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iPhone App Pricing Limits Developers

HardYakka writes "According to this post in the Fortune blog, the iTunes app store has been a boon for users but some developers are saying the number of free and 99 cent apps make it difficult for developers to create complex, higher priced apps. Craig Hockenberry of Iconfactory says the iPhone may never get its killer app like the spreadsheet was for the Mac. If Apple does not do something, the store will be left with only ring tones and simple games. Some are suggesting that overpaid developers are the problem and the recession will soon lower the wages and costs for complex apps."

26 of 437 comments (clear)

  1. What a whiner. by Whiney+Mac+Fanboy · · Score: 5, Insightful

    Iâ(TM)ve been thinking about whatâ(TM)s causing this rush to the 99Â price point. From what I can tell, itâ(TM)s because people are buying our products sight unseen. I see customers complaining about how âoeexpensiveâ a $4.99 app is and that it should cost less. (Do they do the same thing when they walk into Starbucks?) The only justification I can find for these attitudes is that you only have a screenshot to evaluate the quality of a product. A buck is easy to waste on an app that looks great in iTunes but works poorly once you install it.

    Why not release a free, crippled version of your app that allows people to look at it, evaluate it & decide if it's worth $2.99? Now where have I heard of that business model before?

    Honestly, there's so many development restrictions on iPhone apps, why bother publicizing this non-story.

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    1. Re:What a whiner. by Fluffeh · · Score: 4, Insightful

      This is what most of the developers are doing. I have bought a ton of full priced games (that are $5-15) as well as a few apps after trying the free versions.

      I think the article could be slightly amended to read: "Poor quality high priced apps won't sell for iPhone" or even "high priced apps without a demo version won't sell on the iPhone" and it would be much closer to the mark.

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  2. Right by Junior+J.+Junior+III · · Score: 5, Insightful

    Some are suggesting that overpaid developers are the problem and the recession will soon lower the wages and costs for complex apps."

    Because in the Shitty New Economy, people will be blowing all kinds of money on applications for their overpriced smartphones.

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    1. Re:Right by iluvcapra · · Score: 4, Insightful

      Last time I checked, the iPhone will typically run you $2000-$3000.

      By that logic, a Blackberry will run you $2000-3000; a Motorola POS with no money down will push $1500.

      --
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  3. Well, that is the problem right there by rolfwind · · Score: 4, Insightful

    One developer said:
    "Both developers and designers cost somewhere between $150-200 per hour."

    That's too much. I haven't used iTunes, but if it isn't based on simple popularity but has some kind of after-the-purchase rating system, there shouldn't be too many worries. If there isn't, they should implement one. With reviews and ratings like Amazon.

    I also have a hard time believing that only the most simple apps will get made, there seems to be a "10 Most Useful" iPhone App list every other week popping up at some social sites like Digg.

    1. Re:Well, that is the problem right there by Lumpy · · Score: 4, Insightful

      Exactly. It's a bunch of really whiney people complaining they are not making Millions overnight on the iphone.

      Guess what. Cellphones APPS DO NOT SELL IF THEY ARE EXPENSIVE.

      This is a fact that has been around ever cince the cellphone could run apps. Now we have a bunch of whiney babies complaining about the prices they can sell their crap apps at.

      What's next? They going to ask Washington for a bailout as well?

      IF Haji can write a app and sell it for $1.99 that you want to write and sell for $29.99, Haji is going to kick your ass in sales. Whining like little crybabies will not change that fact.

      --
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    2. Re:Well, that is the problem right there by p0tat03 · · Score: 4, Insightful

      Well, contract developers *do* cost that much. I think the real headliner here is: "Useless People Who Must Contract Everything Out Find There's No Profit"... which is kind of a no-brainer. The people who can do their own design, code, and whatnot can operate in the iPhone space. If you're a PHB type who can't code, can't design, and just can't do anything except cook up wacky iPhone application ideas, then there's no room for you. Seems like there's nothing wrong here :)

  4. competition? by arbiter1 · · Score: 5, Insightful

    Another limiting factor on iphone app's is fact apple will kill off any app that competes with their's or anything they are about to put out.

  5. Re:Add Top Apps for more price ranges by Anthony_Cargile · · Score: 5, Insightful

    I'm more worried about the usage of the oxymoron "overpaid developer".

  6. It's a stupid rant by tkrotchko · · Score: 5, Insightful

    It's a stupid rant. Look at the market for PC software.

    There are a lot of *free* applications. Lots. More than I can every use.

    Then there are inexpensive shareware stuff. $5-15

    Then there are the mainstream shareware apps. $40-60

    From there, applications go as high as you want to pay.... $100-500 $1000, $5000

    All are available on the internet. Do free applications limit the abilities of developers to churn out $50 software? Or $100 software? No. People will pay what the software is worth.

    This guy seems to be making the argument that somehow a low price sets the expectation of low prices. It's a dumb argument. If developers come up with an application that's worth $500 guess what... they will pay $500.

