength to the App Store that not many have mentioned - if I don't want to pay for a movie or CD or even Photoshop, it's pathetically easy to download any of these from the Net and use them. If I want to do the same for an App Store app, I have to jailbreak my iPhone - not a trivial matter and I run the risk of not having the phone work properly and i can't update the iPhone software, etc... by making it so difficult, Apple has provided protections to App Store developers that movie studios and recording artists (not to mention software companies like Adobe) don't have.

[Xian Zhu Xuande]

Originally Posted by kingtj

When you develop for the iPhone, yes, you're under more pressure to deliver "value for the dollar". If you can't handle that? Good ... go away and shovel your more costly software at people using inferior phones, who are FORCED to pay more.

This is offset completely by the actual demand for iPhone apps. Far more iPhone users download apps than do RAZR users, and the RAZR users who download apps only download a fraction of what is offered on the iPhone. Would you rather sell an app 200 times for $5 or 59,000 for $1.99? And don't forget that you keep more of your sales value on the iPhone than you do on the other platforms (unless you're a heavy duty developer on a platform that has a large up-front payment).

[Xian Zhu Xuande]

Originally Posted by rdowns

I think there are a lot of developers who will not develop for a 99 cent platform. Someone out there has the next Better Than Sliced Bread application idea but won't build it because they know they can't sell it for the 5 or 10 or 20 bucks needed to build and support it.

There are plenty of high-end applications on the iPhone which are sold at higher pricepoints without trouble. This ranges from professional apps to references like the American Heritage Dictionary, right down to games. Fieldrunners has been purchased a multitude of times and it is, what, $4? $5? There are other $10 games which sell every bit as well. Just look at the top charts for paid apps. It is amazing enough to even see some of them among the $.99 apps (and not all of them got there by being free for a while).

I'll wager the apps being made by some of the whiners aren't exactly top-tier revolutionary or production quality products.

As for me, I've spent over $150 on apps. I know a few people who have spent just about as much. There are people out there who actually have a job and don't mind spending some money on a great app for their phone.

[MacRumors]

While the iTunes App Store has been a huge success in terms of iPhone app distribution, there have been lingering complaints that the current structure encourages a "race to the bottom" with massive competition dropping the price of apps towards $0.99. The most vocal complaint about the current system comes from Craig Hockenberry who published an open letter to Steve Jobs on the issue:

As an iPhone developer who’s been in the App Store since its launch, I’m starting to see a trend that concerns me: developers are lowering prices to the lowest possible level in order to get favorable placement in iTunes. This proliferation of 99¢ “ringtone apps” is affecting our product development.

Hockenberry claims that these $0.99 "ringtone apps" prevent developers from working on more substantial and creative applications, instead trying to cash in on the latest fad.

Jesse Farmer of 20bits, however, disagrees with Hokenberry's letter and distinguishes that while the App Store is a very good distribution channel, developers should not rely on it as their only marketing channel.

Distribution and marketing aren't one and the same, and this tension is why developers are feeling pinched.

Distribution is the "how," as in, how do you get your product to your customer? .... Marketing is the "why," as in, why do your customers want to buy your product?

Farmer suggests that developers should look for creative ways outside the app store itself to stimulate demand. He points out that lower prices aren't what convinces people to buy Beyonce's album, but instead the multi-million dollar marketing campaigns surrounding the brand.

Article Link: App Store Developers Debate Pricing and Marketing

[amac4me]

I think the number of apps to date speaks for itself. This distribution channel and way of doing business for developers and Apple will continue to grow at a rapid pace in the near to medium term.

[crees!]

Both Hockenberry and Farmer are correct in their statements.

[unfaded]

I would say that the lack of easily playable demos are what keeps people at a 99 price-point: they don't want to buy something, play it for a few minutes, realize it blows and then feel ripped-off.

There are a number of apps that are worth more than 99 cents, but how many apps on your phone can you say are worth the price they're at?

Fieldrunners, the tower defense game, for example. I bought that for a few dollars and it brought me about a day's worth of decent game. Sure, the future value may expand, but in its current form, I feel the price grossly over-valued the application.

What's missing from iPhone apps is depth, and that's why 99 cents is the price point to meet.

Also, doesn't this ******* know we're in a recession?

