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App Store Developers Debate Pricing and Marketing

rdowns

macrumors Penryn
Original poster
Jul 11, 2003
27,397
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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.
 

GoCubsGo

macrumors Nehalem
Feb 19, 2005
35,741
148
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.
 
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rdowns

macrumors Penryn
Original poster
Jul 11, 2003
27,397
12,513
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.
 
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detz

macrumors 65816
Jun 29, 2007
1,051
0
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.
 
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Stebus

macrumors member
Sep 18, 2008
47
0
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.
 
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sushi

Moderator emeritus
Jul 19, 2002
15,639
3
キャンプスワ&#
I don't see a problem. The 99 cent apps are fine.

More expensive good apps are being added as well. Good apps can get a referral from web sites and other means.

Both have their place.
 
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Maxington

macrumors 6502
May 11, 2007
326
0
Oshkosh, WI
As more utility and the adoption rate by corporate customers increase you will see the bell curve expand more to the 1.00 - 49.99 apps, but the bulk will always be free or $0.99
 
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ninjadex

macrumors 6502
Jun 1, 2004
328
215
There are already some very innovative apps on the app store that seem to at least be somewhat successful, even with more expensive prices.

Make software people want to use, price it and market it accordingly, and you will be successful.
 
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MacRumors

macrumors bot
Apr 12, 2001
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App Store Developers Debate Pricing and Marketing

https://www.macrumors.com/images/macrumorsthreadlogodarkd.png

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
 
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amac4me

macrumors 65816
Apr 26, 2005
1,303
0
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.
 
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nottooshabby

macrumors 6502
Jul 12, 2008
365
41
I think it would help if the Top Paid list was ordered by revenue and not downloads. If App A and App B do the same thing but App B has more features so they charge $1 more, and app A and app B end up having the same number of downloads, App B should appear higher on the list. Clearly it's more successful it people are willing to pay more for it.
 
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unfaded

macrumors 6502
Dec 12, 2002
276
0
Seattle, WA
or...

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?
 
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Turmoil

macrumors regular
Jul 2, 2008
242
0
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.
 
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minik

Contributor
Jun 25, 2007
1,335
143
somewhere
I kind of disagree with Hockenberry's argument. For some reason, if the app is good and valuable to me, I'm happy to pay $4.99 for it.
 
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G4R2

macrumors 6502a
Nov 29, 2006
547
4
If there's a problem here, it's not the app store pricing system but rather the inability of the established software development model to adapt to a democratized way of creating and distributing software. Frankly, much of the letter appears to be belly aching about how new software developers now have the ability to translate their ideas into applications and to distribute them without significant overhead. Given the increasing ease by which applications can be created the question arises as to whether the higher cost of programming can be justified on a platform such as the iPhone.

But if it's true that the quality of software is being constrained by the abundance of apps created by a larger pool of developers who can translate their ideas into code through easier programming tools and distribution channels, as counterintuitive as that might seem, then a solution might be including an emulator within iTunes that permits users to preview the apps before purchasing them.

I would say that incorporating a shareware style system of disabled, high cost apps is not going to improve the iPhone experience but rather detract from it. And I don't like the idea of Apple putting up walls to new developers in order to protect other developers who don't like having to share what they think their niche is and what they are entitled to with new comers.
 
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bigmc6000

macrumors 6502a
May 23, 2006
767
0
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!)
 
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Luke1robb

macrumors 6502a
May 3, 2008
809
0
Cambridge, MA/Smithfield, RI
Both Hockenberry and Farmer are correct in their statements.

I agree, I don't think either of them is wrong. I also think though, that there are way too many apps, in that, there are so many "pointless" apps, and it is hard to navigate it all on your phone. The app store on the iphone is becoming like the mobile itunes store, just for specific searches. If you really want to figure out which app is good or not, you have to use your computer, unfortunately.
 
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lofight

macrumors 68000
Jun 16, 2007
1,954
2
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!!
 
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zombitronic

macrumors 65816
Feb 9, 2007
1,115
6
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.

Lower prices are a HUGE factor in what convinces me to buy an app. I'm about 5 times more likely to impulse buy an app for $0.99 over an app for $1.99. Increase that dollar amount, and I'm less and less likely to buy the app. Even a few games that I'd love to try out, I've been holding off on. I've bought a few $9.99 apps, but it's not an impulse buy. Many games, I'm fine with the free version.

I don't know any official numbers, but I would bet that a good $0.99 game or app could outsell a great $9.99 game by enough to actually out-profit it.
 
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Luke1robb

macrumors 6502a
May 3, 2008
809
0
Cambridge, MA/Smithfield, RI
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 --> https://forums.macrumors.com/threads/614504/
 
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capnjiggins

macrumors member
Aug 29, 2008
31
0
for the most part, this is an open market. If your app is quality, you can experience success with $10 apps (Monkey ball,many of gamelofts titles, etc..) The user base is large enough to sustain many developers at .99 per app. The model the store and it's pricing are at right now is perfect IMO. Some developers need to quit blaming the market for their faults.
 
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twoodcc

macrumors P6
Feb 3, 2005
15,307
26
Right side of wrong
well, i can see where he's coming from. but as a consumer, i want to see those lower prices. heck, if the app is good, and it's $0.99, you can still make a ton of money if a lot of people buy it
 
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