4 ms·

Engadget: iPad app prices are out of control and will kill us all

23 points by tjakab 17y ago

josh33 17y ago
It's easier for developers to start high and adjust prices lower over time to increase sales. The article says $4.99 seems to be the iPad defacto app price for many apps. If that's high, people won't buy. Or other developers will come in and produce cheaper apps. As a side note, the article does mention the hope that Apple eventually releases some type of trial functionality.
protomyth 17y ago
18 apps for $95.88 doesn't really sound that greedy. How much are 18 lattes at Starbucks?
- potatolicious 17y ago
  This speaks to the quality of apps in the App Store though - sadly, there is a truth in the middle ground between the two viewpoints: - Genuinely useful apps are worth well in excess of $0.99. - iPhone consumers have been spoiled rotten by hyper-competition and the market of $0.99-no-matter-what. - There's a lot of utter shit on the App Store that isn't worth the $0.99 people are charging for it. The App Store signal to noise ratio is atrocious, and consumers have responded in their attitude towards app pricing. Bad apps are so plentiful (and have the same level of exposure as the good apps) that everything over $0.99 is a risk to the consumer for getting burned. Most apps are things that you'd start once, get bored with in 5 minutes, and never touch again, and provide little to no lasting use to the consumer whatsoever - it's not a surprise that consumers are tuned to paying $1 for such things.
  - rmc 17y ago
    But 90% of anything is crap (http://en.wikipedia.org/wiki/Sturgeons_Law http://en.wikipedia.org/wiki/Sturgeons_Law Sturgeon's Law). 90% of the internet is crap, etc.
    - potatolicious 17y ago
      We have very good ways around this crap - Google, for example, will not surface this crap (well, it does sometimes), and the networked/social nature of the modern web is intrinsically some kind of quality filter (or at least, relevance filter). If some guy creates a crappy website full of information nobody wants, it will never get visited. If some guy creates a crappy iPhone app, it gets a disproportionate amount of exposure compared to good apps people actually want to use. The problem here is the with only a single portal that serves as both sales and marketing, the wheat mixes with the chaff and you don't know which way is up.
credo 17y ago
The writer seems to think that an app shouldn't be priced higher than $0.99 unless it is a life-changer. I'm guessing that this stems from his mistaken belief that "Developers could make millions with a well designed, useful, or entertaining app" I wonder if every $4 he spends on other things is a life-changer for him :)
cscotta 17y ago
Interesting - yesterday morning, I found myself suggesting the opposite: http://twitter.com/cscotta/status/11604836074 http://twitter.com/cscotta/status/11604836074 I'd counter that this emerging pricing structure suggests developers are finally charging fair prices for their software, and that this is a good thing. I don't mean to be a curmudgeon, but I'd suggest that the move towards "free/freemium" across the web has helped to breed a sense of entitlement in users while devaluing the work of interface design and software development. To see a user buy an app for 99¢ on which a dev team spent months, then pan it with a one-star review complaining that it doesn't have a feature s/he dreamed up is ludicrous. Geometry Wars from Activision is $9.99. After watching a demo on YouTube and finding it as good as (or better than) the Xbox version, I snapped it up and couldn't be happier. I'm glad to see that developers are charging what their worth. This is good for software, and good for users.
- wmf 17y ago
  Yeah, I don't understand the complaints about $10 iPad games; an indie PC game is $20 and a "AAA" PC game is $50.
  - patio11 17y ago
    For these customers, an indie PC game is $0, an AAA PC game is $0, a song is $0, a movie is $0, and you want TEN FREAKING DOLLARS for your iPad app.
- roc 17y ago
  The complaints stem largely from the fact that most of the available apps are not nearly as good as Geometry Wars. A $10 precedent isn't bad. A precedent of $10 for apps of that average quality level is bad.
gte910h 17y ago
I counsel people to consider $15-45 per app. You need a lot fewer buyers at that point to pay for your development. Remember, the reason apple can sell iWork at $20 is because they get money off of every sale of the ipad
- collision 17y ago
  $30, actually -- Pages, Numbers and Keynote are all $10 each.
benofsky 17y ago
I've always thought iPhone apps have become too cheap and are grossly underpriced. iPad apps will take longer and require more skill to make, they should be more expensive. and at an average price of ~$5, that's not much at all. I wish iPad app prices would stay at this level but they will almost certainly become diluted down to the iPhone levels (remember a year ago iPhone apps were ~$5).
- barlo 17y ago
