How Much Should an App Cost?

MacTrast.com reported today in a blog post that Apple may be trying to convince app developers to sell their apps for a higher price.

Whether or not there is any truth to this rumor, the idea brings up some interesting questions.  How much should apps really cost?  What negative effects might there be if many of the most popular iPhone apps continue to sell for only $.99? Have many users (myself included) been trained to balk at any app price more than a couple of dollars?

A quick glance at the “Top Paid” apps list shows that all but three of the top 25 apps on the list are currently selling for $.99. The other three weren’t selling for much more as these three were on sale for $1.99.  In fact, you would have to scroll all the way down to the 32nd app on the list to find anything that costs more than two dollars.  Clearly, the popular apps are the ones that the developers are willing to sell at a cheap price.

First of all, don’t get me wrong.  The app consumer in me loves the fact that I can purchase some really great apps for my iPhone for about the same price as a dollar hamburger at Mcdonalds.  I don’t think I’m alone when I say that I often take a pass on apps that are $2.99 or $3.99 in favor of other apps that are $.99 or even free.  I have been known to even wait for the price of an app to come down a dollar or two by using some apps that track prices of other apps.  I love getting cheap apps.

Part of me wonders, though, how much better apps would be if we were willing to pay a little bit more for them.  Are we, by expecting to pay little to nothing for apps, the ones to blame for the lack of quality in many apps on the app store?  While there are some really great games and apps on the App Store selling for $.99 right now, I have to wonder how much better the graphics, gameplay, levels, or production of these games and apps could be if the developers were earning more than a measly $.99 per sale (even less when you remember that Apple takes a 30% cut of each sale).  I do enjoy playing many of the simple, casual games that developers are churning out into the App Store, but I sometimes long for more of the high quality production titles that I feel are being killed off by the lack of people (again, myself included) wanting to put down more than a dollar or two on an app.  I also get frustrated at times with banner or pop-up ads that are present on some of my favorite apps. I know these ads are often a necessity because of the lack of profit the developers are making on these apps.

For me, one of the biggest reasons why I rarely spend more than a dollar or two on an app is the risk that the app won’t be something that I like or end up using very often.  For computer games there are demos of most games that I can try before plunking down my money.   On a gaming console, there are also demos available or I can rent a game and try it out before making the investment of buying it.  While it is fairly easy to find trusted reviews for most of the computer or console games I wish to buy, it is not as easy to find many trusted reviews on some of the apps I have an interest in buying due to the sheer number of apps on the App Store.  I just don’t always have much faith in the star rating system that the App Store uses.   I can vividly remember many instances where I was tempted to buy an app that was more than a couple of dollars, only to decide not to because I didn’t want to risk that the app wasn’t something I would enjoy.  Why risk paying that much when I can try similar apps for free or for a dollar?

If the rumor is true that Apple is starting to pressure developers into charging more for their apps, I think that Apple is looking in the wrong direction for a solution to low app prices.  Instead, Apple needs to take a look at how their App Store works if they wish to make more money on apps.  To help developers make more money for their apps and to help drive up app quality, I think that Apple needs to implement some sort of app preview system.  This could be as simple as allowing people to download and try apps for thirty minutes before having to purchase the app in order to continue using it.  Amazon is already doing something similar to this with their Amazon App Store that is available on Android phones.  Some of the apps available on the Amazon App Store can be tried out before purchasing them by using a phone simulator that runs right in your computer’s web browser.  If I could test out an app and find that I like it,  I feel I would be much more willing to shell out some more money for that app.

What do you think?  Have we as app consumers been trained to not expect to pay more than a dollar or two for most apps? If so, is this a habit that can be broken?  Do you feel that the quality of apps is lessened by the cheap prices at which developers have been selling their apps?  What are your solutions?  How much should an app really cost?

Looking forward to hearing all of your feedback and ideas!

 

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  • jhrogersii

    We have been trained, to a certain extent. Those of us who have been using smartphones for a while remember the days when mobile software cost were more like $10-$20, rather than $.99. Titles were also much harder to find and more trouble to install.

    In opening the App Store, Apple brought mobile smartphone software to the masses, and they responded. Devs, especially indie devs who wanted to stand out or who were able to supplement their apps with ad support, lowered prices to stand out and generate demand. If devs had know how widespread and permanent the deflationary effects would be, I think they might have approached things differently. Hindsight is 20/20, I guess.

    I hope Apple doesn’t get greedy and hurt or kill the golden goose. They have already shaken things up a bit with the addition of the iPad. It has become acceptable for HD apps to be priced higher. I know that high-end games with lots of content will often debut in the $6-$10 range. I think that is more than fair.

    Also, some apps that have proven their worth have been able to justify charging a premium price. GPS apps are quite popular, and quality ones with on-board maps start at around $30 and go as high as $80 with all of the extras added in. Others, such as World of Goo HD, Pocket Informant HD, Pages, Numbers, Keynote, Docs To Go Premium, and several PDF apps have been able to charge $9.99 or more and still sell well. However, these are the exception and not the rule.

