By Chuong Nguyen | December 11, 2008 12:01 PM
While the Apple iTunes App Store for the iPod Touch and iPhone have helped to popularize downloadable and third-party content for the mobile space, it is far from perfect. Shackled by the regulatory chains of Apple’s approval process–which thus far has been inconsistent–and offers no trials or demos, the App Store can stand to improve. What it does well is bring in great applications, games, and software at an affordable price point with most apps running less than $10. However, with that price point, one App Store developer feels that consumers are opting for cheaper, less polished, less functional, and sometimes frivolous applications at the $1-$2 price point because if they go wrong, it’s only a buck or two.
In an open letter from Craig Hockenberry to Steve Jobs to change the App Store, the developer of Twitterrific–an app that tracks Twitter tweets–says: I’m starting to see a trend that concerns me: developers are lowering prices to the lowest possible level in order to get favorable placement in iTunes. This proliferation of 99¢ “ringtone apps” is affecting our product development. Essentially, the problem is getting people to see that our $2.99 product really is worth three times the price of a 99¢ piece of crapware.
Hockenberry argues that developers have three choices to compete with the cheaper, less functional apps. First, developers can lower their price point, but will have to sell multitude more applications to break even or make a profit. The second option is that developers can sell less in volume at a higher price point, taking longer time to break even or make a profit. The third option is to release products that are of lesser quality to price it lower in order to compete.
Another blogger refutes Hockberry’s claim. Jesse Farmer from 20bits states that the problem isn’t due to the nature of the market, but rather developers are confusing distribution, which the App Store is, and marketing their products to reach a greater population: The problem is that the App Store is a distribution channel (and a very good one, at that), but developers are using it as their primary means of marketing. Distribution and marketing aren’t one and the same, and this tension is why developers are feeling pinched. The problem is that most of the marketing occurs on the App Store itself and developers don’t market in other channels.
The App Store makes a great case study for Microsoft when it launches its SkyMarket–Windows Mobile’s online version of an over-the-air applications download portal. If quality Windows Mobile applications go down in price a bit to average between $10-$15 to compete with the high end iTunes App Store offerings at around $10, and if it is easy enough to download and install without worrisome DRM passwords, serial unlock codes, etc, we can have a winner on our hands as Windows Mobile applications already have trial versions. If somehow Microsoft can use the DRM algorithm that it uses for music synchronized with the Zune for applications on Windows Mobile, work with developers to bring consumer-level “fun apps” to SkyMarket, and offer these applications at competitive prices, Windows Mobile can regain market share and woo developers back.