  For some reason, many people tend to greatly undervalue their time and effort. I have a couple of apps in the AppStore. All of the apps that I've made were initially solely intended for my use, but I usually end up throwing them on the AppStore, mostly for the fun of it. One of them is a extremely simple app I literally put together in about four hours; when I put it on the AppStore I priced it at 99 cents just to see what would happen. Surprisingly (for such a simple app), I was getting a steady 5-10 sales a day. A couple of weeks later, I jacked the price up to $3.99 just to see what would happen. For the first week at $3.99, I actually had between 15-20 sales a day. Since then, my sales have never dropped below 8 sales per day. By increasing my price, I actually had a net increase in both quantity sold and revenue. As with most products, higher priced goods are perceived as having more value than their lower-priced counterparts - even in the AppStore.
  - benofsky 17y ago
    Wow, that's really interesting. I can definitely see how that would work though, most of the 99c stuff on the app store is utter crap, I tend to just mentally skip over it. :-)
    - barlo 17y ago
      Have you seen the article about the game that was initially launched at 99c and then progressively increased to $350? It's really the best example I've seen about how bad the pricing in the AppStore has really become. I'm not sure that this is the original source, but its Google's first result: http://www.gamasutra.com/view/news/27628/GDC_Refenes__Saltsmans_Baffling_350_App_Store_Success.php http://www.gamasutra.com/view/news/27628/GDC_Refenes__Saltsm...
jacoblyles 17y ago
Maybe this is because iPad apps are viewed as "real" software and iPhone apps are "toy" software, due to the screen size differential.
ComputerGuru 17y ago
Why do they expect iPad app prices to be cheaper than MacBook app prices?
smackfu 17y ago
Prices also set expectations. If you pay $1 or $2 for an app and it's no good, you get on with your life. If you pay $15 or $20 and it's buggy or doesn't work, you complain in every forum about what a rip-off it was and write a one-star review. More expensive apps also require more energy to market them. Three screenshots in the app store don't cut it. You need a proper website, and a screencast video, and such.
- eelco 17y ago
  It's a delicate balance, actually. If you price your apps too cheap, people with no real interest will buy them, run it once, uninstall it and give it one star.
davidedicillo 17y ago
I'm glad to see prices raise a bit. People don't understand how much work we put into applications.
- patio11 17y ago
  The amount of work we put into applications has absolutely nothing to do with what we can charge for them. Don't mention it around customers because it doesn't motivate them and don't mention it around developers because it causes them to consistently underprice. Honorable Call of Warslaying Online had five hundred man years invested into it and costs $60. Bingo Card Creator has, hmm, maybe 0.5 man years and costs $30. Charge based on value, not based on cost, or you risk auto-commoditizing your offering and locking yourself into a business which does not outscale the day job but has no stability or benefits.
ryanhuff 17y ago
The higher average prices (relative to the iphone) are simply a reflection of the more limited population of apps released on day one. Once independent developers get their hands on physical devices, and more applications are released, we'll see average app prices drop.
hexis 17y ago
Personally, I expect iPad apps to be cheaper than iPhone apps over time. I expect more iPad apps to be ad-supported, due to the larger screen size. It's not the direction I'd like things to be going in, but my experience with the web makes me think that zero tends to be the winning price if it's possible.
elblanco 17y ago
Two possible things will happen. 1) Prices on the apps will drop. 2) The complexity of the apps will increase until they have the perceived value of what the purchaser wants.
dgallagher 17y ago
There's a lot of "testing the waters" going on now with iPad app pricing. It'll take several months before pricing models settle. We saw this when iPhone os 2.0 came out. Lots of $5 and $10 games. As more competing apps became available, and the number of iPhone users increased, prices came down. This took months to play out, and it'll probably be similar with the iPad. Right now I don't see many people buying a $4.99 issue of Time for their iPad when you can subscribe to the paper edition and get 56 issues delivered to your door for $20. Yes there is a convenience component to the digital version, but a 1,400% markup in price isn't going to fly in the long run. Lots of experimental pricing like this will be going on for a little while. Early adopters will jump and spend money on content like this to show off and learn about their new device. But that'll dry up after a bit. It's always easier to lower prices than to raise them. So it makes sense stuff will start off high. By late summer or maybe even by fall we'll have a better clue regarding iPad pricing models. More people will own them by then, and there will be more content available, competing for business, driving down prices.

