Interesting Insight into Cheap App Conundrum!

[nizy]

Read this interesting blog with a developer writing an open letter to Steve Jobs explaining the shortcomings of cheap $1 apps vs. more expensive, complicated and interesting ones. Even explains the development costs and units required to break even.

Original Blog:
http://furbo.org/2008/12/09/ring-tone-apps/

[BulletDev]

Amazing! Thank you for sharing, lets hope for a response :)

[rich_952000]

Amazing! Thank you for sharing, lets hope for a response :)

Good article, good find hopefully The Jobbs handles business.

[VirtualAlex]

Nothing Apple can, or should do about this. The only suggestion I can really is for Apple to hire some in-house app reviewers that should concentrate on 4.99+ apps and give them reviews, and maybe make a premium apps section. So people can have better access to more "serious" applications, and get a better feel for them with a full professional review, and videos etc...

[Oliver]

The only problem I can see with the AppStore is that the top lists are list over all apps of all price categories. Apple has to create more than the current two categories for apps, to increase the visibility. That's all!

Free
Low (,99 to 3,99)
Mid (4,99 to 8,99)
Premium (9,99 and above)

That would also shift the view on apps a bit, because it would merge different price ranges and also give a range on the quality and content of the apps, especially with the Premium stuff (if it's a good app which a dev feels is premium quality, than just give it a 9,99 price tag or even higher and it will show up as a Premium app in iTunes). And when 3,99 is recognized as a low price, maybe the number of people complaining about an app whichs costs less than a burger will decrease.

[Haephestos]

The only problem I can see with the AppStore is that the top lists are list over all apps of all price categories. Apple has to create more than the current two categories for apps, to increase the visibility. That's all!

Free
Low (,99 to 3,99)
Mid (4,99 to 8,99)
Premium (9,99 and above)

That would also shift the view on apps a bit, because it would merge different price ranges and also give a range on the quality and content of the apps, especially with the Premium stuff (if it's a good app which a dev feels is premium quality, than just give it a 9,99 price tag or even higher and it will show up as a Premium app in iTunes). And when 3,99 is recognized as a low price, maybe the number of people complaining about an app whichs costs less than a burger will decrease.

That is a really great idea! We should start a petition or something!

[HerbertKornfeld]

What Apple could do is weight the best-seller list by revenue rather than unit sales. That way a $10 app with 1,000 sales could get ahead of a $1 app that sells 5,000.

Sound advice, if you ask me.

[Paulio]

That is a really great idea! We should start a petition or something!

YES! I too want a better AppStore! let's do it.

-Heaphestos
-Paulio
-...

[BulletDev]

-Heaphestos
-Paulio
-James (BarringtonSoftware)

[SLDROFHLA]

-Heaphestos
-Paulio
-James (BarringtonSoftware)
-SLDROFHLA

4 people, YEAH!

[Mr. Charley]

"But what happens when we start talking about bigger projects: something that takes 6 or even 9 man months? That’s either $150K or $225K in development costs with a break even at 215K or 322K units. Unless you have a white hot title, selling 10-15K units a day for a few weeks isn’t going to happen. There’s too much risk."

As a consumer, I yes, it can happen if you have a good app. And sure, as the article says can be done, but there's too much risk. So that's really the argument right? Just too much risk that he/she is willing to take. As a company, if you want to be innovative and make the big bucks, you gotta take a risk.
Ever heard of risk/reward?

"I see customers complaining about how “expensive” a $4.99 app is and that it should cost less. (Do they do the same thing when they walk into Starbucks?) "

Uh, yeah, I complain that Starbucks is too expensive for coffee. Sure, I don't complain to the dude/gal at the counter, I take my business elsewhere where I can get an equally good cup of coffee or in my opinion even better tasting coffee elsewhere (Tim Horton's here in Canada).
To say that we need more expensive apps, I say no we don't. Let the market dictate what your app is worth. If you have a good app, you'll make your money back.
There are some apps that are in the higher tier making the money. Sure, it's bigger developers but they're taking the risk by putting out the money in the first place for all the developers they hire for the quick turnaround time.

