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  • Cheap Apps Stifling Innovation?

    Although Apple has seen 10,000 applications and 300 million downloads in less than four months in its App Store, some are complaining that the lower priced apps are stifling innovation and inhibiting developers.

    Craig Hockenberry, a seasoned developer who created the Frenzic and Twitterrific apps describes this problem well in his open letter to Steve Jobs.

    The main problem is the enormous amount of 99-cent apps or less (see graph), what Hockenberry calls “ringtone apps,” where developers reduce their prices as low as possible so they’ll get favorable placement in iTunes. Hockenberry describes this, “We have a lot of great ideas for iPhone applications. 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.”

    Hockenberry explains that iPhone users complain about the cost of some apps without understanding what that app is really worth and that they should be willing to pay more for higher quality apps. Furthermore, Hockeberry says that Apple’s policies facilitate this.

    Hockenberry says;

    “Our products are a joy to use: as you well know, customers are willing to pay a premium for a quality products. This quality comes at a cost—which we’re willing to incur. The issue is then getting people to see that our $2.99 product really is worth three times the price of a 99¢ piece of crapware.”

    Hockenberry does not propose a solution to this problem but rather just writes to Jobs, ”You and your team are perfectly capable of dealing with it on your own terms.” However, he further warns that this price point problem could prevent development of an app that could do for the iPhone what the spreadsheet did for the Apple II or similarly what desktop publishing did for the Mac.

    What do you all think? Are you willing to pay more for better apps? Or are the 99-cent apps worth their price?

    Source: Trouble in the (99-cent) App Store - Apple 2.0

    A big thanks to “boe_dye” for letting me know about this story!
    This article was originally published in forum thread: Cheap Apps Stifling Innovation? started by AppleChic View original post
    Comments 46 Comments
    1. LGgeek's Avatar
      LGgeek -
      Quote Originally Posted by sziklassy View Post
      This guy does make sense however I don't agree with him wholeheartedly... make an app worth buying and people will buy it. If your apps aren't selling for 10, 20 or god knows how many more dollars, they just aren't worth that much to people..................Ay just a buck most people are willing to take a risk. Something that sounds good but costs 50 bucks (and might not end up so good) isn't worth the risk for as many people.
      at a buck I would give it a shot, if bad app then not out much.
    1. Grassmasta's Avatar
      Grassmasta -
      Quote Originally Posted by helitx View Post
      Conversely, and to counter your point, take a HIGH quality app (at any price) and make it so it is ALWAYS at the bottom of the pile, i.e. last few pages of the AppStore, sales will be abysmal.

      Back in the Palm OS heyday (not all that long ago really) we saw this over and over. Pretty much if we:
      A. Put an app on the home page as "Featured"
      B. Put it in a top spot in an email blast
      C. Put it on the home page of the store that we powered

      It would sell, period, no if, ands or buts. PRODUCT PLACEMENT is king. Granted sales of a crap app will drop if bad reviews are posted but plenty enough will buy before and after that point.

      You are also missing the difference between pricing that drives impulse buys (proven to be $1.49 and under for mobile apps) and those that are priced at a level which gives them much higher perceived value. The argument "I would rather sell 1,000 at than sell 100 at +" do not hold here. You are confusing two different dynamics.
      There is actually a book called the Paradox of Choice by Barry Schwartz that discusses this very phenomenon. The short hand version of this, is that there is so much information to process that it stresses out the mind, leaving people to select from what is most readily offered. I.E. if there are 3 samples of jelly at a grocery store, most people are more than likely going to purchase one of those 3 jellys; unless they have a favorite jelly in mind that they like better. Marketers are very aware of this fact, and companies do it all the time. Its interesting if you pay attention to it, because you can really start to pick out what companies want you to buy; including apple's appstore.

      Its interesting though, because despite that bit of fact; for an individual programmer to write a letter to Lord Jobs, complaining about his lack of app sales, is pretty shameless.
    1. helitx's Avatar
      helitx -
      Quote Originally Posted by Grassmasta View Post
      Its interesting though, because despite that bit of fact; for an individual programmer to write a letter to Lord Jobs, complaining about his lack of app sales, is pretty shameless.
      Good point. One thing to keep in mind is that the products being put "front and center" are not APPLE's products, they are someone elses. Therein lies another dynamic; in other words

      - does the person at apple have a relationship with the developer that is conducive to featuring their product? Think favortism does not come into play? wrong...

      - is there a fee for placement? or other exchange such as pay for advertising with us and we will do this other thing for you.

      - insert other non engineering/computer modeling type decision making process

      Think there are people at Apple who do not get along with developer "X" and thus the products of developer "X" will always be buried, or at least never featured? You bet.... RELATIONSHIPS are uber important.
    1. andypropaganda's Avatar
      andypropaganda -
      I don't know if this guy realizes it, but it's not just on the iPhone that people prefer cheaper apps. It's like this all over the computer world. People do not enjoy paying for software. Why? Because it's not tangible. Whether people admit it or not, they do not enjoy paying for things that they cannot hold or feel. How many people use the "pro" version of peer to peer programs as opposed to the free version? Who doesn't like freeware?

      If you want your programs to sell better then invest in advertising? Advertise your game or app on a site that is devoted to iPhone or Apple news, or even just any mobile device. Something along those lines. You can't just expect a $20 app to sell. Especially the way the economy is right now. People don't have a lot of extra money to spend. I know that I haven't payed more than $2.99 for an app. And that was only once.
    1. BlackWolf's Avatar
      BlackWolf -
      Well, in my opinion the problem is a little different: The problem is that there is not only 99-cent-crapware, but also a lot of $5-crapware. When I see an app that costs more than $3, I get really careful because I bought a lot of expensive apps that turned out to be aweful - crashing all the time, running really slow, stuff like that. I guess if you really create quality apps they will rise in the appstore - if you sell them for a reasonable price.

      Considering that I get "real" pc- or macgames for about $30-40, I will never pay $20 for an iphone app. As cool as iphone games are - they are always mobile games, no pc games.
    1. EGutierrez91's Avatar
      EGutierrez91 -
      I usually try out applications before purchasing the full version. If a company offers a Lite/Free version, and I'm more than happy with it, I'm willing to pay the full price.

      Saying $0.99 apps are stifling innovation is a bit harsh, since some apps are extremely useful and/or fun.