Long Term Effect of Apple’s App Store Policies

Kevin Hoctor on software pricing:

I think everyone can agree that we won’t survive long as indie developers if we can only charge one or two dollars for our apps. I don’t even think $15 is enough unless you have an enormous audience. So what do we do? How do we compete with the “race to the bottom” inspired by the App Store? I don’t have all the answers, but I do have my opinions and I’m willing to back them up with evidence through my business actions.

The topic of software pricing is still hot, and Kevin Hoctor, proprietor of No Thirst Software, has penned a great piece about his approach. Hoctor’s primary app, MoneyWell, existed before the Mac App Store and he talks about how he adjusted to the “race to the bottom” without compromising revenue. His approach is solid, and will hopefully serve as a good plan for others.

Apple does things to piss off users all the time. They take a lot of undue heat for things, but they also take a lot that is deserved. It’s clear now after 2+ years they are not going to bend on certain aspects of the Mac App Store. Trial versions are not going to happen. Upgrade pricing is not going to happen. And in reality this isn’t surprising. Apple stopped offering upgrade versions of their operating system a few years ago. They also don’t offer upgrade pricing for their other applications, or trials of any sort.

This has created an issue that is essentially fueling the “race to the bottom”. Apple is encouraging behavior that is bad for their customers. They are encouraging people to create software and abandon it because there is no way to make money off of maintaining an application after most of the initial sales have happened. It’s basically “pump and dump”. Put out an app and sell as many copies as possible, then never update it and just let it die. This isn’t a bad financial decision for Apple because they make 30% off every sale. Volume is more important than quality. They need quality over the long haul, but the short term view is, more is better.

This fact doesn’t really help fight the argument that Apple has some sort of “monopoly” on iOS apps. Remember in the ’90s when Microsoft was criticized (and punished) for having Internet Explorer pre-installed with Windows, and then subsequently preventing users from removing it? Apple is preventing other applications from even being installed. Could you imagine the outrage 15 years ago if Microsoft only allowed Microsoft software to be installed? Maybe the people that make the monopoly argument are right.

This is one of the features that Android fans like most about their ecosystem, unfortunately Android is screwed up in other ways. The fragmentation of Android versions across phones and carriers has greatly discouraged developers from investing their time and money. If Android could convince developers to get on board, and make the overall experience for them better, they could win this battle. Android’s market share is growing, and the product is improving. If they a majority of developers to put Android first, this battle will get interesting.

I don’t really fault Apple for having their own best interest first, that’s how businesses work. And ironically the investment I have made in the App Store is why I wouldn’t really consider leaving the iOS ecosystem any time soon. And while Apple continues to innovate it’s hardware, and add to it’s OS with new features, the App Store hasn’t show any innovation as a development platform. Apple’s marketshare is mostly about the apps, and Apple eventually needs to adjust accordingly so that good developers can survive, or in the end, the user’s will pay for it.