Can we benefit from a better system in the app store? Sure we could. But should we encourage higher prices, not in the least (as a consumer of course).
People are going to jump all over Rolando and NFS due to the hype, and people have more than willingly spent $9.99 on other apps. It's the market that dictates it and when there are some decent apps at $.99, then X app at $4.99 which doesn't offer that much more is too expensive.
At the same time, is Warfare Incorporated at $4.99 a better deal than Strategic Assault at $.99. I say yes, no questions asked. It's worth it. Games can be profitable and sell well, if it's something that consumers deem to be of value to them.

Frenzic for example may be a great game, but there is so much competition (there's that word again) that it just may not be worth $4.99 when there are other similar style games that you can buy for $2.99.

End rant.

*Disclosure*
This post was obviously created by a consumer wanting the lowest price possible :)

[JuncoPartner]

The only problem I can see with the AppStore is that the top lists are list over all apps of all price categories. Apple has to create more than the current two categories for apps, to increase the visibility. That's all!

Free
Low (,99 to 3,99)
Mid (4,99 to 8,99)
Premium (9,99 and above)


This is the best idea I've seen yet for sure.

Ideally apple could review every application too, or how about links to reviews.
Or even a meta-score of apps from chosen sites?
I know we as developers can and do put in quotes but a proper system for this sort of thing could really help.

[nizy]

Just seen another one, in reply to this. Argues that devs should use better marketing etc to stimulate demand for their apps.

Sounds just like Gameloft does with its games.

http://20bits.com/articles/the-099-app-store/

[nizy]

And another! This 1 discusses both views. It has an interesting bar chart detailing the cost of apps on the app store. Looks like the guy has a point really!

http://apple20.blogs.fortune.cnn.com/2008/12/10/trouble-in-the-99-cent-app-store/

[Haephestos]

And another! This 1 discusses both views. It has an interesting bar chart detailing the cost of apps on the app store. Looks like the guy has a point really!

http://apple20.blogs.fortune.cnn.com/2008/12/10/trouble-in-the-99-cent-app-store/
Very interesting.

[Mr. Charley]

For the sake of argument, here's some blogger's open letter response to the article :)

http://www.211me.com/corp/blog/index.php/2008/12/10/an-open-letter-to-craig-hockenberry/

[istopmotion]

-Heaphestos
-Paulio
-James (BarringtonSoftware)
-SLDROFHLA
-istopmotion

Five people on the petition :)

The only problem I can see with the AppStore is that the top lists are list over all apps of all price categories. Apple has to create more than the current two categories for apps, to increase the visibility. That's all!

Free
Low (,99 to 3,99)
Mid (4,99 to 8,99)
Premium (9,99 and above)

That would also shift the view on apps a bit, because it would merge different price ranges and also give a range on the quality and content of the apps, especially with the Premium stuff (if it's a good app which a dev feels is premium quality, than just give it a 9,99 price tag or even higher and it will show up as a Premium app in iTunes). And when 3,99 is recognized as a low price, maybe the number of people complaining about an app whichs costs less than a burger will decrease.

That really is an excellent idea. I hope this comes to the app store :)


"But what happens when we start talking about bigger projects: something that takes 6 or even 9 man months? That’s either $150K or $225K in development costs with a break even at 215K or 322K units. Unless you have a white hot title, selling 10-15K units a day for a few weeks isn’t going to happen. There’s too much risk."

As a consumer, I yes, it can happen if you have a good app. And sure, as the article says can be done, but there's too much risk. So that's really the argument right? Just too much risk that he/she is willing to take. As a company, if you want to be innovative and make the big bucks, you gotta take a risk.
Ever heard of risk/reward?

"I see customers complaining about how “expensive” a $4.99 app is and that it should cost less. (Do they do the same thing when they walk into Starbucks?) "

Uh, yeah, I complain that Starbucks is too expensive for coffee. Sure, I don't complain to the dude/gal at the counter, I take my business elsewhere where I can get an equally good cup of coffee or in my opinion even better tasting coffee elsewhere (Tim Horton's here in Canada).
To say that we need more expensive apps, I say no we don't. Let the market dictate what your app is worth. If you have a good app, you'll make your money back.
There are some apps that are in the higher tier making the money. Sure, it's bigger developers but they're taking the risk by putting out the money in the first place for all the developers they hire for the quick turnaround time.

