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Low App Store pricing squeezing developers?

updated 09:50 am EST, Wed December 10, 2008

App Store pricing squeeze

The current pricing schemes at the iTunes App Store are making it difficult for developers to operate, claims Iconfactory engineer Craig Hockenberry. Involved with the creation of apps such as Frenzic and Twitterific, Hockenberry has published an open letter to Apple CEO Steve Jobs, complaining that the current structure of the App Store leads to a plethora of what he terms "ringtone apps," designed to be cheap instead of functional or well-made. The vast majority of titles are free or just 99 cents, to the extent that a rapid dropoff begins at the $1.99 pricepoint.

The App Store is built to give prominence to 99-cent apps, says Hockenberry, and this means that developers will often choose to pander to that market in order to reach a larger volume of customers. People are also unable to gauge the quality of a $2.99 app versus a 99-cent one, due to only having access to screenshots and a text description before reviews are submitted. Given a choice people will frequently choose the 99-cent app, since there is less to lose if it proves to be a bust.

Hockenberry further notes that quality is discouraged by the economics of development. To break even on a three man month project may require upwards of 115,000 downloads, while working on something worth six or nine man months can require between 215,000 and 322,000 downloads, a virtually impossible target. Raising an app's price might theoretically compensate, but the diminished appeal would be counterproductive. This is why Iconfactory concentrates on lower-cost apps, says Hockenberry.




by MacNN Staff

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Comments

  1. johnsou

    Joined: Dec 1969

    +9

    I Disagree

    One of the more expensive mainstream apps " BeejiveIM" is priced at $15.99. This app has over 700 reviews and has almost a 5 star rating. There are many other examples of apps from $4.99-$9.99 range that are of the same quality and rating.. If you build a super high quality app that is unique and provides value then people will buy and will jump at the opportunity to drop there money.. some developers also have a light limited function version so they can test it out first. Also i think i know of a voice recorder that is free with ads or $4.99 without that has great reviews, Griffin Italk. So in retrospect if you build it " they will buy it".

    Comment buried. Show
  1. chelsel

    Joined: Dec 1969

    -31

    all will be free soon

    Open source has proved that free is the future of software... without patent protections of software that is the ultimate destiny.

  1. sammaffei

    Joined: Dec 1969

    +8

    Open source = not eating

    chelsel = idiot

  1. horvatic

    Joined: Dec 1969

    +7

    That's not what I've read

    Funny, I've read that most of these developers are making so much money they've quit there full time jobs. Some of gotten instantly rich off of one application. Plus consider that there are so many of them out there, competition is going to be pretty strong. Make a great app, it will sell well. Make a poor app, don't look to make a profit. Also, if whomever thinks the prices are to low, maybe they should develop other software and get out of doing software for the iPhone. I think a max price target of a 5 star rated app should be $15, anything higher and unless it is really spectacular I don't think anyone would buy it anyways.

  1. horvatic

    Joined: Dec 1969

    +9

    More FUD!!!

    The App Store is built to give prominence to 99-cent apps, says Hockenberry.
    I find that to be non-sense, there are plenty of apps at $1.99 to $9.99. He obviously hasn't gone through the app store lately. More FUD!!

  1. Guest

    Joined: Dec 1969

    +7

    How is this new?

    The best apps will always get exposure, and always be able to charge more. This is true in Mac software, and true for the iPhone apps as well. No doubt there are a ton of free/cheap apps for the Mac, but the good apps still get attention and make money.

    In the Canadian App Store currently, only two of the top 10 paid apps are 99 cents, and one of the apps is $9.99. What is the issue?

  1. simdude

    Joined: Dec 1969

    +3

    bogus

    A decent application will have no problems selling at 9.99. Many games are charging this and compared with paying $39-$59 for a Nintendo DS or PSP game, that's a steal.

    As for the open sourcing all software comment forget it. There are some very good open source projects but the idea that open source is some panacea is ridiculous. I use several open source tools at work, but always with caution. We have been burned by going with projects that lost developers and interest, couldn't get support etc. For every successful open source project out there, there are 100 that fail. That's fine if you want to poke around with stuff when you're in school, but when your time becomes valuable (i.e. a real job where time=money) paying for software works. Why is it people think software engineers should just donate thousands of hours of work for free? If you're a plumber, after a hard days work, do you go around offering to fix peoples plumbing for free? If you want software for free, go learn to program and write it yourself.

    As far as IconFactory, you can make money selling your applications, but part of making money on commercial software is pricing for the market. Why does Iconbuilder for the mac cost $79 while IconBuilder for Windows is $49? I will pay for software, but when I see a developer stick it to mac users, I buy from another developer.

  1. ctz

    Joined: Dec 1969

    +2

    People pay if it's worth

    I think that we all (or almost all :) ) have some common sense, and we're ok to pay a few bucks if we think the app can bring us something more.
    it's true that app store consumers think in terms of service / fun provided by an app, and not in terms of time spent to develop it.

    For instance some apps like "ImageTouch 2" probably require a server to stock each user's datas. But no one cares ! We're ok to pay for this kind of app just because it gives us some fun.




  1. danviento

    Joined: Dec 1969

    +3

    Try Harder.

    If you don't think your description of screen shots make your app stand out for the rest as worth more money, then change the way you advertise in the store. If your product is so much better, surely you can find a way to tell people why or show a few comparison screen shots.

    h***, you can even have a couple dozen employees or friends "buy" it and leave glowing reviews to help boost your ads. Find ways to make your app top the list in searches.

    iTAS may not be the playing field you're used to, but you can still do well in it if you can break out from the crowd.

  1. JulesLt

    Joined: Dec 1969

    +3

    Free for all

    Chelsel - that's a statement of religious belief rather than a truth.

    The fact you cite Patent, rather than copyright, protection suggests you don't really have a strong grasp on the area.

    Even GPL open sourced code actually relies on copyright law to keep that source open (i.e. there have been cases suing firms who have used GPL'd code in closed applications).

    Open source works for some apps, but is not a good model for single player games or any softwhere where the last thing you want to do is pay for a support contract or consultancy to get the thing working.

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