I'd counter that this emerging pricing structure suggests developers are finally charging fair prices for their software, and that this is a good thing.
I don't mean to be a curmudgeon, but I'd suggest that the move towards "free/freemium" across the web has helped to breed a sense of entitlement in users while devaluing the work of interface design and software development. To see a user buy an app for 99¢ on which a dev team spent months, then pan it with a one-star review complaining that it doesn't have a feature s/he dreamed up is ludicrous.
Geometry Wars from Activision is $9.99. After watching a demo on YouTube and finding it as good as (or better than) the Xbox version, I snapped it up and couldn't be happier.
I'm glad to see that developers are charging what their worth. This is good for software, and good for users.
A $10 precedent isn't bad. A precedent of $10 for apps of that average quality level is bad.
- Genuinely useful apps are worth well in excess of $0.99.
- iPhone consumers have been spoiled rotten by hyper-competition and the market of $0.99-no-matter-what.
- There's a lot of utter shit on the App Store that isn't worth the $0.99 people are charging for it.
The App Store signal to noise ratio is atrocious, and consumers have responded in their attitude towards app pricing. Bad apps are so plentiful (and have the same level of exposure as the good apps) that everything over $0.99 is a risk to the consumer for getting burned. Most apps are things that you'd start once, get bored with in 5 minutes, and never touch again, and provide little to no lasting use to the consumer whatsoever - it's not a surprise that consumers are tuned to paying $1 for such things.
I wish iPad app prices would stay at this level but they will almost certainly become diluted down to the iPhone levels (remember a year ago iPhone apps were ~$5).
I have a couple of apps in the AppStore. All of the apps that I've made were initially solely intended for my use, but I usually end up throwing them on the AppStore, mostly for the fun of it.
One of them is a extremely simple app I literally put together in about four hours; when I put it on the AppStore I priced it at 99 cents just to see what would happen. Surprisingly (for such a simple app), I was getting a steady 5-10 sales a day. A couple of weeks later, I jacked the price up to $3.99 just to see what would happen. For the first week at $3.99, I actually had between 15-20 sales a day. Since then, my sales have never dropped below 8 sales per day.
By increasing my price, I actually had a net increase in both quantity sold and revenue.
As with most products, higher priced goods are perceived as having more value than their lower-priced counterparts - even in the AppStore.
You need a lot fewer buyers at that point to pay for your development.
Remember, the reason apple can sell iWork at $20 is because they get money off of every sale of the ipad
More expensive apps also require more energy to market them. Three screenshots in the app store don't cut it. You need a proper website, and a screencast video, and such.
Honorable Call of Warslaying Online had five hundred man years invested into it and costs $60. Bingo Card Creator has, hmm, maybe 0.5 man years and costs $30. Charge based on value, not based on cost, or you risk auto-commoditizing your offering and locking yourself into a business which does not outscale the day job but has no stability or benefits.
I'm guessing that this stems from his mistaken belief that "Developers could make millions with a well designed, useful, or entertaining app"
I wonder if every $4 he spends on other things is a life-changer for him :)
Right now I don't see many people buying a $4.99 issue of Time for their iPad when you can subscribe to the paper edition and get 56 issues delivered to your door for $20. Yes there is a convenience component to the digital version, but a 1,400% markup in price isn't going to fly in the long run. Lots of experimental pricing like this will be going on for a little while. Early adopters will jump and spend money on content like this to show off and learn about their new device. But that'll dry up after a bit.
It's always easier to lower prices than to raise them. So it makes sense stuff will start off high. By late summer or maybe even by fall we'll have a better clue regarding iPad pricing models. More people will own them by then, and there will be more content available, competing for business, driving down prices.
1) Prices on the apps will drop.
2) The complexity of the apps will increase until they have the perceived value of what the purchaser wants.