23 points by tjakab 17y ago

It's easier for developers to start high and adjust prices lower over time to increase sales. The article says $4.99 seems to be the iPad defacto app price for many apps. If that's high, people won't buy. Or other developers will come in and produce cheaper apps. As a side note, the article does mention the hope that Apple eventually releases some type of trial functionality.

protomyth 17y ago

18 apps for $95.88 doesn't really sound that greedy. How much are 18 lattes at Starbucks?

potatolicious 17y ago
This speaks to the quality of apps in the App Store though - sadly, there is a truth in the middle ground between the two viewpoints: - Genuinely useful apps are worth well in excess of $0.99. - iPhone consumers have been spoiled rotten by hyper-competition and the market of $0.99-no-matter-what. - There's a lot of utter shit on the App Store that isn't worth the $0.99 people are charging for it. The App Store signal to noise ratio is atrocious, and consumers have responded in their attitude towards app pricing. Bad apps are so plentiful (and have the same level of exposure as the good apps) that everything over $0.99 is a risk to the consumer for getting burned. Most apps are things that you'd start once, get bored with in 5 minutes, and never touch again, and provide little to no lasting use to the consumer whatsoever - it's not a surprise that consumers are tuned to paying $1 for such things.
- rmc 17y ago
  But 90% of anything is crap (http://en.wikipedia.org/wiki/Sturgeons_Law http://en.wikipedia.org/wiki/Sturgeons_Law Sturgeon's Law). 90% of the internet is crap, etc.
  - potatolicious 17y ago
    We have very good ways around this crap - Google, for example, will not surface this crap (well, it does sometimes), and the networked/social nature of the modern web is intrinsically some kind of quality filter (or at least, relevance filter). If some guy creates a crappy website full of information nobody wants, it will never get visited. If some guy creates a crappy iPhone app, it gets a disproportionate amount of exposure compared to good apps people actually want to use. The problem here is the with only a single portal that serves as both sales and marketing, the wheat mixes with the chaff and you don't know which way is up.

credo 17y ago

The writer seems to think that an app shouldn't be priced higher than $0.99 unless it is a life-changer. I'm guessing that this stems from his mistaken belief that "Developers could make millions with a well designed, useful, or entertaining app" I wonder if every $4 he spends on other things is a life-changer for him :)

cscotta 17y ago

Interesting - yesterday morning, I found myself suggesting the opposite: http://twitter.com/cscotta/status/11604836074 http://twitter.com/cscotta/status/11604836074 I'd counter that this emerging pricing structure suggests developers are finally charging fair prices for their software, and that this is a good thing. I don't mean to be a curmudgeon, but I'd suggest that the move towards "free/freemium" across the web has helped to breed a sense of entitlement in users while devaluing the work of interface design and software development. To see a user buy an app for 99¢ on which a dev team spent months, then pan it with a one-star review complaining that it doesn't have a feature s/he dreamed up is ludicrous. Geometry Wars from Activision is $9.99. After watching a demo on YouTube and finding it as good as (or better than) the Xbox version, I snapped it up and couldn't be happier. I'm glad to see that developers are charging what their worth. This is good for software, and good for users.

wmf 17y ago
Yeah, I don't understand the complaints about $10 iPad games; an indie PC game is $20 and a "AAA" PC game is $50.
- patio11 17y ago
  For these customers, an indie PC game is $0, an AAA PC game is $0, a song is $0, a movie is $0, and you want TEN FREAKING DOLLARS for your iPad app.
roc 17y ago
The complaints stem largely from the fact that most of the available apps are not nearly as good as Geometry Wars. A $10 precedent isn't bad. A precedent of $10 for apps of that average quality level is bad.

gte910h 17y ago

I counsel people to consider $15-45 per app. You need a lot fewer buyers at that point to pay for your development. Remember, the reason apple can sell iWork at $20 is because they get money off of every sale of the ipad

collision 17y ago
$30, actually -- Pages, Numbers and Keynote are all $10 each.

benofsky 17y ago

I've always thought iPhone apps have become too cheap and are grossly underpriced. iPad apps will take longer and require more skill to make, they should be more expensive. and at an average price of ~$5, that's not much at all. I wish iPad app prices would stay at this level but they will almost certainly become diluted down to the iPhone levels (remember a year ago iPhone apps were ~$5).

