When Apple announced the App Store in July 2008 it revolutionised the software market. Pre-app store, buying software or apps was decidedly uncool. In fact, for most consumers, the only time they’d ever take money out of their pockets to buy software was during the purchase of a computer, and the money in most cases helped line Microsoft’s pockets.
But with the App Store Apple made some important changes. Mainly, it made buying software super easy.
The App Store came bundled on every iPhone, and finding software was only a tap anyway. Once you’d found the software you wanted the process of actually buying it was just as easy. As such, the app store provided a software buying model that gave consumers instant gratification and now, over a few billion apps later, has proven to be a great success.
Another equally important element was the app pricing.
There’s been much discussion about app pricing, and the race towards the $1.19 (US$0.99) price point. In the traditional desktop software market, writing and selling an application for $1.19 is unsustainable. The sheer volume of users doesn’t exist, and developers wouldn’t have the marketing clout to reach them.
The integrated approach that Apple took with the App Store meant that nearly everyone with an iPhone or iPod touch could find apps and buy them easily. Suddenly, from a developer’s perspective your app wasn’t just available to those consumers who knew where to look, but everyone who owned an iPhone; a platform that now has in excess of 80 million users and, by the end of this year, will likely have over 120 million. As an aside, Windows is the only other platform with as many users.
The race to $1.19 hasn’t played out as most analysts expected. Sure, there are many low-priced apps, but for apps that are well written and useful, developers can easily charge anywhere up to $10. There are even cases where popular apps cost more.
Take TomTom, for example. It’s a very expensive app at $99 but it’s good value when compared to buying a physical GPS device for over $300.
With the release of the iPad, we’re seeing iPad-only apps which generally cost more than iPhone ones. Many are free, some are $2.49, many are $5.99, some are $17.99 or more – there’s much more variety in the price.
Developers like the Omnigroup are releasing apps with the equivalent power of their desktop cousins. It would be a missed opportunity to price these at $2.49, when they offer nearly as many features as their desktop counterparts; so OmniGraffle, which is $329.95 for the Mac, is $59.99 for the iPad.
Plus the effort required to develop iPad apps is greater than that for equivalent iPhone apps. The UI leaves more room for interpretation and, with a larger display, developers need to make sure their apps do more.
In the case of some, such as the iWork suite, there is also a level of complexity required in dealing with files; something that is rarely an issue on the iPhone.
As the iPad platform grows and more developers become familiar with the particulars of the iPad SDK, expect app prices to fall, but to stabilise at a higher price than iPhone apps.
This article originally appeared in the May issue of Australian Macworld magazine.