Posted on 08/20/2009 11:35:50 AM PDT by Star Traveler
Apple's 99-Cent Apps Are Too Cheap, Microsoft Says
By Barry Levine
August 20, 2009 9:39AM
Microsoft is wooing developers to Windows Mobile by promoting the idea that Apple, Inc. prices App Store apps too low at 99 cents. Loke Uei told developers "your app is worth more than that" in sessions preparing for Microsoft's launch of Windows Marketplace for Mobile. The BlackBerry, Palm and Android stores also plan to charge more than 99 cents.
With Apple's App Store offering many free and 99-cent apps whose prices please buyers but frustrate many developers, Microsoft is wooing developers to its Windows Mobile platform by promoting the idea that 99 cents is too low. Loke Uei, senior technical product manager for Windows Mobile, recently told developers that, while "99 cents is interesting," "your app is worth more than that." He made the comments at developer sessions currently being conducted in Redmond, Wash., in advance of Microsoft's launch of Windows Marketplace for Mobile.
Better Than 'A Dollar Store'
"We would definitely want to promote that you make more money selling applications than selling your application in a dollar store," he told developers, according to news media.
Research in Motion's BlackBerry App World has set the first price above free as $2.99. Palm's App Catalog and Google's Android Market are also planning to set app prices higher than 99 cents.
Late last year, an open letter to Apple CEO Steve Jobs by an iPhone developer received a great deal of attention on the Web, highlighting the argument that Apple's App Store prices apps too low to allow professional-level software development.
Craig Hockenberry, a principal at Greensboro, N.C.-based IconFactory, posted the open letter on his blog, furbo.org. "As an iPhone developer who's been in the App Store since its launch," he wrote, "I'm starting to see a trend that concerns me." This trend, he wrote, is that "developers are lowering prices to the lowest possible level in order to get placement on iTunes," and the "proliferation of 99-cent 'ringtone apps'" is affecting product development.
'Limited Life Span and Broad Appeal'
Hockenberry noted that his company released a game and a Twitter add-on for the App Store, and they received a fair amount of recognition and popularity. But the problem, he wrote, is funding the development of more substantial products. Instead of working on "cooler (and more complex) ideas," he wrote, which require more development time, they're working on 99-cent titles "that have a limited life span and broad appeal."
Bigger projects, he wrote, can take up to nine months, costing up to $225,000 and requiring sales of more than 300,000 units at the 99-cent rate. "Unless you have a white-hot title, selling 10-15k units a day for a few weeks isn't going to happen," he said. But raising prices means the product won't reach the top of the App Store charts, Hockenberry added, and things will become even harder as the number of apps in the store grows.
Hockenberry has pointed out that one basic issue is how users of Apple's platform are assessing whether to buy new apps. He noted that it appears that "people are buying our products sight unseen," with only a screenshot to evaluate a product. Under those conditions, he said, users are willing to lose a dollar on an app they're trying out for the first time, but not more.
Avi Greengart, an analyst with industry research firm Current Analysis, agreed that "app pricing is definitely an issue" for developers, although he noted that it is "less of an issue" for platform vendors, who love offering the budget-friendly price of 99 cents or free.
Greengart said he doesn't know if Apple will change its business model, but he "absolutely" expects the company to "tweak its promotional structure" so buyers can see something like "great apps over 99 cents."
But, Apple doesn't tell developers what to charge for their apps. They can charge anything they want. Apple takes 30% for its costs and the developer prices it any way they want. If the app is free, Apple charges nothing for having the app on their site.
We can see who has the consumer's best interest at heart... :-)
Well, it looks like Microsoft thinks Apple should *make developers* charge more money for the apps that they sell at Apple... LOL...
“Microsoft is fine if you want niche boutique stuff, but if you want to tap into the mass-market at competitive prices, you have to go to Apple....”
Quit crying, Microsoft. The AppStore is as close to a free market as you'll find with sellers choosing their prices and buyers deciding to buy or not. The only thing missing are some apps to compete with Apple's built in apps like their music player. Competing apps are against the rules, even though I could think of a half dozen improvements to the build in music player.
