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.