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iOS Developer David Barnard: 'Trying to Make the Boxed Software Model Work at $0.99 is a Fool's Errand'

I just sold my iPhone 4S to have money for the new one, and I'm using an old Motorola (non-smart) phone in the meantime. I happened to come across an "app" section and noticed they would do mico-trials: Either "Free for 15 minutes" or a discounted price for a short time frame. So a $10 app (for life) would be $1.99 for a "trial" week.

Something like that would be fantastic in the App Store.
 
Mr. Retrofire said:
If Apple uses encryption (certificates) and online validation via SSL/TLS, then they can:
a) Forbid that one Apple-ID user can redownload a time limited trial (App Store app tells Apples servers, that the first download was successful-checksum matches).
b) They can send a code over the secure connection to the App Store application, which converts the time limited, compressed and encrypted trial version in a compressed, not encrypted and unlimited full version.
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Never going to happen. Apple explicitly forbids time trial applications in the App Store. And I agree -- too often it leads to simply being held hostage by your software.
 
I also believe that apps should either have a test period, or should integrate in a way where all apps are free, but features are unlocked with in app purchases.

Example: Pocket Tanks. Maybe let you play a few games, or only like 10 weapons, no options. But you can buy the unlock of the app for the 99 cents that it is in the app store.

I'm sure we could all come up with countless examples, but the point stands that we need a trial period, not a lite version of the apps. A lot of the best apps are paid and don't have a lite version at all.
 
spillproof said:
I bet developers make more money off me from a free app with ads then a one time 70 cent earning. Or am I wrong, just curious?
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To make money off ads you need millions of impressions every week. Very few apps make any real money off ads
 
I don't get the argument that Apple caused the race to the bottom on pricing.

Sure, they created a single market place for apps for the iOS platform and gave all developers equal access to sell on it. But they didn't hold a gun to anyones head and say sell your apps for under $1, did they?

Or people just claiming Apple triggered the process with the app store?
 
freedevil said:
So basically he's unhappy that he has not created a million dollar app yet.
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Read Wil Shipley's blog (wilshipley.com). Shipley HAS created million dollar apps and he says the same as this guy.

Apple's AppStore is flawed and not good for developers on the long run. It needs paid upgrades, for example, and a curator that is not pushing the prices down.
 
Apple does not push prices down.

They priced their own premium software at $9.99.

I do agree that we need more flexibility, but as developers we are free to price our applications where we wish.

We don't price any of our software at $0.99...
 
charlieegan3 said:
Precisely, imo, the app store needs 2 things: trials and education pricing.
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The play store allows the 15 minute trials. Yet they don't increase sales at all.

It's funny how all the non-developers are saying this guy is a whiner for raising a few points about the App store model. It's true I think that the App Store doesn't quite help the indies in making a break but only reaffirms the status quo that big devs get big exposure, and smaller devs don't.

It's also naive to believe that the App Store pricing hasn't brought down software price, and as such, for a developer, it doesn't make it worthwhile to make more feature packed/complex applications as the time investment isn't worth the return.

In the end, instead of a making a "Swiss knife app" with tons of features, you break it down as much as you can into a bunch of smaller 0.99$ apps that on their own seem trivial. It diminishes the platform. iOS is powerful enough to run modern software that could lead to high productivity. I think right now the only thing holding it back is the App Store model.
 
Two things:

1. As a developer myself, you have to realize that "niche" apps aren't going to be the money-makers of your software portfolio at first. Instead they should serve as a reputation-builder for your company. If you can use your niche apps to promote the rest of your portfolio (ideally those appealing to a wider audience) then they essentially become subsidized marketing (assuming you're charging for them). Once your reputation is established, those people who never knew your niche apps even existed are now potential consumers. But you have to realize that niche apps -- out of the gate -- are going to appeal to a limited demographic and, therefore, will have limited success initially. You can't blame the consumers or the App Store model for that. It was your decision to enter into such a limited market. Your job (in addition to software developer) is properly market your app and convince everyone that they *need* your app. Making a living writing software is more than just submitting it to the App Store and sitting back and waiting to make money.

2. I don't buy the premise that you should charge more for niche apps to compensate for the limited audience. From an economic standpoint, this makes no sense. This isn't like selling after-market Lamborghini parts where you can charge pretty much whatever you want because it may be a required item. It's the opposite. You have a wide audience but an "optional" offering. Increasing the cost is not going to increase revenue. Instead, you need to focus on ways to appeal to that wider audience and, trust me, raising prices isn't going to do that. Raise your price AFTER you've built a substantial client-base, if you need to, or on subsequent offerings. But if you've got a quality product, I'd be surprised if you'd need to.

Just my opinion.
 
I'm at odds with this authors opinions, I do think it's possible to be successful on the app store but if and only if your app has universal appeal and if it can provide an excellent and unique experience.

