14 ms·

Apple has damaged the perceived value of software

211 points by prawn 10y ago

tehabe 10y ago
I think the only real problem is, that you can't distribute paid upgrades.
scientific_ass 10y ago
>Make exactly one sale of an app per person, ever, regardless of the number of devices they own, how often the app has been updated since they last used it, and so on. This also teaches customers that they’re entitled to come back to a free app at any point in the future, no matter how long ago they paid for it. And >Ideally, make exactly one sale of an app per family. This reinforces the commodification of software; it’s to be shared around. From a consumer perspective, I whole heartedly agree with author. I own 3 devices, 1 is android and other 2 are Iphones. I never noticed how damaging this could be for developers to have their work sold for the price of one when most of the people use them on multiple devices. Update part also makes sense, an application built 3 years ago has come a long way since then and have taken thousands of work hours for maintainance and updates.
- empressplay 10y ago
  You aren't selling an app though, you're buying a customer.
- cLeEOGPw 10y ago
  Why should I pay twice for your app? If an app is IP, then I bought it and am supposed to use it where I want. If you charge for devices separately, means you are not selling IP, you are selling bits, of which there is infinite supply. At the point you sold an app second time to the user, he realizes that the app is just bits that he can copy himself for free.
- nervositee 10y ago
  But as a consumer, what the heck am I buying? I'm not buying a physical product, I'm buying a sequence of 0 and 1. It's a license to use said app. It's not the 90's anymore where you own a CD with your program and that is your product. I cannot re-sell the "used app" when I don't use it anymore. So if I buy the 'license' to use your app, I'm gonna be real effin pissed if I can't use it on all my devices. Actually tying your purchase to your Apple ID is much better for the dev, because only YOU can use it. A CD with software is much easier to share with your friends.
  - xixi77 10y ago
    Exactly: people are complaining about technology because it gives consumer an option to have a copy on multiple devices, but at the same time they are just taking the things that the same technology gives them, such as preventing people from reselling their copies, as some kind of a God-given right.
detaro 10y ago
Alternative candidate: Google and the model of ad-based software
- darrmit 10y ago
  Agreed. I think this has been more damaging than anything. Most people just have no idea what they're giving up in exchange for the free software/service, and when they find out, it's too hidden for them to care.
  - eeZah7Ux 10y ago
    If anything, apps are even more invasive than webapps when it comes to snatching your data, tracking you or displaying ads. (And I'm not defending google)
deleted 10y ago
[deleted]
hvs 10y ago
I think the "1 purchase, multiple devices" is fair in the sense that I'm only using one device at a time. Also, if I upgrade my phone, why should I have to buy your app again? That said, the lack of a paid upgrade option in the App Store is a significant negative. To pretend that a one-time purchase for $5 should guarantee you a lifetime of upgrades is both shortsighted and abusive to developers.
- dismantlethesun 10y ago
  It's not really that terrible. Everyone can just use the Microsoft Approach and date-name their software. Buying Office 2015 only gets you that version. If you want Office 2017, it's not an 'update' per se unless they generously offer it to you, but rather an entirely new piece of software.
  - andmarios 10y ago
    If you do that in the app store (ios or android), prepare to get thousands of 1-star reviews for your old version from people who believe they are entitled to updates for their lifetime. I've seen it upfront two times in the playstore, where apps I liked released a new version. I was eager to buy the new version but the new/updated reviews for the old ones were ruthless. One app had to give the new version for free. The other had to promise to keep updating the old version too. The first team just gave up on both apps. The second team (one developer actually) continued but slowly toned down his efforts, going into essentially maintenance mode.
    - dismantlethesun 10y ago
      Can't you take down the old app? Maybe previous owners can continue to use and download it but new customers won't be able to find it in the search.
      - deleted 10y ago
        [deleted]
    - 10y ago
yen223 10y ago
I would posit that "free" but ad-driven sites did far more harm than Apple ever could. If anything, I think it's pretty impressive how Apple made paying for apps a viable thing, back in the days of rampant Internet piracy.
- twoodfin 10y ago
  Exactly: The problem for small software developers isn't Apple, it's that the logical price for the far-and-away biggest app makers (Google, Facebook, Snap) to charge is $0. Customers naturally fix their expectations from the apps they use every day.
jamesrcole 10y ago
Why are low prices Apple's fault? If it's their fault, what did they do to push things in that direction? What could they have done to have pushed things in the other direction? I'm willing to listen to honest attempts to answer those questions.
- msh 10y ago
  Its hard to charge prices when apple don't allow trial versions.
  - jamesrcole 10y ago
    They might not have an explicit mechanism for trial versions, but people do make either a free version of their app, or make their app free and have IAP to purchase the full version.
  - criddell 10y ago
    I don't think that's as big of a problem as many people do. I've played games where the first level is free and if you like the game, you buy more levels. I've tried productivity applications where the free version limits some quantitative aspect - like task managers that allow 3 projects.
mcv 10y ago
I wonder if Steam isn't doing something similar. Prices are higher there, but I almost never pay full price for a Steam game, and I get the game for all platforms at once.
- samtho 10y ago
  I would argue they are not. The cost of getting a game to steam is significantly higher than getting an app to a marketplace (Apple, Android, etc) and are meant to last for a much shorter span of time. As others have stated, the cost for making copies if effectively zero. The race is not to the bottom (as there are too many specialized games for different niches) rather, it's a race for content production.
  - mcv 10y ago
    Is that so different from the app store? Why would Steam games be meant to last for a shorter time than mobile apps? Most mobile games tire pretty quickly, whereas some of the games on Steam have enormous statying power.
sosodaft 10y ago
This is why the only startups I'll work for are B2B. Trying to sell an "app" to the masses? Uber is losing money and they're a household name, good luck with your Tinder for dogs or whatever.
- nol13 10y ago
  well it's like tinder for dogs, but for cats!
- icebraining 10y ago
  Uber is a taxi company, their business model has very little in common with your average app-selling startup.
matt4077 10y ago
Oh come on... Apple single-handedly revived the software-for-consumers business model with the App Store. Before, people bought a PC with an OEM license for Office and got their son to install a pirated version of Photoshop. There was essentially no market for consumer software outside of games.
- rantanplan 10y ago
  Revived as in what? Make people believe that 1 million of fart apps is worth paying for? How much value do you put on apps that superimpose dog ears on people in real time video/camera? How many apps have you downloaded and how many are actually useful to you?
  - matt4077 10y ago
    You're kinda proving my point.
    - rantanplan 10y ago
      Yeah, I probably misinterpreted what point you were trying to make.
  - mwfunk 10y ago
    It's hardly Apple's fault that people aren't willing to pay big money for fart apps. If you want to put a $10 fart app out there, it's not like anyone's stopping you from doing it. Speaking for myself at least, I've purchased quite a few mobile apps over the years. If I need an app in a certain category, I will always get one that costs money over one that's free with ads. I'm sure I'm in the minority, but people like me don't have to be the majority for someone to make money from an app. The only thing that matters is the number of people like me out there, not the percentage of total users we represent. I do think there's much room for improvement of course. I wish they would do stuff like allow people to offer paid upgrades. But claiming that there are literally no good paid apps is just silly.
    - 10y ago
onion2k 10y ago
Apple's number one key, most important reason for their rules about apps is simple - they prioritise whatever keeps users buying a new iPhones every 2 years. Multiple iterations of what is ostensibly the same app with small feature additions isn't going to do that - users don't need a new phone to run something with some extra levels or a new admin screen. Apple need to keep the content in the app store looking like new things that take advantage of new phone features. Brands are great, so new versions of games that use existing IP are welcomed, but new minor versions of previous apps are not. If you want to build and release small, incremental iterations of an application instead of major updated versions of an application then don't write software for iPhones.
cdevs 10y ago
I agree with the problem but Wouldn't this be more because the indie market is fighting the larger businesses for prices until the final lowest price step to compete for buyers was a .99 cent app or in app purchase or ads. If App Store kept indies out we would have had 9.99 Microsoft word style apps everywhere. It sucks now for a single dev who can't market a app for $30,000 dollars that only makes $8,000. It almost mimics the American economy where the top %1 wins, sometimes you hear of a lower class citizen making it and then everyone thinks they can make it.
- bo1024 10y ago
  I think your point relates to the discoverability problem the author mentioned. People mostly find or learn about apps through the App Store. So apps that get to the top of search results can get millions of downloads while similar but unlucky apps get almost nothing.
  - wayn3 10y ago
    Its almost like you have to learn some marketing to sell stuff(?)
  - w0utert 10y ago
    Better app discovery could help a lot: even if 90% of your potential customers are unwilling to spend more than $0.00 for apps, that still leaves literally millions who would consider buying if they were only able to find it. It's not an easy thing to solve though, I think the promotion and discovery model should be changed fundamentally. First of all ratings and 'most popular' should be completely eliminated from the equation, because they are self-fullfilling and relatively easy to manipulate. I would like to see some form of syndication for apps, which suggests me apps that fit my preferences and use cases, which could (and likely is) vastly different from other people. For example, I would love to be able to find (by whatever means possible) more developer-oriented apps (either on desktop or mobile) for things I don't even know I could use. The current app store model provides basically zero opportunities for this, I can go to the 'developer section' in the app store and look at the top 25 apps but there my options to discover apps stops. There really is no way for niche apps that could find a decent number of paid customers to promote themselves. Besides better app discovery, trial versions are really essential. I would like some kind of subscription service that lets me try literally every app I want, but only for one month after which I would have to buy it at the regular price. Yet another idea could be to allow developers to join forces and bundle their apps, dividing the profits through some kind of agreed-on distribution. This way low-volume/high-margin apps that would be hard to sell in large numbers as standalone could piggyback on high-volume/low-margin apps. Plenty of possible improvements.. At any rate I feel something needs to change, because the current situation is hurting creativity and decreasing the quality and value of many app categories.