Can we benefit from a better system in the app store? Sure we could. But should we encourage higher prices, not in the least (as a consumer of course).
People are going to jump all over Rolando and NFS due to the hype, and people have more than willingly spent $9.99 on other apps. It's the market that dictates it and when there are some decent apps at $.99, then X app at $4.99 which doesn't offer that much more is too expensive.
At the same time, is Warfare Incorporated at $4.99 a better deal than Strategic Assault at $.99. I say yes, no questions asked. It's worth it. Games can be profitable and sell well, if it's something that consumers deem to be of value to them.

Frenzic for example may be a great game, but there is so much competition (there's that word again) that it just may not be worth $4.99 when there are other similar style games that you can buy for $2.99.

End rant.

*Disclosure*
This post was obviously created by a consumer wanting the lowest price possible :)

I agree with you completely

[Galaxius]

The only problem I can see with the AppStore is that the top lists are list over all apps of all price categories. Apple has to create more than the current two categories for apps, to increase the visibility. That's all!

Free
Low (,99 to 3,99)
Mid (4,99 to 8,99)
Premium (9,99 and above)

That would also shift the view on apps a bit, because it would merge different price ranges and also give a range on the quality and content of the apps, especially with the Premium stuff (if it's a good app which a dev feels is premium quality, than just give it a 9,99 price tag or even higher and it will show up as a Premium app in iTunes). And when 3,99 is recognized as a low price, maybe the number of people complaining about an app whichs costs less than a burger will decrease.

That's actually a really good idea!!! I mean it would clutter up the iTunes store page like no other but it would organize it by same price like music, movies, and tv shows so there is consistency. Maybe have an overall top downloads period list too if we're aiming for different lists :P.

[MacTheSpoon]

Even if you broke down apps into three price ranges, wouldn't people still try to game those rankings by pricing their apps at the lowest price within a range?

Personally, the only solution to this that I can think of is to completely remove popularity rankings altogether. Nobody could game the rankings then, and increased visibility would cease to be an incentive for pricing apps lower. What do devs think about that? It would mean that the only way to improve awareness would be the traditional ways - word of mouth, reviews, and advertising.

[razorianfly]

-Heaphestos
-Paulio
-James (BarringtonSoftware)
-SLDROFHLA
-istopmotion

Five people on the petition :)

- Heaphestos
- Paulio
- James (BarringtonSoftware)
- SLDROFHLA
- istopmotion
- Arron (razorianfly)

Six now. :cool:

R-Fly

[Birdsoft]

To say that we need more expensive apps, I say no we don't. Let the market dictate what your app is worth. If you have a good app, you'll make your money back.

This is basically the exact attitude that isnt quite correct thinking. The market is broken and isn't dictating correctly! Apple is dictating by their broken system that prices be driven down, so all that developers are asking for is the 'market' to be fixed. Its not some free market like was taught in economics but a very regulated market that drives sales trends based on very set rules, which are currently not good ones.

So compound the fact that the popular lists work by count only with the fact that Apple also dictates who gets the most prime advertising there is anywhere, and they are reserving MOST of it for the big companies to be featured whether their games deserve it or not.. SO even if you have a good app, you wont necessarily make your money back...Their is just no place left to take marketing RISK that will prove a good reward. So a lot of the programs from the smaller guys that are making their money back are the ones that will game the system. Or that have a few days worth of development so have nothing to cover.

But its great idea to be thrown around by consumers....so for the short term they can keep the prices down. But it will make a mess out of and wreck the market... If they let the current 'market' decide...

I see a big help would be if they had a better "popularity" algorithm in place not just counting total # of apps in a given day, but # of apps with price and how new it is factored in over a set number of days....and I do like the price tier lists idea....