On the matter of revenue, I don't think monthly subscriptions are the answer to everything... but if they could switch to a paid upgrade system, that's something I could see being successful. It would encourage developers to implement feature heavy updates that people in turn would be willing to pay for, instead of developers cashing out and abandoning an app after a few years. I'd still want to see stability improvements and bug fixes delivered free, but charging for new features would be a great way to convince customers to spend a little more... regular software developers have been doing this for years. And I'm sorry but if your app doesn't have any features worth adding, then you only deserve the one time fee you charged. There's a bit of a sense of entitlement from some developers, that they are owed additional revenue because $.99 pricing model didn't make them millionaires. You want more money, then give your customer something worth buying.
 
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Value Proposition and Services

I have been in software product management for over 15 years, and I can safely say that the author of this blog entry misses a critical point. The best way to get more then 99¢ for your app is to offer ongoing value. I get it… Software gets better over time, but customers expect you to add functionality and fix bugs. Customers of Microsoft Office are notorious for skipping upgrades, because they do not see the value, but eventually they do upgrade. The value is enough to get them off their butts and part with their money.

The best way to add value and get more money is to offer services beyond the packaged application. Hosted services are easily integrated into apps, and the value of those services can be priced higher than 99¢. Plus, customers are willing to pay recurring billings to continue those services. Some hosted services/SaaS providers offer free apps just to entice customers to buy the service. Zinio is a good example. Although, Apple makes it difficult at times to make certain in-app purchases (e.g., Amazon's Kindle or HP's MagCloud).

Another strategy would be to keep offering new apps and just let the legacy apps die over time. In this case, the model is to fire the app off and forget about it in a matter of months not years. Thus, the developer does not let the app go stale. The incremental improvements of apps for each version released diminishes over time. So, the idea is to cut it off before the improvement increment is too small to have a real impact. So, built it… then move on.

Finally, developers can build new features into newly named apps and notify legacy app users that the new app will offer a better value. If customers like what they see, they will pay for it. We saw examples of this model when iPad was released. iPhone apps gave way to iPad versions, and customers had to separately download them -- the moniker of "HD" and "iPad" were all too common in app names. So, change the name, add incredible value and be honest with your customers that this is how it works. At some point, the diminishing value for each incremental release that I mentioned earlier takes effect, and customers will not buy/upgrade. However, in this model, new customers will continue to buy.

Apple may have accelerated the sinking prices for apps, but I think it is important to observe that hundreds of thousands of apps would not be here today if we only had the Web/hosted and desktop OS markets available.
 
ekdor said:
And that app gets passed over by people like me. I can't stand the idea of rentals.
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That makes a lot of sense. However, without recurring income the developer is going to go out of business and whatever you spent initially will be gone.

I also like the idea that when you buy an app, you should be able to use it forever without paying any more. The issue is that as a low cost app developer in order to feed my family I need to be able to charge for each upgrade or charge annually. I prefer the upgrade method because if you don't want or need the upgrade don't pay for it.

But the periodic payment method makes sense also, as you can stop paying anytime you don't want to use the software. And what difference does it make if you pay $25 for an app that lasts a couple of years or $5/yr for an app that lasts a couple of years.

Oh, right you won't consider it because it's like a rental even when it would be in your best interest all other things being equal. Hmmm.
 
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Just wait for ios 6, when app store shows only 2 or 3 genius suggestions per page. New apps will have impossible time being discovered. It will all be apple's lover, EA.
 
Improving the store would go a long way to be able to find apps as well.The App Store on iOS is a joke. iTunes is not much better.

In 2012, Apple can't seem to figure out how to allow for even a video demo of the app. Movies have them, even music videos and TV shows have video previews. I always, always, always go to the developer site first before I buy so I can see a video demo (since trial apps aren't allowed).

I see search by Bestsellers, Name and Release Date. Where's search by best reviewed? Apple has failed miserably at social. Where's ranked apps by your friends?

Both iTunes on iOS and OS X need a major overhaul. They are both awful for discovery. For apps, video, and music.
 
nagromme said:
It’s a real bind, when the free market/human nature leads obnoxious IAP-based and ad-based business models to massive success (sometimes) while a great app that goes the route of “buy it and you have it!” is all too often a financial failure.

And there’s limited hope of being able to charge more (one-time or by subscription) even if an app is well worth it: because there will always be 10 competitors willing to jump in and undercut your price... and then go out of business, to be replaced by 10 more!

I exaggerate a bit and there are exceptions, but... it’s discouraging. I have no app to sell, but I have a game I hope to release one day. I’ll just treat it as a hobby and not worry if it flops. I won’t quit my day job 🙂 Which is exactly why it’s still not done...



Many apps do exactly that—but they still struggle to get the sale.
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I agree, there are games like angry birds that come around once in awhile, but even looking at the angry birds space game, they're making IAP's a major part of the game. It sad when you never really stop paying for things like that.
 
In thinking about this some more, the problem is larger than the App store. Apple was a small company for a long time trying to find that big hit and it did.