georgespencer 10y ago
> Target the largest customer base, so they get 30% of the biggest potential income. That means selling at a low price, because most customers will only pay low prices, and all customers prefer low prices. This teaches customers that software’s average value is low. Can someone explain to me this logic? It seems faulty. Put it this way: if it were somehow possible to make more money as a developer in the App store, how would removing Apple's 30% cut make it more feasible? Apple and developers have a shared incentive to make as much money as possible, but developers control pricing and who they target. Apple is just along for the ride. > Build a universal app (iPhone and iPad versions, in the same package) to increase the attractiveness and convenience of owning multiple iOS devices. You’ll earn a “+” in your app’s buy-button on the Store. This teaches customers that supporting multiple devices isn’t something to pay extra for. This is better, and fairer, than the alternative. My iPad and my iPhone run the same operating system. Why should I pay twice for the same functionality across both of them? If Apple didn't do this people would be writing articles lamenting the fact that they want to make their 30% cut twice. > Also include an Apple Watch version within the iPhone app. As above. I would be happy to pay to unlock Apple Watch functionality in apps. I'm not sure that Apple prevents that from happening. But I agree with the author here provided the extra functionality is not simply "notifications" but something meaningful and unique to the watch's hardware. > Provide regular updates, at no cost; so much so that there’s no mechanism for paid upgrades at all. This teaches customers that they should expect free upgrades for life, no matter how little they paid for the software initially. There is a mechanism for a paid update, which is to simply state end of life for an app and release a new one (a la Tweetbot). Another way of looking at this is: Apple is encouraging developers to release new apps at full price once they feel that they have something new to launch, OR to use subscription pricing or quasi subscription pricing like Marco does with Overcast. > Make exactly one sale of an app per person, ever, regardless of the number of devices they own, how often the app has been updated since they last used it, and so on. This also teaches customers that they’re entitled to come back to a free app at any point in the future, no matter how long ago they paid for it. That seems fair to me as a consumer. If I bought something a year ago and want to re-install it, why shouldn't I? Wouldn't it seem unfair to not be able to use something I paid for? > Ideally, make exactly one sale of an app per family. This reinforces the commodification of software; it’s to be shared around. "Ideally" = Apple does not enforce this. > Sell only through their store, with their distribution mechanism, their product page design and user flow, and their 30% cut — which doesn’t provide for marketing or discovery of any kind beyond searchability, and the very small chance of being featured in some way. The majority of customers probably have no idea that the price they pay for an app is almost 43% higher than the amount the developer will receive, before tax (i.e. that Apple takes 30% off the top). Which has done more for the security and quality of the software which is available to consumers. (And that's also a reason affluent middle class folks flock to iOS.) And Apple allows search marketing and of course doesn't stop developers from marketing in Google, Bing, on TV, etc. which is where the majority of installs are driven for most app-centric startups I know.
lazyjones 10y ago
I'm not sure that Apple's environment is hostile towards sustainability of small software businesses like the author claims. Sure, prices are low, but the market is huge and it's extremely easy to sell large numbers if the app is worth anything. To put it differently: how well would a small software business that is struggling under these conditions have fared 25-30 years ago when you had to advertise in print magazines and carry the disks to the post office for every customer (and every update!)? The fact that there is more competition now, isn't exactly Apple's fault either.
- visarga 10y ago
  In the past, there was very limited ad space in tech magazines, so, inevitably, fewer softwares were known and money focused on those that remained. Today apps are competing with millions of other apps directly in the app store, anything you want it's been done and released free / with ads, so it's a whole different kind of difficult, probably more difficult than in the past.
- greybox 10y ago
  I think the problem is more that the consumer now expects to be able to download pretty much everything for free and for the developer to make money in some other way. E.G F2P games
- doctorwho 10y ago
  I started writing shareware in 8o's and even then there were alternative "marketing" and distribution methods to print, like BBSes, SIMTEL20 (and other FTP archives), usenet, user groups, shareware CD's and sharing among friends. It worked pretty well actually. There was abuse of course and it started a whole anti-piracy industry. Protection techniques cost a lot to create and maintain and they didn't really solve the problem. SaaS is so popular today because it practically eliminates piracy. Developers get paid for what they build or they go broke because nobody wants what they've built.
Eridrus 10y ago
I don't think this is Apple's fault as much as the reality of competition. The reason apps are so cheap is because there are so many substitutes. Apple may be highlighting those who support multiple platforms, but its not telling anyone what to charge. Musicians complain about the same thing as music gets cheaper and remains somewhat fungible. It's no one's fault, it's just the reality of competition in an industry with zero marginal cost.
- cousin_it 10y ago
  This x100. The problem has nothing to do with Apple. Writers, painters and musicians have been faced with the same kind of market for a while, though there's no centralized middleman. Video game developers are headed that way as well. When distribution is easy, "little guys" overrun the market and drive the average success level to zero. Ironically the one thing that might help is centralized gatekeeping with strict quality control. But that's not as profitable for the gatekeeper as the alternative, so I guess it makes sense for the gatekeeper to be a non-profit entity that can enforce rules, like a union or guild. I wonder when the world will realize that.
  - pdkl95 10y ago
    s/centralized gatekeeping/curation service/ Yes, it won't be as profitable as a walled garden, and it will live or die by their reputation. When the market races to the bottom, quality suffers and the risk of scams/etc increases. Eventually, this creates a market of people who don't want to risk buying a lemon. A store that carefully curated what they offer and/or offers additional guarantees about safety/quality/etc is a model that has been successful in the past.
    - Eridrus 10y ago
      I don't think lemons are a real concern in digital economies where marginal costs are zero, so it costs you nothing other than a lost sale to offer a refund. Not sure about Apple's store, but you can get a refund without too much difficulty on Steam of the Play store. Discoverability is a real concern though.
darrmit 10y ago
Was (consumer) software ever perceived as that valuable, though? Most everyone I know is completely unwilling to buy an app or subscription. Even some technical people I know just refuse to spend money on software or services. It's not something I understand or agree with, just something I've noticed. It may be a more regional thing, too, here in the rural southeast.
- chrisp_dc 10y ago
  I don't think consumer software has been that valuable in my lifetime. MS Office, & Turbo Tax are killer apps that people pay for. People willingly pay for online games too. Other than that? I guess some people buy apps. I don't think it's regional. I've never bought an app. I paid for some dev tools, but that's it. Selling productivity outside of people's work is an uphill battle.
deleted 10y ago
[deleted]
spcelzrd 10y ago
As a developer, I use a lot of open source. But I haven't paid for a desktop application in years. The web, with it's promise of a free browser and free web applications, has done as much to destroy the perceived value of software.
- eeZah7Ux 10y ago
  You are confusing value with price. Breathable air is free of charge (so far) and people value breathing. Similarly, pro bono work does not cheapen the value of a lawyer work. Working for $1 per hour does.
- BlackFly 10y ago
  I've paid for IntelliJ and Maple. Yeah, my company would pay for IntelliJ, but I prefer to install it at home and work on my own projects and occasionally change jobs. I am paying for the updates is how I see it. As long as people keep paying, they ought to keep working on it. The minute that stops seeming to be true, I will probably switch to other products.
- orkoden 10y ago
  Free web applications and free FLOSS have lead to people not valuing software you are right. If there is much good software and services available for free, why should I pay? As a developer I have bought many pieces of software to make my work easier: Git Tower, Kaleidoscope, PaintCode, Dash, Reveal, Charles, Acorn, Paw, are what come to mind right now. I perceive all of these tools' value to be high.
jamespo 10y ago
This is partly why a lot of older IOS apps I bought (such as the excellent Mr Reader) have been abandoned by their developers I suspect, as even basic maintenance isn't worth the revenue stream. And these apps will soon be incompatible with the forthcoming 64-bit switch.
drchiu 10y ago
How about Google when it comes to web apps? Gmail and Google Docs come to mind. Reality is all the big internet corps have been doing this for a long time. Then there are those of us who develop fremiums which further reinforce this behaviour. Now we price our products north of 100/month to try and weed out the non ideal customer.
- Androider 10y ago
  Google offers Gmail and Docs for free to consumers, in order to hook businesses into using it (and mining the consumer's data, of course). And it's working great, they announced a while back that over 3 million businesses are now signed up for the commercial G Suite [0], paying $5- $10 per employee/month in perpetuity (I personally consider the G Suite fantastic value as a business owner). [0] https://thenextweb.com/insider/2017/01/27/google-just-passed-3m-businesses-paying-for-g-suite https://thenextweb.com/insider/2017/01/27/google-just-passed...
  - pythonaut_16 10y ago
    G Suite absolutely destroys Office 365 at the web experience. Gmail is far superior to Outlook online, and all of the Google Docs/drive online experience is extremely well integrated, fast, and intuitive compared to Office 365. Microsoft wins hands down at the desktop experience though. If you have big or complicated documents and spreadsheets you can't beat Office. For me personally, G Suite wins because by the time I need Word or Excel I'm going to reach for a full powered solution like Latex or Python.
- stupidcar 10y ago