    I don’t think that the quality has been destroyed by low prices, but I think they make it harder for small devs to be profitable long-term. The top apps in the App Store are usually very polished and provide a great experience. However, I’m sure smaller devs could stand a dollar or two more per sale to encourage more polish and refinement in their apps, while still making money. Also, let’s hope the Lodsys situation resolves in the devs favor, so that the very profitable option of in-app purchases doesn’t get hamstrung in litigation and licensing fees.

  • Aaronieru

    That is asinine. The price of apps have nothing to do with the price, because apps have no manufacturing cost. 99¢ Apps are selling the most, and they are making millions of dollars, so remember that before you fell sorry for the developers and start blaming the consumer. The reason so many people buy these apps is because they are so cheap. The price is inversely proportional to the number of buyers you get, so if you start raising prices, your sales will decrease, so your profits will remain the same, or less. There was already low quality in the App Store before most apps were 99¢, so you can’t blame it on that. This is bull$#!t. Apple isn’t stupid. If anything, they would be trying to convince the smaller number of devs with really expensive apps to lower their price.

  • jhrogersii

    If you think apps cost no money to make, then there isn’t much use talking sense to you. Maybe that would be true for hobbiests, but for any professional developer trying to make a living, time is money, and development and testing take time. More time than you probably know.

    I write and test code, build interfaces, and do systems integration for a living (in a different industry). I can assure you, every second I spend gets charged to a task for the job it belongs to. I can absolutely guarantee you that any dev employing more than 5-10 people and working in office space is doing the same. Overhead costs money. Dev accounts cost money. Dev machines and devices cost money. Advertising costs money. EVERYTHING costs money.

  • Ezzy

    This is a little misleading. Shouldn’t you be looking at the top GROSSING list?
    After all that is a better indication of earnings.
    And in that list there are higher priced apps stating at position 24

    • brad0885

      That is true that that Top Grossing list would give a better idea of what apps have earned. I was just using the Top 25 list as a way to know which apps were the most popular or being downloaded most often. Good point though.

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  • AndroidLover

    I left my droid for an iPhone, and Im not impressed. The app store was like a major shock just because the Android market has mostly free apps, at a better quality, and they are no restricted by limitations….

    If they want to maintain a competitiveness they should try to make a way for things to become cheaper, if anything….. Because I’m pretty sure when more people take notice to jailbraking an iPhone they can kiss there working class ppl, without a dollar to spare after buying a 400-500 dollar phone, goodbye…

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  • http://thebigapp.tumblr.com thebigapp

    This is a very good question and one I’ve thought of quite a bit. What you have to ask is how much do you think an app is worth? What are people willing to pay for a good laugh, or for better productivity? What would you pay for it?

    From the buyer’s point of view, you do get to the point where you feel ripped-off if an app doesn’t deliver. I bought some real losers in the early days and I’ve never used them. That experience moved me to be more careful when I’m thinking of actually purchasing.
    It’s not the money, though there is a psychology behind the willingness to throw away $0.99 versus $2.99. We’re not talking big money here so clearly something else is at play.

    From the programmer’s point of view, the urge to choose a price point based on the cost to develop the app or what others are charging for similar apps must be strong – but not necessarily smart. The app can be appropriately priced and have to compete with inferior apps priced at next to nothing.

    A very valid point is made in this article and asking Apple to step up and think of ways to help developers keep Apple’s customers happy is not too much to ask. The pressure should not only be on the developers.

    Ultimately, consumers can set their own rules, as well. From my point of view, I have decided to be more willing to support the development efforts and to stop expecting something for nothing.

    For the apps that were unsatisfactory I have decided to just shrug it off and consider the price a donation (easier to take this view at $0.99, to be sure). I may rate the apps if I think it is particularly bad.

    thebigapp.tumblr.com

  • Jay Developer

    As a developer I can tell you that the core problem is an imposed pricing structure by Apple that prices in dollar increments. So just to be competitive with similar apps, the race to the lowest price accelerates very quickly.

    How about pricing increments decided on by the developer, not by Apple. Personally I’m surprised this structure hasn’t turned up in a restraint of trade case.

    As far as I am concerned, creating for iPhone at this stage is a total waste of time. Very few people can make money in a cesspool of half a million 99 cent or free apps.

    To those who want free trials of apps. Get a freaking life – you ipidimize the freeloading nature of the Internet culture, no developers will Embrace that. it’s simply a pitch for more free stuff.

    It’s sad how people even bitch about free apps so easily. You can’t please teenagers who’s parents pay their cell phone bills anyhow, and they’ve never washed a sink load of dishes, or had a real job ever. The advocates of trials are just kids who are even too lazy or stupid to jailbreak. If you want free, invest some time into it and jailbreak… You can get anything free that way.

    Enough said, I sick of the whiners out there wanting more free, when their intent is to never pay for anything. This debate is over.

  • http://twitter.com/Cognitopia Cognitopia

    Well, I think it depends on the app and the audience. Some apps are for entertainment, others are for focused learning and then there’s the apps that are built as a lifetime support tool. I think the costs will vary and that people will be willing to pay a higher cost for the apps that provide a more substantial tool.