And this is exactly the problem. Apple forgot how to handle commodity products. The iPhone is quickly becoming a commodity (like the iPods, MacBooks and iMac already are). Once it reaches commodity status then Apple will, while in search of even more growth, continue to change the iPhone and eventually make it irrelevant. How do I know this?

Just look at other Apple products. Apple made some of the best products available in the pro market, but because they were not iPhones or iPod they killed them off. For example, xserve, 17 inch MacBook Pro, and soon to be Mac Pros, etc. They were not content to be the leader of a smaller market even if it made a profit. They also do not understand that pro product users helped drive the wildly successful consumer products that have made them the largest tech company in the world. Granted they always made great products and great products help success significantly, if not predominately. But we know by the early years of Apple that great products do not by themselves guarantee success. It was years of people talking about great Apple products.

Well they won't be content to be a leader of a large market either. It's their DNA. They have to change things or drop them. Pretty soon the next big thing will come along and iPhones will be a thing of the past. I know hard to believe. Today Apple does not care about Apps except to sell phones. They don't care about supporting apps on old phones or about making sure developers can make money. Why won't iMessage work in Lion. Why has armv6 support been removed from Xcode? No reason except Apple does not care about anything not related to selling new hardware and forcing the purchase of new hardware. As a developer, I will barely get 3+ months transition time before the new Xcode will only run the the latest OS X.

Now this does not bother me. As a company operating in a capitalistic economic system, they are free to operate however they wish. But don't think your going to change the Apple DNA. It won't happen. Recently they have learned how to revolutionize markets (iPod & iPhone), but in doing so they have forgotten how to maintain markets and honor loyal customers and it shows in every thing they do today. It will show in their performance tomorrow. People will only stand for so much.
 
The problem with the App Store is that it is filled if way-simple very limited apps that seem to have been written in one weekend. Not all are like this. So a buyer can't really know what he is buying and will not risk more than a couple bucks.

One good way is to RENT the software. Let's say the software was billed at 10 cents per month. If it was not junk I'd keep it for a uear and the developer would make $1.20. That is about 20% more than he's make selling it for 99 cents. But if the software had real value and it kept getting updated I might keep it for years and he make a lot more than 99 cents.

Many people would downoad a rental for 10 cents or 25 cents and if it turned out to be junk they would cancel the rental.

Developers who product junk would hate this but in the long run I think the rental model would cause the over all quality of software in the app store to increase. Developers who ould produce long term lasting value would make much more money and those producing junk would go broke and leave.

A user make be willing to buy $12 per year for something he uses every day that otherwise might have sold for $2 one time fee.
 
eddyg said:
Is there a mechanism whereby you can charge $1 (or free) for the app up front which gives the user N days of usage. And an in-app purchase for indefinite usage thereafter? In effect providing a trial period? Yes you could continuously delete and reinstall - but that would be a hassle.
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Treat it like a game. Aka make it a service.

Free to download. But you have to purchase in-game currency to use various functions inside the app. You are given 5 tokens to start with. Some minor functionality is free all the time. You can control how much each function costs with how tokens you get per dollar.

An option to pay outright for the app makes the whole thing free.

And you can value by making these tokens work across a whole range of apps.


----------

But the reality is most folks don't need anything other than the basic apps on their smartphones.

And if they do need something they really only need it for a temporary one-time task.

Combine that with a mad rush to write software for smartphones and make a quick buck and you have prices migrating to zero. It also doesn't help that the software never wears out and costs virtually nothing to store and distribute.

I remember how annoying it was, when I wanted a piece of software to do a task on my computer, that my only paid option was to pay $20 or $30 or $50 or more for a piece of software that I was likely never to use again after 5 minutes.
 
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There is also the $.99 problem. The iOS store should have cheaper price points. Why is a timer app $.99?

How about 10 cents? OR a nickel? Prices are too high for some of this software. Software doesn't wear out and costs next to nothing to distribute. And it is being sold into a market of hundreds of millions of users and soon enough billions.
 
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nt5672 said:
That makes a lot of sense. However, without recurring income the developer is going to go out of business and whatever you spent initially will be gone.

I also like the idea that when you buy an app, you should be able to use it forever without paying any more. The issue is that as a low cost app developer in order to feed my family I need to be able to charge for each upgrade or charge annually. I prefer the upgrade method because if you don't want or need the upgrade don't pay for it.

But the periodic payment method makes sense also, as you can stop paying anytime you don't want to use the software. And what difference does it make if you pay $25 for an app that lasts a couple of years or $5/yr for an app that lasts a couple of years.

Oh, right you won't consider it because it's like a rental even when it would be in your best interest all other things being equal. Hmmm.
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Please. So all users will have to keep track of all this little subscriptions they have and wonder why some hack dev is taking money from their credit card for app they deleted months ago. Great.

Here is tip for you, you cannot work for small time and expect it to feed ur family forever. Make new app. The app model is crowded and forever changing. Is so easy to do, many do it in spare time.
 
Also this talk that the ones making money writing software are the exception is the norm for all business. The reality is most businesses fail.
 
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