  Yeah, both Google and Apple have contributed to the commoditisation of consumer software. But I don't think it was a strategy designed to screw over independent developers though. It was designed to stop Microsoft. Microsoft's 90s dominance was achieved by commoditising PC hardware, owning the OS market and the most profitable parts of the software market, and locking in the rest of the software market to their OS. Apple and Google looked at this and decided that, rather than try to beat MS at their own game, they were going to change the rules to favour their own strengths. In Apple's case, that's hardware. In Google's case, that's web services and advertising. Apple's strategy was to decommoditise hardware by making their products premium, desirable objects. Meanwhile, they gave their OS and its upgrades away for free, so decreasing the perceived value of Windows. Then they built a software market on top of their OS, one even more locked-down than in the old Windows model. Google's strategy was initially to make the OS irrelevant by building the web into an alternative application platform. Then, when mobile arrived, they gave away Android for free in order to both encourage commoditisation of mobile hardware (discouraging Apple/iPhone dominance) and lower the perceived value of OS (harming MS/Windows).
Aaargh20318 10y ago
I'd argue that the perceived value of software is correct. As with all IP, once created the value of a copy is pretty much zero. It's a simple case of supply and demand, the supply is infinite so logically the price is zero. The problem is not selling software (or songs, or movies or any other IP really) for too little, the problem is billing for something that is not scarce. People intuitively understand that scarce things have value and that the value depends on how scarce it is. This is why selling things for which there is an unlimited supply is an uphill battle. Look at it like this: if you hire a plumber to install a toilet in your home, would you accept it if the toilet was 'free' but you had to pay a fee for every usage ? Hell no. But you'll gladly pay the plumbers hourly wage and material costs. The IP industry is trying to sell toilets on a pay-per-flush basis and then acts all surprised when people don't accept this and see no ethical problems with piracy. The real solution would be to find a way to charge for things that people do consider scarce, such as the developers/artists time. Unless we find a way to do that we are stuck with this conflict between consumers and producers of IP.
- erichocean 10y ago
  > As with all IP, once created the value of a copy is pretty much zero. It's a simple case of supply and demand, the supply is infinite so logically the price is zero. That's why I believe everyone should print their own counterfeit money: • printing money for yourself does not deprive anyone else of their money, just like "stealing" a copy of a book, film, or piece of software does not deprive anyone else of their copy • money (which is just pretty looking paper) has essentially no intrinsic value, just like a copy of a book, film, or piece of software (which are just bits) The OP is exactly right: the only reason money has "value" today is because the supply is being artificially restricted: the value of a copy is pretty much zero. It's a simple case of supply and demand, because with counterfeiting, the supply is infinite so logically the price should be zero. > The IP industry is trying to sell toilets on a pay-per-flush basis and then acts all surprised when people don't accept this and see no ethical problems with piracy. Same with the banking industry.
- goseeastarwar 10y ago
  Pharmaceutical companies spend 100's of millions developing new drugs, but it costs essentially nothing to manufacture those pills once they have FDA approval. Who expects medicine to be free because they cost nothing to replicate?
samat 10y ago
I disagree, but this is the only website which for I did not enable reader mode in Safari. The best mobile experience ever. Love you man.
iplaw 10y ago
He didn't even hit on two other major talking points: 1) Free annual macOS updates. 2) Free Pages, Numbers, Keynote, GarageBand, etc. This change forced Microsoft to drastically reduce the price of their OS, and to offer free upgrades to Windows 10 for a couple of years! It also prevents people who buy Macs from having to decide between Pages/Numbers/Keynote and the oft-times more familiar and business-friendly Microsoft Office suite. If they get the basic productivity apps for free, why bother with an Office365 subscription? Hell, offering GarageBand for free is undoubtedly undermining the business models of countless consumer-grade audio and mixing software developers. It keeps Mac users within the Apple software ecosystem.
- nervositee 10y ago
  and, you know, google also made an office suite free before Apple made theirs free.
  - iplaw 10y ago
    But Google was simply extending their already-free web-based offering, not taking historically expensive desktop software (operating systems and productivity suites) and making them free.
metafunctor 10y ago
Apple is in the business of selling hardware. A good selection of (cheap) apps sells more hardware. This is also why they keep coming up with new APIs that are only available on new devices. They need apps that only work on new devices to sell more of those devices.
nailer 10y ago
I think precisely the opposite is true. The article mentions: > That means selling at a low price, because most customers will only pay low prices, and all customers prefer low prices. Before Apple's excellent app store, how mainstream was it for people to talk about purchasing apps at all? So people prefer low prices. Before this, they preferred not having software or piracy.
youngtaff 10y ago
It's interesting how Apple have driven AppStore prices towards a race to the bottom when they're selling premium priced hardware. If less money was being spend on the devices would more be available for apps, of would it turn out like the Android ecosystem where everything is cheap too?
- nervositee 10y ago
  People are spending even less on cheaper android hardware. So it might even be the opposite, that since you bought an expensive hardware you can at least pay a couple of dollars for that app that you could also get for free. You don't buy the cheapest tires on your expensive car ;)
twelfthnight 10y ago
> If you sell at $3 instead, your number of sales will go down by much more than the factor of three that you increased the price by. In a way, this is great. By charging less for software more people are able to enjoy your software and you make more money. It's a win-win. I think the only (but major) issue here is that 30% is a laughably high cut for Apple. This cut is so high that only really popular software can be profitable for the developers. There's a lot of useful software that won't get built because it's niche and isn't profitable after 30% is taken off the top.
- HappyTypist 10y ago
  Credit card fees at Apple's scale = $0.15 + ~1.5%
  - Turing_Machine 10y ago
    The base fee isn't the only factor here in play here, though. People are much more willing to give Apple their credit card number than some unknown (to them) web site. Amazon works the same way. Just yesterday, in fact, I was looking for a replacement part for one of my tools. Google search turned up several options for the part number -- several "parts warehouse"-type sites and Amazon. The price was a couple of bucks higher on Amazon, but I bought it there nonetheless. Why? Because Amazon already has my CC info, and I trust them to actually deliver the product and keep my information secure. The other sites may be (in fact, probably are) trustworthy, but I don't know that. I have no idea how well they're securing my card information. I have no idea if they're even going to deliver the part in a timely manner. Amazon wound up getting my money, because saving two bucks just wasn't worth the risk and extra transaction friction. Same thing with the app stores. The dev is providing the software, and Apple is providing the infrastructure and the reputation. Is 30% too high for that? Maybe, maybe not. For an unknown dev, it may well be. If you're a well-known company with an established reputation, maybe it isn't. I've noticed that a lot of the big names (e.g., Bare Bones Software) have exited the app store of late.
    - pythonaut_16 10y ago
amelius 10y ago
Google has damaged the perceived value of personal data.
greybox 10y ago
I see it moving to a situation where a consumer pays a monthly price and has access to all the apps they want to download. This is already happening to games (see humble bundle & EA Origin subscription). Amazon are moving this way to an extent, at GDC 2016 the announced that you could publish your app for free on their app store for their line of tablets, and they would pay you per customer per minute of usage on your app. Also, didn't exactly the same thing happen to music industry? Now we can pay $0 for music, we just have adds interspersed between tracks. The same thing will eventually happen to everything digitally distributable.
- meheleventyone 10y ago
  Amazon actually announced their service was closing down last week: https://developer.amazon.com/blogs/appstore/post/cbadeae1-990d-4d52-bef5-ea61f6114b94/announcement-amazon-actually-free-program https://developer.amazon.com/blogs/appstore/post/cbadeae1-99...
  - greybox 10y ago
    At the time I thought they would just turn down the money/minute dial to almost zero once they had brought enough people to their platform that it wasn't worth it anymore. I didn't realise they would shut it down completely. I would be interested in seeing data about how successful that program was at attracting actual consumers to the platform rather than just developers . . . .
    - meheleventyone 10y ago
      Yup, I'm not sure it was amazingly popular with either. The Amazon appstore has a bit of an uphill battle in the regard in general AFAIK. In regard to your other points I also happened across this today: http://www.informationisbeautiful.net/visualizations/spotify-apple-music-tidal-music-streaming-services-royalty-rates-compared/ http://www.informationisbeautiful.net/visualizations/spotify... Interesting how quickly these subscription services are losing money and how low the rate of return to the artist is.
ungzd 10y ago
iOS is entertainment and consumption platform just because you can't do anything serious with your greasy finger. You can edit text and graphics on Commodore 64 but almost can't on iPad Pro. There will be no CADs for $50000. One exception for this is music software (synthesizers, controllers) which are usable with touch screen but in this case OS (that is designed for entertainment and phone calls) is against them, i.e. no interoperability between apps, no real file system, bad external devices support (although sound subsystem is surprisingly good). Who wants to buy fart app or doodle drawer for $200? There's potential for games (it's possible to make or port RTS with great controls), but only on iPad connected to charger. Who wants this when there are PC and consoles? And what if you develop great new CelestialCraft&Conquer for 3 years, and users are willing to pay $50 for it, but then it's rejected by Apple? So everyone is making 3-in-a-rows.
FussyZeus 10y ago
I mean is it really Apple, though? Android by comparison has millions of free apps that do nothing but spy on you end to end, after the OS has already spied on you thoroughly. Maybe Apple users are now trained to think all software should be priced like apps (I disagree with this, but am willing to consider it a possibility for a given group of the iOS user base) but Google meanwhile has trained a whole lot more users that all software should be free and they just need to put up with invasive advertising. I'd argue the latter is far more damaging than the former.
resoluteteeth 10y ago
Surely this is one reason that even consumer-oriented software is going to a SaaS model? For iphone apps potential purchasers will be comparing your software to other aps that cost $3, but the normal rate for subscription services is $5-$20/mo., so just by making your software a subscription website, you can ask for a higher effective total price without seeming unreasonable.
candiodari 10y ago