    What he's really saying that the $1 applications are so good that he can't compete. And that's probably true. What he needs to do is make his applications worth more than $1. It's not the platform that's holding him back. It's not the price of cheap software holding him back, it's his own inability to write valuable software that commands a premium price. Seriously. Does he even understand that you can't write a general purpose iPhone app and expect to get $50 for it? He's going to have to hit some vertical market software (highly specialized) to command premium dollars. How about a full-blown VST/Softsynth app that will accept plugins for the iPhone? I'd pay $200 for that. How about working with a high-end electronics company to write apps to control lighting/music for home-automation? He could probably get $300-500 for that.

    Just being a good programmer isn't good enough. He should know better.

    Seriously, he's all wet.

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    1. Re:It's a stupid rant by c_forq · · Score: 4, Insightful

      To add to your point, I work at a company that uses a wide mix of programs (FOSS and closed source). Our company also staffs over 30 programmers (we are not a software or computer-related company, the programmers just do in-house stuff). There are still programs we pay for that are $3,000+ a seat [plus the worker that runs it, who gets $60,000/yr plus benefits, in the midwest (where the cost of living is WAY lower than the coasts or large cities)]. Something that gets the job done, and done well is worth that.

      --
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  7. Re:Spreadsheet by morgan_greywolf · · Score: 4, Insightful

    Yeah, I have no idea why people think the 'killer app' for the Mac was the spreadsheet. The Mac's killer app was desktop publishing and, later, graphic design. To this day, there is still no better platform for DTP and graphic design than the Mac.

  8. iElephant in the Room? by fuzzyfuzzyfungus · · Score: 4, Insightful

    Sure, having to compete with el-cheapo apps isn't anybody's idea of fun; but I find it very odd that their presence would act against complex apps. If the simple stuff is a mass of cheap and/or free, then the profit motive will lead developers to try to build products that distinguish themselves from the mass and can command a higher price(or, y'know, lobby for new laws, RIAA style).

    Rather than "OMG cheap competition!" I'd be inclined to suspect a couple of things: First and foremost: Uncertainty over App store approval rules. Apple can, and sometimes does, just yank the rug out from under an app during the approval process. The rules are underdetermined and don't seem to be followed terribly consistently, and there is no real appeal. This is Apple's right, legally speaking; but is it any huge surprise that people are not rushing to make large investments in highly complex products?
    Secondly, cellphones, even nice ones, are mediocre platforms for big highly complex stuff. Apple has done a substantially better job than usual; but nothing(presently available) can really disguise the fact that you are working on a tiny screen, with very limited input options.

    Somehow, those terrible, terrible, innovation killing people who give software away have failed to destroy large, complex applications on the PC, I strongly doubt that they are managing that here.

  9. Re:Add Top Apps for more price ranges by frosty_tsm · · Score: 4, Insightful

    Agreed. Especially when you consider the low product quality that results and higher developer-count required to deliver with lower-cost developers.

  10. Re:Add Top Apps for more price ranges by Anthony_Cargile · · Score: 5, Insightful

    And if thats not bad enough, Apple may at any time remove an app designed by us "overpaid developers" just because it may conflict with an existing (or to be existing) Apple app, or if it just pisses Apple off (IAmRich).

    I've joked ever since I found out about this that Opera, the Mozilla Foundation and Sun should release their software for the jailbroken iPhones only, in addition to an Android port.

    Mobile platforms are the new platform wars: Android (representing Linux), iPhone (Mac), and Windows Mobile (Win). The next generation developers will have to port apps painfully across these platforms, or pick and choose at the cost of some customers. Not to mention other platforms like Blackberry and the like that don't fall into those categories, save Sun's JavaME portability.

    If I were ever asked to write a mobile client for any application of mine by anybody, public or not, I would probably shoot myself at the first thought of "But I have this phone". You can have it, spare me until the dust settles.
    </rant>

  11. Re:Like spreadsheets for the MAC? by _Sprocket_ · · Score: 5, Insightful

    VisiCalc was first released for the Apple (not Mac), and sales skyrocketed. Apple's were the original business desktop computer.

    And not only that, they were a key part of getting IBM to consider the microcomputer more than a toy. Enter the IBM PC.

  12. Re:Add Top Apps for more price ranges by Anthony_Cargile · · Score: 4, Insightful

    No I wasn't talking about the same developers you are, e.g. coders that throw function pointers in directly with raw input and similar shit and wonder where the bugs/exploits come from (and get paid a wad to write those patches).

    I'm talking about the high quality, underrepresented programmers that get stuck in a low-end job that not only underminds their ability, but pays much lower than the quality of code is that they write, which would be much more suitable for the big companies the shitty programmers get put in. When they would hear "overpaid developers", the first thing they would think of is "Yeah, all I need is less pay".

  13. Re:Like spreadsheets for the MAC? by jackbird · · Score: 4, Insightful

    Not if you adjust for the number of PCs in the wild at the time.

  14. Bravely Stupid? by Gary+W.+Longsine · · Score: 4, Insightful

    Your hired. You'll be paid $100k a year, and you'll write a new iPhone app for me every six weeks. An idea could be as complex as I like, and I still can't see it taking you more than six weeks to implement, unless you're a shitty developer or wasting time, in which case, you're fired.