barlo 17y ago
For some reason, many people tend to greatly undervalue their time and effort. I have a couple of apps in the AppStore. All of the apps that I've made were initially solely intended for my use, but I usually end up throwing them on the AppStore, mostly for the fun of it. One of them is a extremely simple app I literally put together in about four hours; when I put it on the AppStore I priced it at 99 cents just to see what would happen. Surprisingly (for such a simple app), I was getting a steady 5-10 sales a day. A couple of weeks later, I jacked the price up to $3.99 just to see what would happen. For the first week at $3.99, I actually had between 15-20 sales a day. Since then, my sales have never dropped below 8 sales per day. By increasing my price, I actually had a net increase in both quantity sold and revenue. As with most products, higher priced goods are perceived as having more value than their lower-priced counterparts - even in the AppStore.
- benofsky 17y ago
  Wow, that's really interesting. I can definitely see how that would work though, most of the 99c stuff on the app store is utter crap, I tend to just mentally skip over it. :-)
  - barlo 17y ago
    Have you seen the article about the game that was initially launched at 99c and then progressively increased to $350? It's really the best example I've seen about how bad the pricing in the AppStore has really become. I'm not sure that this is the original source, but its Google's first result: http://www.gamasutra.com/view/news/27628/GDC_Refenes__Saltsmans_Baffling_350_App_Store_Success.php http://www.gamasutra.com/view/news/27628/GDC_Refenes__Saltsm...

jacoblyles 17y ago

Maybe this is because iPad apps are viewed as "real" software and iPhone apps are "toy" software, due to the screen size differential.

ComputerGuru 17y ago

Why do they expect iPad app prices to be cheaper than MacBook app prices?

smackfu 17y ago

Prices also set expectations. If you pay $1 or $2 for an app and it's no good, you get on with your life. If you pay $15 or $20 and it's buggy or doesn't work, you complain in every forum about what a rip-off it was and write a one-star review. More expensive apps also require more energy to market them. Three screenshots in the app store don't cut it. You need a proper website, and a screencast video, and such.

eelco 17y ago
It's a delicate balance, actually. If you price your apps too cheap, people with no real interest will buy them, run it once, uninstall it and give it one star.

davidedicillo 17y ago

I'm glad to see prices raise a bit. People don't understand how much work we put into applications.

patio11 17y ago
The amount of work we put into applications has absolutely nothing to do with what we can charge for them. Don't mention it around customers because it doesn't motivate them and don't mention it around developers because it causes them to consistently underprice. Honorable Call of Warslaying Online had five hundred man years invested into it and costs $60. Bingo Card Creator has, hmm, maybe 0.5 man years and costs $30. Charge based on value, not based on cost, or you risk auto-commoditizing your offering and locking yourself into a business which does not outscale the day job but has no stability or benefits.

ryanhuff 17y ago

The higher average prices (relative to the iphone) are simply a reflection of the more limited population of apps released on day one. Once independent developers get their hands on physical devices, and more applications are released, we'll see average app prices drop.

hexis 17y ago

Personally, I expect iPad apps to be cheaper than iPhone apps over time. I expect more iPad apps to be ad-supported, due to the larger screen size. It's not the direction I'd like things to be going in, but my experience with the web makes me think that zero tends to be the winning price if it's possible.

elblanco 17y ago

Two possible things will happen. 1) Prices on the apps will drop. 2) The complexity of the apps will increase until they have the perceived value of what the purchaser wants.

dgallagher 17y ago

There's a lot of "testing the waters" going on now with iPad app pricing. It'll take several months before pricing models settle. We saw this when iPhone os 2.0 came out. Lots of $5 and $10 games. As more competing apps became available, and the number of iPhone users increased, prices came down. This took months to play out, and it'll probably be similar with the iPad. Right now I don't see many people buying a $4.99 issue of Time for their iPad when you can subscribe to the paper edition and get 56 issues delivered to your door for $20. Yes there is a convenience component to the digital version, but a 1,400% markup in price isn't going to fly in the long run. Lots of experimental pricing like this will be going on for a little while. Early adopters will jump and spend money on content like this to show off and learn about their new device. But that'll dry up after a bit. It's always easier to lower prices than to raise them. So it makes sense stuff will start off high. By late summer or maybe even by fall we'll have a better clue regarding iPad pricing models. More people will own them by then, and there will be more content available, competing for business, driving down prices.