I’d love to write a .99 cent app that sold a million units.
‘Well, it looks like Microsoft thinks Apple should *make developers* charge more money for the apps that they sell at Apple... LOL...’
Many of my iPhone apps cost more than $.99. This article is a little misleading. And, Microsoft shouldn’t trash another company about software until it releases an operating system that doesn’t completely suck.
99cents is what microsoft should charge for VISTA
Yeah, I’m going to pay $79.95 for a “compass” app, or an app that will let me level a hanging picture frame. Good thinking Microsoft. Then, maybe they’ll let me call some guy in India to help me install it, by the many arms of vishnu
You said — I just found eRoentgen Radiology DX which “provides physicians with a fast, efficient way to determine which radiology test is best for a given patient.” Price: $49.99, which is a lot more than 99¢.
—
Exactly..., the apps are there and will sell, if they are good and meet a demand that is there.
Heck! There was one developer (not too long ago) who sold his 99¢ app at the iPhone Online Store and made $250,000 in about three months. Yee-haw! LOL....
LOL.... yep... that’s “Microsoft-think” for ya....
MSFT is dumb. The free apps are often “lite versions” that get you interested in the full version. And then some of the 99 cent apps aren’t worth 99 cents. The whole app thing has PC users checking out the I-touch and maybe the Apple Tablet if they can build in some computer functionality (a real keyboard, word processing). No wonder Mr. softy is pissed.
Not a bad strategy but the consumer demands the cheaper apps.
A guy did almost that... just recently... sold about 250,000 units in three months... hoo-boy!
[mattdono smirks]
Garde la Foi, mes amis! Nous nous sommes les sauveurs de la République! Maintenant et Toujours!
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I’d rather have a very small percentage of a very large number than a very large percentage of a very small number.
Yeah..., Microsoft charges *too much* for “cheap apps”.... :-)
Actually, 99 cents is pretty pricey for some apps.
Competitors that conspire to fix prices are guilty of collusion and restriction of free trade. This is illegal behavior.
Microsoft is just pissed about the ongoing failure that is the Zune and their music store.
You said — Actually, 99 cents is pretty pricey for some apps.
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I would agree for Vista... LOL...
But, in the iPhone Store, there are a lot of developers giving away apps for free, too... :-)
I’ve downloaded 25 apps to my iPod Touch. In all but 1 case the free, ad supported version was fine for my purpose. I paid $3.99 for a card game app my wife wanted.
You said — Microsoft is just pissed about the ongoing failure that is the Zune and their music store.
—
Yeah, even Microsoft employees have been throwing away their Zunes... well stune my beeber! LOL...
Letters from Microsoft: An Employee Tosses His Zune
http://www.freerepublic.com/focus/f-chat/2319063/posts
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That's exactly why MS is crying. MS doesn't want a free market. Their game is to undercut the competition on price until they run them out of business, then jack the prices up.
Microsoft thinks that Apple' Prices are too low and doesn't charge enoughWell, comparatively speaking, I think they've made their case. ;') Thanks sm.
True. It all depends on the app. I wouldn’t pay US$.99 for any version of Microsoft Windows. The user interface drives me crazy and I don’t like systems that crash. Ever.
I love my free lightsaber app.....thanks Apple....
Well, I think that was a stupid developer... LOL...
And actually, I seem to remember something that sounded like a “cool app” from some developer for the iPhone (you know... everyone is trying to “get rich quick” like that guy did in getting a 1/4 of a million in three months from his 99-cent app). That app was a sort of “flashlight” for the iPhone, making it so that you could have some light on a car door or your front door of your house at night, so you could get the key in the door... :-)
Well, I figured out that if I just opened up a web page on Safari and left it blank, I would have a great flashlight from the iPhone... so I never got it...
Heck! That was my own “app” that cost me nothing and also cost no “development time” either... LOL...
Okay so I am having a Scotch and had to read your post a few times......it made me laugh....so clever with your Safari/light app....you deserve a knuckle bump for that one !!!!!
may the force be with you
thanks... :-)
MicrosoftNBC is losing the game big time.
Sent via my iPod Touch 32 gig...
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