Unless you can capture the value of something, it may have value, but the price is going to be low. In order for something to be of value to an inventor, the value must be able to be captured. This is easy for, say pharmaceuticals ("you'd like to live ? That'll be $5000 please. Patents mean nobody else can save you"). Likewise, software has the problem that replicating software is too easy, hence the value can't be captured. Imagine what would immediately happen if someone made an app that people would gladly pay $5000 for (e.g. one that somehow gets them interviews for a $100k job), it would immediately be replicated and sold for $500. And then $50. Only where that is really hard can you profit. Software that for some reason can't be easily duplicated. Only Microsoft seems to have pulled that off, for very large and complex programs and even there the engine seems to be sputtering. Larger article about this: https://www.wsj.com/articles/peter-thiel-competition-is-for-losers-1410535536 https://www.wsj.com/articles/peter-thiel-competition-is-for-...
mstade 10y ago
I disagree with most of the points made, I think Apple has done more to make software a viable product than any other company. The problem however is that they paint everything in very broad strokes. Everyone pays the 30% Apple tax, regardless of whether you sold a single or a million copies. The absolute numbers on the tax paid for a million copies is higher, but so is the revenue. I'm not sure a progressive system is better than a linear system either, where the top earners would pay more than those at the bottom. In any case, out of all the issues with the App Store I think this one of app cost is the least interesting. Rather, the ever changing landscape of Apple approval policies and the severe platform lock-in effect is worse. Apple can more or less kill a viable business simply by denying an app in their store, and that removes the entire iOS market for that business with little to no recourse. This is the bigger deal I think. Figuring out how to get people to pay you $3 instead of $1 is less important I think, when you'll most certainly get $0 if you can't sell the damn thing in the first place. I don't fully understand how Apple is allowed to effectively close off a significant market like this.
golergka 10y ago
The biggest fallacy in the post as well as in the comment is that there's some "true", "fair" value of software, and we can just work it out with clever arguments. There isn't. Developer and consumer have conflicting interests as far as price of the software go, and the price is set at a point where these interests meet. Of course, there are other variables (such as software developer being able to pay the bills) and parties (such as Apple) at play, but ultimately, this is, as always, just a matter of conflicting interests and resources that both sides have to influence the outcome. All discussions about what is "fair" or "right" in this situation have literally no meaning.
afinlayson 10y ago
I had my own App Company back in 2009, before I went corporate and joined Apple to work on iOS. I saw the problem as this: once a person has created a valuable software package, usually it costs nothing to rip it off. Example: If I create the best kick ass calculator, with 10x better UX, better functionality. And charge $10. The learning has been done and the barrier to reproduce what I've created is almost 0. So someone does that, and remakes it, adds a photo sharing feature and charges $5. Then a student comes along and thinks "that's cleaver, but what if I add farting noises" and because He gets education out of it, make's it completely free. How does the first guy recoup his R&D cost? He can't really. It's too easy to reproduce. I know this is a little simplistic, because there's the marketing effort and SEO. But it's hard to convince someone that they should buy the $10 app when there is a free app. Even if the paid one is better. (Which if you are a fan of fart noises, maybe it's not)
- DragonTurbino 10y ago
  But this exists everywhere. You can start a lemon stand and I copy it and make lemonade that is cheaper and so on. It is so stupid to blame Apple for this.
ksk 10y ago
The other "genius" thing Apple did is force people on the iOS treadmill. Your iphone keeps getting slower and slower, apps you paid for stop working, and you keep buying new iphones and new apps all over again. I don't believe it was a Machiavellian smoke-filled-room type of thing, but it just ended up that way, and hey look, apple just so happens to have made some cash off of that.
- criddell 10y ago
  In my experience, that isn't true at all. In fact, I've heard the opposite. When iPad sales slump, one explanation is often that everybody's old iPad is still working great and people have no reason to upgrade.
  - ksk 10y ago
    I have personally seen atleast 20 iphones (family and friends) progressively slow down over each iOS update. I'd challenge anyone to take an iPhone 4S, for example, with iOS 5 vs iOS 9 and tell me they're equally fast. Whats worse is Apple intentionally blocks you from going back to the 'factory state' on a device you paid hundreds of dollars on. >When iPad sales slump, one explanation is often that everybody's old iPad is still working great and people have no reason to upgrade. Yes, that sounds about right.
    - criddell 10y ago
      My phone is an iPhone 5C and thankfully it hasn't slowed yet. I did have to remove a bunch of stuff to get the last upgrade to complete though. Once the upgrade finished, I was able to reload everything.
ChuckMcM 10y ago
I certainly agree with the article's premise, that Apple has put essentially a cap on what you can earn. I don't know that this devalues software as much as people copying does however. Consider a couple of scenarios; in scenario 1 when someone publishes an App that is the only App of its kind available in the store. There are millions of phone/tablet users and you capture some some percentage of them and you make a few million dollars[1]. Scenario 2 is someone publishes an App in the App store, and it starts to sell well, then 15 additional people publish the exact same App in the App store and are so busy undercutting each other the price has gone down to 99 cents. But lets say this group of apps still sells reasonably well, then another 1500 people put out the same App on the store they all sell for 99 cents or are free with in game purchases. The original app creator made perhaps a few thousand dollars on the sale of the app. And all the people jumping on board made anywhere from nothing to a few thousand as well. This isn't the first time that technology has released the creative spark in thousands more people, and as a result the market was flooded with new products that were vaguely similar. The industrial revolution had a similar effect it seems. As it became possible for more and more people to build things in a small factory or with less training and apprenticeship things got a bit out of hand and the thing that saved them was that if you patented your invention you could be assured (if you defended your invention against infringers) of a small monopoly to recoup your costs. And if you had that sort of system today, you could invest all your time and effort and build your app and patent it and then not have to worry that hundreds of ripoff lookalikes of varying quality would dilute the market and the returns. And yet it would be pretty silly to have a 20 year monopoly on an App that made fart sounds, but perhaps something more aligned with technology time frames like 5 years or 3 years. The fundamental challenge is that it is always easier to 'reproduce' than to 'invent.' And if you cannot reward the inventors they won't be able to survive and we'll miss out on innovation that they might otherwise have been able to provide. [1] Don't worry I don't think this is reality :-)
wink 10y ago
I find it fascinating that this is mostly about iOS. Mac users are still the #1 group I'd pinpoint as "willing to pay for software at all" - and I do think that's the reason why there are many nice apps for the mac where I as a Linux user just use something usable-but-not-so-nice. But in the grand scale of things, I guess this doesn't matter so much if you compare mac app sales versus iOS sales, thus the main point of the article.
jowiar 10y ago
The big argument I'd make against this is that, before the App Store, most people didn't buy software at all. They used their web browser, maybe their office suite, and that was it.
makecheck 10y ago
I wish Apple distinguished between "upgradeable for a fee" and other "in-app purchases" instead of just lumping them together. Especially for games; as soon as I see that I just assume it is another gem scam pay-to-win game. I would buy a lot more if it was easy to tell that something is a demo with a purchase specifically to buy (as opposed to gems).
scarface74 10y ago
Target the largest customer base, so they get 30% of the biggest potential income. That means selling at a low price, because most customers will only pay low prices, and all customers prefer low prices. This teaches customers that software’s average value is low. As software developers, why target the largest customer base instead of creating a product that people are willing to pay money for and target people who can and will spend money? Apple doesn't target people who are only willing to buy a $60 unlocked phone or a cheap computer. Apple Stores are usually located in the most affluent areas in the country. Build a universal app (iPhone and iPad versions, in the same package) to increase the attractiveness and convenience of owning multiple iOS devices. You’ll earn a “+” in your app’s buy-button on the Store. This teaches customers that supporting multiple devices isn’t something to pay extra for. I wouldn't pay twice for the same app to run on my 13" laptop and my desktop, why should I pay twice for the same app for my iPhone and iPad? Provide regular updates, at no cost; so much so that there’s no mechanism for paid upgrades at all. This teaches customers that they should expect free upgrades for life, no matter how little they paid for the software initially. It's clunky, but app developers are doing paid upgrades via app bundles. Make exactly one sale of an app per person, ever, regardless of the number of devices they own, how often the app has been updated since they last used it, and so on. This also teaches customers that they’re entitled to come back to a free app at any point in the future, no matter how long ago they paid for it. How is that different from any other software? I can still run old Win95 software today. Sell only through their store, with their distribution mechanism, their product page design and user flow, and their 30% cut — which doesn’t provide for marketing or discovery of any kind beyond searchability, and the very small chance of being featured in some way. It's always been the responsibility of the producer to market their products and make it stand out. Coke and Pepsi don't depend on the stores to advertise for them. The majority of customers probably have no idea that the price they pay for an app is almost 43% higher than the amount the developer will receive, before tax (i.e. that Apple takes 30% off the top). I think consumers know there is a markup to what they buy in a store. Unless you're selling a game, selling an app in the store is not the way to make money. The companies that make money from apps are using the apps as a front end for a service consumers want. I made more money in 2008 as a "mobile developer" working on Windows CE devices for a company that produced a service that other customers want than most indie app developers make today.
abandonliberty 10y ago
Consumer data mining and advertising has had a far greater effect. Consumers used to pay for software. Now software pays for consumers. I wonder how much google spends every year on an average user. The software is just an intermediary process step in the acquisition of consumer data and advertising dollars.