[bigmc6000]

How many times have we seen the old bait and switch when it comes to App Pricing? They'll release it at 4.99 or whatever, get a few buys and then for a (insert time frame here) they'll sell it for 99 cents and it'll rocket to the top of the paid apps list and then after that 99 cent promo period it'll remain up there for quite some time because people look at the top 10 lists and it will get exposure it wouldn't have anyway.

As with previous post I was disappointed with Field Runners - I find TapDefense to be much better (and it's freakin' free!)

[lofight]

Originally Posted by unfaded

I would say that the lack of easily playable demos are what keeps people at a 99 price-point: they don't want to buy something, play it for a few minutes, realize it blows and then feel ripped-off.

There are a number of apps that are worth more than 99 cents, but how many apps on your phone can you say are worth the price they're at?

Fieldrunners, the tower defense game, for example. I bought that for a few dollars and it brought me about a day's worth of decent game. Sure, the future value may expand, but in its current form, I feel the price grossly over-valued the application.

What's missing from iPhone apps is depth, and that's why 99 cents is the price point to meet.

Also, doesn't this ******* know we're in a recession?

I couldn't agree more.
I've only paid for enigmo and cro-mag rally, and I played those games 5 times and I was bored of it, fortunately I bought them when it was black friday. In the contrary, I would be happy to pay a bit for tap tap revenge, this is a real great app!!

[itcheroni]

What if Apple sold ad space to developers on iTunes? My gut says, I don't like it, but my head asks, why not.

[fleshman03]

Originally Posted by unfaded

Also, doesn't this ******* know we're in a recession?

My thought exactly. He sounds like he's wining that people don't want to shell out what he feels is fair for the app. People will pay what they feel is fair. (Supply and demand doesn't quote hold true, since supply isn't limited. Competition on the other hand...)

This d-bag never took an econ class?

Besides, his argument that there is a killer app that is going to take 6/9 months and $150k/$225K is slightly moot. How many people do you need putting 6 or 9 months into an app? If that many people are needed, he'll have to proceed slower than he would like. Put two people on it and let them work for a year. Build up those .99 cents and put that towards development.

[Small White Car]

Originally Posted by fleshman03

My thought exactly. He sounds like he's wining that people don't want to shell out what he feels is fair for the app.

No, this isn't what he's saying at all.

He's complaining that the store seems to be centered around the "top downloaded" lists. And of course that list will allways be full of the cheaper apps. So even programs that "fairly" cost $10 will hardly ever appear on those lists.

He wants the store to be presented in different ways that give all price-ranges a chance of being seen, not just the lowest prices.

In short, I don't think you understood him at all.

[Turmoil]

There sure is alot of junk in the app store- I think both the developers are right - marketing is important and the junk apps do impede development. It's also increasingly hard to find the gems in the app store since there is so much junk.

[Luke1robb]

Originally Posted by Turmoil

There sure is alot of junk in the app store- I think both the developers are right - marketing is important and the junk apps do impede development. It's also increasingly hard to find the gems in the app store since there is so much junk.

To your point the rating system is also crap, creating a system where you can't trust anything to show you the what the good apps are. See my thread about the rating system here --> http://forums.macrumors.com/showthread.php?t=614504

[dwd3885]

The developer has a point, but if the app is good and it's 7.99, people would buy it. The reason is that the .99 apps are worth a shot. If you want to make yourself a 7.99 game, then make a FREE demo for people who might be on the fence, then you got your 7.99 if the game is any good

[ztigerpaw]

Originally Posted by Turmoil

There sure is alot of junk in the app store- I think both the developers are right - marketing is important and the junk apps do impede development. It's also increasingly hard to find the gems in the app store since there is so much junk.

This is why I'm looking forward to Sim City for iPhone. It looks like and has been said to be full featured (port!!). Maybe even well wroth the $9.99. Which is the first, in my opinion, for a mobile device. Other cross-platform games seem to be watered down when they hit mobile devices. Were only on the first year of the App Store and who knows what the second will bring in terms of applications. Just hope they do something about the junk apps.

Lemme make one thing straight to the developers who make useless apps... you payed $99 just to submit that!?

[Stately]

Originally Posted by Turmoil

There sure is alot of junk in the app store- I think both the developers are right - marketing is important and the junk apps do impede development. It's also increasingly hard to find the gems in the app store since there is so much junk.

I agree it does become difficult to sift through the apps that aren't very valuable. There are some very powerful apps however. As a result, with enough determination, one can sift through the craziness and have a powerful phone.