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  15. Re:Add Top Apps for more price ranges by tapehands · · Score: 5, Insightful

    oy. Seriously...if I were a developer that was considering writing an app that could be construed as "killer", the #1 turnoff would be Apple's ability to cannibalize my work.

    What recourse, if any, would there be if Apple decided to yank my $XX app off the store, only to have the same functionality trumpeted in a new firmware release? (like they already have done)

    Futhermore, Apple chooses when and where to enforce their store rules. Google is allowed to break rules. Would a small development firm be so lucky?

    There just isn't enough incentive or security to develop something much more useful than a game, ringtone, or eggtimer.

  16. Re:BS by ScrewMaster · · Score: 4, Insightful

    and I still can't see spending more than $100 Grand on it for an iPhone app.

    100k goes fast, and that's not even considering non-development-related costs. If your app requires hosting or has any server-side component, that's going to be an ongoing expense. If you aren't selling your product as a service, or have a subscription fee, those costs are going to have to be paid out of the take from new sales. If your app proves to be really popular, odds are you're going to need a support staff. That hundred grand is gone. Pfft.

    This is particularly true because any Apple-related product is going to be heavy on the graphics, and that's going to require art support (not many coders know their way around Photoshop or have any animation skills whatsoever.) Ditto on sound effects and music. A hundred grand sounds like a lot, but when it comes to software development and support nowadays, it really isn't.

    --
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  17. Sarcasm is dead. by Gary+W.+Longsine · · Score: 4, Insightful

    Uhm... "Flamebait" this was not. Using the exact same argument as its parent, applied on the flip side of the developer relationship (cost, rather than revenue) should have merited an Insightful mod. Alas, there is no "understands subtle arguments" requirement for moderators.

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  18. Re:Spreadsheet by mabhatter654 · · Score: 4, Insightful

    and the first rounds were cheap... prices for good software rise as the market proves GOOD software is hard to make.

    Right now iPhone is in "gold rush" mode. Every body is making everything thing at every price because nobody knows what the market is yet, it's been 6 months.. hardly time for doom and gloom.

    I think it's time to START complex apps as small apps and see how the market reacts. What can you sell for $1.99? The market is not ready to commit $29.99 to ANY app yet.. frankly if somebody else can make the same app for $2.99 then your app is not worth the higher price.

    There's three kinds of "complex". There's problems that are purely hard to solve like encoding video or building 3D game engines that take real talent to make it look easy. There are projects that are large and take lots of grunt work... ERP systems come to mind as simple programs but you need lots of them to work well or they take lots of content or research... think encyclopedias or the Sims again, it takes resources or creativity to make the volume of content required in a manner to sell it, not easy for good quality without money. The last are simply programs that are big... like office programs... They are easy to duplicate functions, but control the market because they have lots of little pieces and people using them. Unless you are in the first two groups don't expect to charge a lot.

  19. It's UNIX! I Know This! by SuperKendall · · Score: 5, Insightful

    Jeez, when will people accept that Macs are designed by people who themselves are designers and the OS is built around the typical workflow of designers and not that of code geeks and techies?

    If you knew anything of the internals you'd know just how wrong you actually were. Who among the code geeks and "techies" would not appreciate a mainstream computer that comes with Bash, Apache, Perl, PHP and Ruby built right in? Or can appreciate upcoming things like OpenCL?

    It's true there are ALSO a lot of great design oriented features added atop the very nice technical layer - but the technical innards are very much aimed squarely at the people you think have no interest.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
  20. Trial versions by sc00ch · · Score: 4, Insightful

    For me its inability for developers to offer trial versions of apps using the App store. I'm not going to pay more than a few bucks for something i cant try before i buy. Screenshots and reviews just dont cut it for me, so how about Apple allows developers to do x Day trials. I'm sure its possible!

  21. Knee-jerk misinterpretation of the original argume by iElucidate · · Score: 4, Insightful

    I think most commenters are missing the primary focus of the author's rant. This is fair, because his letter is laden with subtext that is probably not obvious to people who aren't intimately familiar with the iPhone developer community. I believe that the primary thrust of his argument is not that he should be paid more, or that his apps can't stand on their merits, or that he is no longer in a position to play gatekeeper.

    Rather, his primary complaints seem to be with the Apple-approved and required distribution mechanism for the iPhone, namely their App Store. The App Store severely limits how apps can be sold, promoted, and used. It does not allow for trial software, it does not allow for returns. There is no built-in help system or feedback mechanism. Ratings cannot be challenged. And the "top X apps" is segregated by "free" vs "pay" but not by different levels of pay. Therefore it is much easier to sell more copies of a $0.99 app and climb the charts, displacing potentially far better but more expensive apps that are naturally going to have fewer sales.

    Hockenberry's letter seems aimed at encouraging or nudging in the direction of fixing many of these perceived App Store deficiencies. That is why it is addressed to Steve Jobs, and not to other developers. He isn't saying "stop selling your $0.99 apps," he's saying, give all app developers a fair playing field to encourage innovation and risk-taking.