211 points by prawn 10y ago

I think the only real problem is, that you can't distribute paid upgrades.

>Make exactly one sale of an app per person, ever, regardless of the number of devices they own, how often the app has been updated since they last used it, and so on. This also teaches customers that they’re entitled to come back to a free app at any point in the future, no matter how long ago they paid for it. And >Ideally, make exactly one sale of an app per family. This reinforces the commodification of software; it’s to be shared around. From a consumer perspective, I whole heartedly agree with author. I own 3 devices, 1 is android and other 2 are Iphones. I never noticed how damaging this could be for developers to have their work sold for the price of one when most of the people use them on multiple devices. Update part also makes sense, an application built 3 years ago has come a long way since then and have taken thousands of work hours for maintainance and updates.

empressplay 10y ago
You aren't selling an app though, you're buying a customer.
cLeEOGPw 10y ago
Why should I pay twice for your app? If an app is IP, then I bought it and am supposed to use it where I want. If you charge for devices separately, means you are not selling IP, you are selling bits, of which there is infinite supply. At the point you sold an app second time to the user, he realizes that the app is just bits that he can copy himself for free.
nervositee 10y ago
But as a consumer, what the heck am I buying? I'm not buying a physical product, I'm buying a sequence of 0 and 1. It's a license to use said app. It's not the 90's anymore where you own a CD with your program and that is your product. I cannot re-sell the "used app" when I don't use it anymore. So if I buy the 'license' to use your app, I'm gonna be real effin pissed if I can't use it on all my devices. Actually tying your purchase to your Apple ID is much better for the dev, because only YOU can use it. A CD with software is much easier to share with your friends.
- xixi77 10y ago
  Exactly: people are complaining about technology because it gives consumer an option to have a copy on multiple devices, but at the same time they are just taking the things that the same technology gives them, such as preventing people from reselling their copies, as some kind of a God-given right.

detaro 10y ago

Alternative candidate: Google and the model of ad-based software

darrmit 10y ago
Agreed. I think this has been more damaging than anything. Most people just have no idea what they're giving up in exchange for the free software/service, and when they find out, it's too hidden for them to care.
- eeZah7Ux 10y ago
  If anything, apps are even more invasive than webapps when it comes to snatching your data, tracking you or displaying ads. (And I'm not defending google)

deleted 10y ago

[deleted]

hvs 10y ago

I think the "1 purchase, multiple devices" is fair in the sense that I'm only using one device at a time. Also, if I upgrade my phone, why should I have to buy your app again? That said, the lack of a paid upgrade option in the App Store is a significant negative. To pretend that a one-time purchase for $5 should guarantee you a lifetime of upgrades is both shortsighted and abusive to developers.

dismantlethesun 10y ago
It's not really that terrible. Everyone can just use the Microsoft Approach and date-name their software. Buying Office 2015 only gets you that version. If you want Office 2017, it's not an 'update' per se unless they generously offer it to you, but rather an entirely new piece of software.
- andmarios 10y ago
  If you do that in the app store (ios or android), prepare to get thousands of 1-star reviews for your old version from people who believe they are entitled to updates for their lifetime. I've seen it upfront two times in the playstore, where apps I liked released a new version. I was eager to buy the new version but the new/updated reviews for the old ones were ruthless. One app had to give the new version for free. The other had to promise to keep updating the old version too. The first team just gave up on both apps. The second team (one developer actually) continued but slowly toned down his efforts, going into essentially maintenance mode.
  - dismantlethesun 10y ago
    Can't you take down the old app? Maybe previous owners can continue to use and download it but new customers won't be able to find it in the search.
    - deleted 10y ago
      [deleted]
  - 10y ago

yen223 10y ago

I would posit that "free" but ad-driven sites did far more harm than Apple ever could. If anything, I think it's pretty impressive how Apple made paying for apps a viable thing, back in the days of rampant Internet piracy.

twoodfin 10y ago
Exactly: The problem for small software developers isn't Apple, it's that the logical price for the far-and-away biggest app makers (Google, Facebook, Snap) to charge is $0. Customers naturally fix their expectations from the apps they use every day.

jamesrcole 10y ago

Why are low prices Apple's fault? If it's their fault, what did they do to push things in that direction? What could they have done to have pushed things in the other direction? I'm willing to listen to honest attempts to answer those questions.

msh 10y ago
Its hard to charge prices when apple don't allow trial versions.
- jamesrcole 10y ago
  They might not have an explicit mechanism for trial versions, but people do make either a free version of their app, or make their app free and have IAP to purchase the full version.
- criddell 10y ago
  I don't think that's as big of a problem as many people do. I've played games where the first level is free and if you like the game, you buy more levels. I've tried productivity applications where the free version limits some quantitative aspect - like task managers that allow 3 projects.

mcv 10y ago

I wonder if Steam isn't doing something similar. Prices are higher there, but I almost never pay full price for a Steam game, and I get the game for all platforms at once.

samtho 10y ago
I would argue they are not. The cost of getting a game to steam is significantly higher than getting an app to a marketplace (Apple, Android, etc) and are meant to last for a much shorter span of time. As others have stated, the cost for making copies if effectively zero. The race is not to the bottom (as there are too many specialized games for different niches) rather, it's a race for content production.
- mcv 10y ago
  Is that so different from the app store? Why would Steam games be meant to last for a shorter time than mobile apps? Most mobile games tire pretty quickly, whereas some of the games on Steam have enormous statying power.

sosodaft 10y ago

This is why the only startups I'll work for are B2B. Trying to sell an "app" to the masses? Uber is losing money and they're a household name, good luck with your Tinder for dogs or whatever.

nol13 10y ago
well it's like tinder for dogs, but for cats!
icebraining 10y ago
Uber is a taxi company, their business model has very little in common with your average app-selling startup.

matt4077 10y ago

Oh come on... Apple single-handedly revived the software-for-consumers business model with the App Store. Before, people bought a PC with an OEM license for Office and got their son to install a pirated version of Photoshop. There was essentially no market for consumer software outside of games.

rantanplan 10y ago
Revived as in what? Make people believe that 1 million of fart apps is worth paying for? How much value do you put on apps that superimpose dog ears on people in real time video/camera? How many apps have you downloaded and how many are actually useful to you?
- matt4077 10y ago
  You're kinda proving my point.
  - rantanplan 10y ago
    Yeah, I probably misinterpreted what point you were trying to make.
- mwfunk 10y ago
  It's hardly Apple's fault that people aren't willing to pay big money for fart apps. If you want to put a $10 fart app out there, it's not like anyone's stopping you from doing it. Speaking for myself at least, I've purchased quite a few mobile apps over the years. If I need an app in a certain category, I will always get one that costs money over one that's free with ads. I'm sure I'm in the minority, but people like me don't have to be the majority for someone to make money from an app. The only thing that matters is the number of people like me out there, not the percentage of total users we represent. I do think there's much room for improvement of course. I wish they would do stuff like allow people to offer paid upgrades. But claiming that there are literally no good paid apps is just silly.
  - 10y ago

onion2k 10y ago

Apple's number one key, most important reason for their rules about apps is simple - they prioritise whatever keeps users buying a new iPhones every 2 years. Multiple iterations of what is ostensibly the same app with small feature additions isn't going to do that - users don't need a new phone to run something with some extra levels or a new admin screen. Apple need to keep the content in the app store looking like new things that take advantage of new phone features. Brands are great, so new versions of games that use existing IP are welcomed, but new minor versions of previous apps are not. If you want to build and release small, incremental iterations of an application instead of major updated versions of an application then don't write software for iPhones.

cdevs 10y ago

I agree with the problem but Wouldn't this be more because the indie market is fighting the larger businesses for prices until the final lowest price step to compete for buyers was a .99 cent app or in app purchase or ads. If App Store kept indies out we would have had 9.99 Microsoft word style apps everywhere. It sucks now for a single dev who can't market a app for $30,000 dollars that only makes $8,000. It almost mimics the American economy where the top %1 wins, sometimes you hear of a lower class citizen making it and then everyone thinks they can make it.

bo1024 10y ago
I think your point relates to the discoverability problem the author mentioned. People mostly find or learn about apps through the App Store. So apps that get to the top of search results can get millions of downloads while similar but unlucky apps get almost nothing.
- wayn3 10y ago
  Its almost like you have to learn some marketing to sell stuff(?)
- w0utert 10y ago
  Better app discovery could help a lot: even if 90% of your potential customers are unwilling to spend more than $0.00 for apps, that still leaves literally millions who would consider buying if they were only able to find it. It's not an easy thing to solve though, I think the promotion and discovery model should be changed fundamentally. First of all ratings and 'most popular' should be completely eliminated from the equation, because they are self-fullfilling and relatively easy to manipulate. I would like to see some form of syndication for apps, which suggests me apps that fit my preferences and use cases, which could (and likely is) vastly different from other people. For example, I would love to be able to find (by whatever means possible) more developer-oriented apps (either on desktop or mobile) for things I don't even know I could use. The current app store model provides basically zero opportunities for this, I can go to the 'developer section' in the app store and look at the top 25 apps but there my options to discover apps stops. There really is no way for niche apps that could find a decent number of paid customers to promote themselves. Besides better app discovery, trial versions are really essential. I would like some kind of subscription service that lets me try literally every app I want, but only for one month after which I would have to buy it at the regular price. Yet another idea could be to allow developers to join forces and bundle their apps, dividing the profits through some kind of agreed-on distribution. This way low-volume/high-margin apps that would be hard to sell in large numbers as standalone could piggyback on high-volume/low-margin apps. Plenty of possible improvements.. At any rate I feel something needs to change, because the current situation is hurting creativity and decreasing the quality and value of many app categories.

georgespencer 10y ago

> Target the largest customer base, so they get 30% of the biggest potential income. That means selling at a low price, because most customers will only pay low prices, and all customers prefer low prices. This teaches customers that software’s average value is low. Can someone explain to me this logic? It seems faulty. Put it this way: if it were somehow possible to make more money as a developer in the App store, how would removing Apple's 30% cut make it more feasible? Apple and developers have a shared incentive to make as much money as possible, but developers control pricing and who they target. Apple is just along for the ride. > Build a universal app (iPhone and iPad versions, in the same package) to increase the attractiveness and convenience of owning multiple iOS devices. You’ll earn a “+” in your app’s buy-button on the Store. This teaches customers that supporting multiple devices isn’t something to pay extra for. This is better, and fairer, than the alternative. My iPad and my iPhone run the same operating system. Why should I pay twice for the same functionality across both of them? If Apple didn't do this people would be writing articles lamenting the fact that they want to make their 30% cut twice. > Also include an Apple Watch version within the iPhone app. As above. I would be happy to pay to unlock Apple Watch functionality in apps. I'm not sure that Apple prevents that from happening. But I agree with the author here provided the extra functionality is not simply "notifications" but something meaningful and unique to the watch's hardware. > Provide regular updates, at no cost; so much so that there’s no mechanism for paid upgrades at all. This teaches customers that they should expect free upgrades for life, no matter how little they paid for the software initially. There is a mechanism for a paid update, which is to simply state end of life for an app and release a new one (a la Tweetbot). Another way of looking at this is: Apple is encouraging developers to release new apps at full price once they feel that they have something new to launch, OR to use subscription pricing or quasi subscription pricing like Marco does with Overcast. > Make exactly one sale of an app per person, ever, regardless of the number of devices they own, how often the app has been updated since they last used it, and so on. This also teaches customers that they’re entitled to come back to a free app at any point in the future, no matter how long ago they paid for it. That seems fair to me as a consumer. If I bought something a year ago and want to re-install it, why shouldn't I? Wouldn't it seem unfair to not be able to use something I paid for? > Ideally, make exactly one sale of an app per family. This reinforces the commodification of software; it’s to be shared around. "Ideally" = Apple does not enforce this. > Sell only through their store, with their distribution mechanism, their product page design and user flow, and their 30% cut — which doesn’t provide for marketing or discovery of any kind beyond searchability, and the very small chance of being featured in some way. The majority of customers probably have no idea that the price they pay for an app is almost 43% higher than the amount the developer will receive, before tax (i.e. that Apple takes 30% off the top). Which has done more for the security and quality of the software which is available to consumers. (And that's also a reason affluent middle class folks flock to iOS.) And Apple allows search marketing and of course doesn't stop developers from marketing in Google, Bing, on TV, etc. which is where the majority of installs are driven for most app-centric startups I know.

lazyjones 10y ago

I'm not sure that Apple's environment is hostile towards sustainability of small software businesses like the author claims. Sure, prices are low, but the market is huge and it's extremely easy to sell large numbers if the app is worth anything. To put it differently: how well would a small software business that is struggling under these conditions have fared 25-30 years ago when you had to advertise in print magazines and carry the disks to the post office for every customer (and every update!)? The fact that there is more competition now, isn't exactly Apple's fault either.

visarga 10y ago
In the past, there was very limited ad space in tech magazines, so, inevitably, fewer softwares were known and money focused on those that remained. Today apps are competing with millions of other apps directly in the app store, anything you want it's been done and released free / with ads, so it's a whole different kind of difficult, probably more difficult than in the past.
greybox 10y ago
I think the problem is more that the consumer now expects to be able to download pretty much everything for free and for the developer to make money in some other way. E.G F2P games
doctorwho 10y ago
I started writing shareware in 8o's and even then there were alternative "marketing" and distribution methods to print, like BBSes, SIMTEL20 (and other FTP archives), usenet, user groups, shareware CD's and sharing among friends. It worked pretty well actually. There was abuse of course and it started a whole anti-piracy industry. Protection techniques cost a lot to create and maintain and they didn't really solve the problem. SaaS is so popular today because it practically eliminates piracy. Developers get paid for what they build or they go broke because nobody wants what they've built.

Eridrus 10y ago

I don't think this is Apple's fault as much as the reality of competition. The reason apps are so cheap is because there are so many substitutes. Apple may be highlighting those who support multiple platforms, but its not telling anyone what to charge. Musicians complain about the same thing as music gets cheaper and remains somewhat fungible. It's no one's fault, it's just the reality of competition in an industry with zero marginal cost.

cousin_it 10y ago
This x100. The problem has nothing to do with Apple. Writers, painters and musicians have been faced with the same kind of market for a while, though there's no centralized middleman. Video game developers are headed that way as well. When distribution is easy, "little guys" overrun the market and drive the average success level to zero. Ironically the one thing that might help is centralized gatekeeping with strict quality control. But that's not as profitable for the gatekeeper as the alternative, so I guess it makes sense for the gatekeeper to be a non-profit entity that can enforce rules, like a union or guild. I wonder when the world will realize that.
- pdkl95 10y ago
  s/centralized gatekeeping/curation service/ Yes, it won't be as profitable as a walled garden, and it will live or die by their reputation. When the market races to the bottom, quality suffers and the risk of scams/etc increases. Eventually, this creates a market of people who don't want to risk buying a lemon. A store that carefully curated what they offer and/or offers additional guarantees about safety/quality/etc is a model that has been successful in the past.
  - Eridrus 10y ago
    I don't think lemons are a real concern in digital economies where marginal costs are zero, so it costs you nothing other than a lost sale to offer a refund. Not sure about Apple's store, but you can get a refund without too much difficulty on Steam of the Play store. Discoverability is a real concern though.

darrmit 10y ago

Was (consumer) software ever perceived as that valuable, though? Most everyone I know is completely unwilling to buy an app or subscription. Even some technical people I know just refuse to spend money on software or services. It's not something I understand or agree with, just something I've noticed. It may be a more regional thing, too, here in the rural southeast.

chrisp_dc 10y ago
I don't think consumer software has been that valuable in my lifetime. MS Office, & Turbo Tax are killer apps that people pay for. People willingly pay for online games too. Other than that? I guess some people buy apps. I don't think it's regional. I've never bought an app. I paid for some dev tools, but that's it. Selling productivity outside of people's work is an uphill battle.

deleted 10y ago

[deleted]

spcelzrd 10y ago

As a developer, I use a lot of open source. But I haven't paid for a desktop application in years. The web, with it's promise of a free browser and free web applications, has done as much to destroy the perceived value of software.

eeZah7Ux 10y ago
You are confusing value with price. Breathable air is free of charge (so far) and people value breathing. Similarly, pro bono work does not cheapen the value of a lawyer work. Working for $1 per hour does.
BlackFly 10y ago
I've paid for IntelliJ and Maple. Yeah, my company would pay for IntelliJ, but I prefer to install it at home and work on my own projects and occasionally change jobs. I am paying for the updates is how I see it. As long as people keep paying, they ought to keep working on it. The minute that stops seeming to be true, I will probably switch to other products.
orkoden 10y ago
Free web applications and free FLOSS have lead to people not valuing software you are right. If there is much good software and services available for free, why should I pay? As a developer I have bought many pieces of software to make my work easier: Git Tower, Kaleidoscope, PaintCode, Dash, Reveal, Charles, Acorn, Paw, are what come to mind right now. I perceive all of these tools' value to be high.

jamespo 10y ago

This is partly why a lot of older IOS apps I bought (such as the excellent Mr Reader) have been abandoned by their developers I suspect, as even basic maintenance isn't worth the revenue stream. And these apps will soon be incompatible with the forthcoming 64-bit switch.

drchiu 10y ago

How about Google when it comes to web apps? Gmail and Google Docs come to mind. Reality is all the big internet corps have been doing this for a long time. Then there are those of us who develop fremiums which further reinforce this behaviour. Now we price our products north of 100/month to try and weed out the non ideal customer.

Androider 10y ago
Google offers Gmail and Docs for free to consumers, in order to hook businesses into using it (and mining the consumer's data, of course). And it's working great, they announced a while back that over 3 million businesses are now signed up for the commercial G Suite [0], paying $5- $10 per employee/month in perpetuity (I personally consider the G Suite fantastic value as a business owner). [0] https://thenextweb.com/insider/2017/01/27/google-just-passed-3m-businesses-paying-for-g-suite https://thenextweb.com/insider/2017/01/27/google-just-passed...
- pythonaut_16 10y ago
  G Suite absolutely destroys Office 365 at the web experience. Gmail is far superior to Outlook online, and all of the Google Docs/drive online experience is extremely well integrated, fast, and intuitive compared to Office 365. Microsoft wins hands down at the desktop experience though. If you have big or complicated documents and spreadsheets you can't beat Office. For me personally, G Suite wins because by the time I need Word or Excel I'm going to reach for a full powered solution like Latex or Python.
stupidcar 10y ago
Yeah, both Google and Apple have contributed to the commoditisation of consumer software. But I don't think it was a strategy designed to screw over independent developers though. It was designed to stop Microsoft. Microsoft's 90s dominance was achieved by commoditising PC hardware, owning the OS market and the most profitable parts of the software market, and locking in the rest of the software market to their OS. Apple and Google looked at this and decided that, rather than try to beat MS at their own game, they were going to change the rules to favour their own strengths. In Apple's case, that's hardware. In Google's case, that's web services and advertising. Apple's strategy was to decommoditise hardware by making their products premium, desirable objects. Meanwhile, they gave their OS and its upgrades away for free, so decreasing the perceived value of Windows. Then they built a software market on top of their OS, one even more locked-down than in the old Windows model. Google's strategy was initially to make the OS irrelevant by building the web into an alternative application platform. Then, when mobile arrived, they gave away Android for free in order to both encourage commoditisation of mobile hardware (discouraging Apple/iPhone dominance) and lower the perceived value of OS (harming MS/Windows).

Aaargh20318 10y ago

I'd argue that the perceived value of software is correct. As with all IP, once created the value of a copy is pretty much zero. It's a simple case of supply and demand, the supply is infinite so logically the price is zero. The problem is not selling software (or songs, or movies or any other IP really) for too little, the problem is billing for something that is not scarce. People intuitively understand that scarce things have value and that the value depends on how scarce it is. This is why selling things for which there is an unlimited supply is an uphill battle. Look at it like this: if you hire a plumber to install a toilet in your home, would you accept it if the toilet was 'free' but you had to pay a fee for every usage ? Hell no. But you'll gladly pay the plumbers hourly wage and material costs. The IP industry is trying to sell toilets on a pay-per-flush basis and then acts all surprised when people don't accept this and see no ethical problems with piracy. The real solution would be to find a way to charge for things that people do consider scarce, such as the developers/artists time. Unless we find a way to do that we are stuck with this conflict between consumers and producers of IP.

erichocean 10y ago
> As with all IP, once created the value of a copy is pretty much zero. It's a simple case of supply and demand, the supply is infinite so logically the price is zero. That's why I believe everyone should print their own counterfeit money: • printing money for yourself does not deprive anyone else of their money, just like "stealing" a copy of a book, film, or piece of software does not deprive anyone else of their copy • money (which is just pretty looking paper) has essentially no intrinsic value, just like a copy of a book, film, or piece of software (which are just bits) The OP is exactly right: the only reason money has "value" today is because the supply is being artificially restricted: the value of a copy is pretty much zero. It's a simple case of supply and demand, because with counterfeiting, the supply is infinite so logically the price should be zero. > The IP industry is trying to sell toilets on a pay-per-flush basis and then acts all surprised when people don't accept this and see no ethical problems with piracy. Same with the banking industry.
goseeastarwar 10y ago
Pharmaceutical companies spend 100's of millions developing new drugs, but it costs essentially nothing to manufacture those pills once they have FDA approval. Who expects medicine to be free because they cost nothing to replicate?

samat 10y ago

I disagree, but this is the only website which for I did not enable reader mode in Safari. The best mobile experience ever. Love you man.

iplaw 10y ago

He didn't even hit on two other major talking points: 1) Free annual macOS updates. 2) Free Pages, Numbers, Keynote, GarageBand, etc. This change forced Microsoft to drastically reduce the price of their OS, and to offer free upgrades to Windows 10 for a couple of years! It also prevents people who buy Macs from having to decide between Pages/Numbers/Keynote and the oft-times more familiar and business-friendly Microsoft Office suite. If they get the basic productivity apps for free, why bother with an Office365 subscription? Hell, offering GarageBand for free is undoubtedly undermining the business models of countless consumer-grade audio and mixing software developers. It keeps Mac users within the Apple software ecosystem.

nervositee 10y ago
and, you know, google also made an office suite free before Apple made theirs free.
- iplaw 10y ago
  But Google was simply extending their already-free web-based offering, not taking historically expensive desktop software (operating systems and productivity suites) and making them free.

metafunctor 10y ago

Apple is in the business of selling hardware. A good selection of (cheap) apps sells more hardware. This is also why they keep coming up with new APIs that are only available on new devices. They need apps that only work on new devices to sell more of those devices.

nailer 10y ago

I think precisely the opposite is true. The article mentions: > That means selling at a low price, because most customers will only pay low prices, and all customers prefer low prices. Before Apple's excellent app store, how mainstream was it for people to talk about purchasing apps at all? So people prefer low prices. Before this, they preferred not having software or piracy.

youngtaff 10y ago

It's interesting how Apple have driven AppStore prices towards a race to the bottom when they're selling premium priced hardware. If less money was being spend on the devices would more be available for apps, of would it turn out like the Android ecosystem where everything is cheap too?

nervositee 10y ago
People are spending even less on cheaper android hardware. So it might even be the opposite, that since you bought an expensive hardware you can at least pay a couple of dollars for that app that you could also get for free. You don't buy the cheapest tires on your expensive car ;)

twelfthnight 10y ago

> If you sell at $3 instead, your number of sales will go down by much more than the factor of three that you increased the price by. In a way, this is great. By charging less for software more people are able to enjoy your software and you make more money. It's a win-win. I think the only (but major) issue here is that 30% is a laughably high cut for Apple. This cut is so high that only really popular software can be profitable for the developers. There's a lot of useful software that won't get built because it's niche and isn't profitable after 30% is taken off the top.

HappyTypist 10y ago
Credit card fees at Apple's scale = $0.15 + ~1.5%
- Turing_Machine 10y ago
  The base fee isn't the only factor here in play here, though. People are much more willing to give Apple their credit card number than some unknown (to them) web site. Amazon works the same way. Just yesterday, in fact, I was looking for a replacement part for one of my tools. Google search turned up several options for the part number -- several "parts warehouse"-type sites and Amazon. The price was a couple of bucks higher on Amazon, but I bought it there nonetheless. Why? Because Amazon already has my CC info, and I trust them to actually deliver the product and keep my information secure. The other sites may be (in fact, probably are) trustworthy, but I don't know that. I have no idea how well they're securing my card information. I have no idea if they're even going to deliver the part in a timely manner. Amazon wound up getting my money, because saving two bucks just wasn't worth the risk and extra transaction friction. Same thing with the app stores. The dev is providing the software, and Apple is providing the infrastructure and the reputation. Is 30% too high for that? Maybe, maybe not. For an unknown dev, it may well be. If you're a well-known company with an established reputation, maybe it isn't. I've noticed that a lot of the big names (e.g., Bare Bones Software) have exited the app store of late.
  - pythonaut_16 10y ago

amelius 10y ago

Google has damaged the perceived value of personal data.

greybox 10y ago

I see it moving to a situation where a consumer pays a monthly price and has access to all the apps they want to download. This is already happening to games (see humble bundle & EA Origin subscription). Amazon are moving this way to an extent, at GDC 2016 the announced that you could publish your app for free on their app store for their line of tablets, and they would pay you per customer per minute of usage on your app. Also, didn't exactly the same thing happen to music industry? Now we can pay $0 for music, we just have adds interspersed between tracks. The same thing will eventually happen to everything digitally distributable.

meheleventyone 10y ago
Amazon actually announced their service was closing down last week: https://developer.amazon.com/blogs/appstore/post/cbadeae1-990d-4d52-bef5-ea61f6114b94/announcement-amazon-actually-free-program https://developer.amazon.com/blogs/appstore/post/cbadeae1-99...
- greybox 10y ago
  At the time I thought they would just turn down the money/minute dial to almost zero once they had brought enough people to their platform that it wasn't worth it anymore. I didn't realise they would shut it down completely. I would be interested in seeing data about how successful that program was at attracting actual consumers to the platform rather than just developers . . . .
  - meheleventyone 10y ago
    Yup, I'm not sure it was amazingly popular with either. The Amazon appstore has a bit of an uphill battle in the regard in general AFAIK. In regard to your other points I also happened across this today: http://www.informationisbeautiful.net/visualizations/spotify-apple-music-tidal-music-streaming-services-royalty-rates-compared/ http://www.informationisbeautiful.net/visualizations/spotify... Interesting how quickly these subscription services are losing money and how low the rate of return to the artist is.

ungzd 10y ago

iOS is entertainment and consumption platform just because you can't do anything serious with your greasy finger. You can edit text and graphics on Commodore 64 but almost can't on iPad Pro. There will be no CADs for $50000. One exception for this is music software (synthesizers, controllers) which are usable with touch screen but in this case OS (that is designed for entertainment and phone calls) is against them, i.e. no interoperability between apps, no real file system, bad external devices support (although sound subsystem is surprisingly good). Who wants to buy fart app or doodle drawer for $200? There's potential for games (it's possible to make or port RTS with great controls), but only on iPad connected to charger. Who wants this when there are PC and consoles? And what if you develop great new CelestialCraft&Conquer for 3 years, and users are willing to pay $50 for it, but then it's rejected by Apple? So everyone is making 3-in-a-rows.

FussyZeus 10y ago

I mean is it really Apple, though? Android by comparison has millions of free apps that do nothing but spy on you end to end, after the OS has already spied on you thoroughly. Maybe Apple users are now trained to think all software should be priced like apps (I disagree with this, but am willing to consider it a possibility for a given group of the iOS user base) but Google meanwhile has trained a whole lot more users that all software should be free and they just need to put up with invasive advertising. I'd argue the latter is far more damaging than the former.

resoluteteeth 10y ago

Surely this is one reason that even consumer-oriented software is going to a SaaS model? For iphone apps potential purchasers will be comparing your software to other aps that cost $3, but the normal rate for subscription services is $5-$20/mo., so just by making your software a subscription website, you can ask for a higher effective total price without seeming unreasonable.

candiodari 10y ago

Unless you can capture the value of something, it may have value, but the price is going to be low. In order for something to be of value to an inventor, the value must be able to be captured. This is easy for, say pharmaceuticals ("you'd like to live ? That'll be $5000 please. Patents mean nobody else can save you"). Likewise, software has the problem that replicating software is too easy, hence the value can't be captured. Imagine what would immediately happen if someone made an app that people would gladly pay $5000 for (e.g. one that somehow gets them interviews for a $100k job), it would immediately be replicated and sold for $500. And then $50. Only where that is really hard can you profit. Software that for some reason can't be easily duplicated. Only Microsoft seems to have pulled that off, for very large and complex programs and even there the engine seems to be sputtering. Larger article about this: https://www.wsj.com/articles/peter-thiel-competition-is-for-losers-1410535536 https://www.wsj.com/articles/peter-thiel-competition-is-for-...

mstade 10y ago

I disagree with most of the points made, I think Apple has done more to make software a viable product than any other company. The problem however is that they paint everything in very broad strokes. Everyone pays the 30% Apple tax, regardless of whether you sold a single or a million copies. The absolute numbers on the tax paid for a million copies is higher, but so is the revenue. I'm not sure a progressive system is better than a linear system either, where the top earners would pay more than those at the bottom. In any case, out of all the issues with the App Store I think this one of app cost is the least interesting. Rather, the ever changing landscape of Apple approval policies and the severe platform lock-in effect is worse. Apple can more or less kill a viable business simply by denying an app in their store, and that removes the entire iOS market for that business with little to no recourse. This is the bigger deal I think. Figuring out how to get people to pay you $3 instead of $1 is less important I think, when you'll most certainly get $0 if you can't sell the damn thing in the first place. I don't fully understand how Apple is allowed to effectively close off a significant market like this.

golergka 10y ago

The biggest fallacy in the post as well as in the comment is that there's some "true", "fair" value of software, and we can just work it out with clever arguments. There isn't. Developer and consumer have conflicting interests as far as price of the software go, and the price is set at a point where these interests meet. Of course, there are other variables (such as software developer being able to pay the bills) and parties (such as Apple) at play, but ultimately, this is, as always, just a matter of conflicting interests and resources that both sides have to influence the outcome. All discussions about what is "fair" or "right" in this situation have literally no meaning.

afinlayson 10y ago

I had my own App Company back in 2009, before I went corporate and joined Apple to work on iOS. I saw the problem as this: once a person has created a valuable software package, usually it costs nothing to rip it off. Example: If I create the best kick ass calculator, with 10x better UX, better functionality. And charge $10. The learning has been done and the barrier to reproduce what I've created is almost 0. So someone does that, and remakes it, adds a photo sharing feature and charges $5. Then a student comes along and thinks "that's cleaver, but what if I add farting noises" and because He gets education out of it, make's it completely free. How does the first guy recoup his R&D cost? He can't really. It's too easy to reproduce. I know this is a little simplistic, because there's the marketing effort and SEO. But it's hard to convince someone that they should buy the $10 app when there is a free app. Even if the paid one is better. (Which if you are a fan of fart noises, maybe it's not)

DragonTurbino 10y ago
But this exists everywhere. You can start a lemon stand and I copy it and make lemonade that is cheaper and so on. It is so stupid to blame Apple for this.

ksk 10y ago

The other "genius" thing Apple did is force people on the iOS treadmill. Your iphone keeps getting slower and slower, apps you paid for stop working, and you keep buying new iphones and new apps all over again. I don't believe it was a Machiavellian smoke-filled-room type of thing, but it just ended up that way, and hey look, apple just so happens to have made some cash off of that.

criddell 10y ago
In my experience, that isn't true at all. In fact, I've heard the opposite. When iPad sales slump, one explanation is often that everybody's old iPad is still working great and people have no reason to upgrade.
- ksk 10y ago
  I have personally seen atleast 20 iphones (family and friends) progressively slow down over each iOS update. I'd challenge anyone to take an iPhone 4S, for example, with iOS 5 vs iOS 9 and tell me they're equally fast. Whats worse is Apple intentionally blocks you from going back to the 'factory state' on a device you paid hundreds of dollars on. >When iPad sales slump, one explanation is often that everybody's old iPad is still working great and people have no reason to upgrade. Yes, that sounds about right.
  - criddell 10y ago
    My phone is an iPhone 5C and thankfully it hasn't slowed yet. I did have to remove a bunch of stuff to get the last upgrade to complete though. Once the upgrade finished, I was able to reload everything.

ChuckMcM 10y ago

I certainly agree with the article's premise, that Apple has put essentially a cap on what you can earn. I don't know that this devalues software as much as people copying does however. Consider a couple of scenarios; in scenario 1 when someone publishes an App that is the only App of its kind available in the store. There are millions of phone/tablet users and you capture some some percentage of them and you make a few million dollars[1]. Scenario 2 is someone publishes an App in the App store, and it starts to sell well, then 15 additional people publish the exact same App in the App store and are so busy undercutting each other the price has gone down to 99 cents. But lets say this group of apps still sells reasonably well, then another 1500 people put out the same App on the store they all sell for 99 cents or are free with in game purchases. The original app creator made perhaps a few thousand dollars on the sale of the app. And all the people jumping on board made anywhere from nothing to a few thousand as well. This isn't the first time that technology has released the creative spark in thousands more people, and as a result the market was flooded with new products that were vaguely similar. The industrial revolution had a similar effect it seems. As it became possible for more and more people to build things in a small factory or with less training and apprenticeship things got a bit out of hand and the thing that saved them was that if you patented your invention you could be assured (if you defended your invention against infringers) of a small monopoly to recoup your costs. And if you had that sort of system today, you could invest all your time and effort and build your app and patent it and then not have to worry that hundreds of ripoff lookalikes of varying quality would dilute the market and the returns. And yet it would be pretty silly to have a 20 year monopoly on an App that made fart sounds, but perhaps something more aligned with technology time frames like 5 years or 3 years. The fundamental challenge is that it is always easier to 'reproduce' than to 'invent.' And if you cannot reward the inventors they won't be able to survive and we'll miss out on innovation that they might otherwise have been able to provide. [1] Don't worry I don't think this is reality :-)

wink 10y ago

I find it fascinating that this is mostly about iOS. Mac users are still the #1 group I'd pinpoint as "willing to pay for software at all" - and I do think that's the reason why there are many nice apps for the mac where I as a Linux user just use something usable-but-not-so-nice. But in the grand scale of things, I guess this doesn't matter so much if you compare mac app sales versus iOS sales, thus the main point of the article.

jowiar 10y ago

The big argument I'd make against this is that, before the App Store, most people didn't buy software at all. They used their web browser, maybe their office suite, and that was it.

makecheck 10y ago

I wish Apple distinguished between "upgradeable for a fee" and other "in-app purchases" instead of just lumping them together. Especially for games; as soon as I see that I just assume it is another gem scam pay-to-win game. I would buy a lot more if it was easy to tell that something is a demo with a purchase specifically to buy (as opposed to gems).

scarface74 10y ago

Target the largest customer base, so they get 30% of the biggest potential income. That means selling at a low price, because most customers will only pay low prices, and all customers prefer low prices. This teaches customers that software’s average value is low. As software developers, why target the largest customer base instead of creating a product that people are willing to pay money for and target people who can and will spend money? Apple doesn't target people who are only willing to buy a $60 unlocked phone or a cheap computer. Apple Stores are usually located in the most affluent areas in the country. Build a universal app (iPhone and iPad versions, in the same package) to increase the attractiveness and convenience of owning multiple iOS devices. You’ll earn a “+” in your app’s buy-button on the Store. This teaches customers that supporting multiple devices isn’t something to pay extra for. I wouldn't pay twice for the same app to run on my 13" laptop and my desktop, why should I pay twice for the same app for my iPhone and iPad? Provide regular updates, at no cost; so much so that there’s no mechanism for paid upgrades at all. This teaches customers that they should expect free upgrades for life, no matter how little they paid for the software initially. It's clunky, but app developers are doing paid upgrades via app bundles. Make exactly one sale of an app per person, ever, regardless of the number of devices they own, how often the app has been updated since they last used it, and so on. This also teaches customers that they’re entitled to come back to a free app at any point in the future, no matter how long ago they paid for it. How is that different from any other software? I can still run old Win95 software today. Sell only through their store, with their distribution mechanism, their product page design and user flow, and their 30% cut — which doesn’t provide for marketing or discovery of any kind beyond searchability, and the very small chance of being featured in some way. It's always been the responsibility of the producer to market their products and make it stand out. Coke and Pepsi don't depend on the stores to advertise for them. The majority of customers probably have no idea that the price they pay for an app is almost 43% higher than the amount the developer will receive, before tax (i.e. that Apple takes 30% off the top). I think consumers know there is a markup to what they buy in a store. Unless you're selling a game, selling an app in the store is not the way to make money. The companies that make money from apps are using the apps as a front end for a service consumers want. I made more money in 2008 as a "mobile developer" working on Windows CE devices for a company that produced a service that other customers want than most indie app developers make today.

abandonliberty 10y ago

Consumer data mining and advertising has had a far greater effect. Consumers used to pay for software. Now software pays for consumers. I wonder how much google spends every year on an average user. The software is just an intermediary process step in the acquisition of consumer data and advertising dollars.