Shawn posted this last night, but this hits very close to home for me, wanted to add my 2 cents.
Matt Gemmell:
No company has done as much damage to the perceived value of software, and the sustainability of being an independent developer, as Apple.
Not that other companies wouldn’t have done the same thing — they would have. It’s just that Apple was the successful one.
It’s resolutely the fault of us as consumers, and it’s actively encouraged by the App Store.
This is a scorcher. At its heart, this is about the iOS App Store’s race to the bottom, price-wise, and the difficulty of making a living as a developer in a “pennies for your work” market.
Matt does an excellent job laying out all the details. A core argument:
Has Apple created a huge market, in terms of potential customers? Absolutely. It’s just done so at the expense of its platform-invested developer community. Judging by the company’s value and income, it was a very wise move, and you can justify it on that basis if you choose. But don’t ignore the reality of the situation. Apple is not a benevolent entity; your human-centric partner in aesthetics and ethos. If that was ever true at all.
Apple created the App Store. Is it their responsibility to ensure that the people whose work they benefit from, on whose backs they ride, have the ability to earn a living? Are developers in the same “fair trade” category as the miners who dig the rare earths that go into each and every iPhone?
Matt cocludes with this about the Mac App Store, which offers an economic model based on far fewer users and much higher pricing:
For developers who target the Mac, the last segment of the glass-and-aluminium Cupertino hardware line-up to still have plausibly sustainable economics, there’s only one course of action: pray that Apple remains disinterested.
Still chewing on all this. Lots to process. But thought this was worth sharing.
I don’t think Apple has done a lot to help but I think this falls on the developers and especially consumers more than Apple. Ultimately Apple is going where the money is and consumers have told them its in the 99 cent or less apps.
Most people have been groomed that software should be free even outside of the iOS ecosystem. When I worked as a computer technician going house to house 99% of the the time the only paid piece of software people had installed if anything was Microsoft Office and even that is slowly going away as Apple, Google etc. offer free alternatives. Bottom line is the market as a whole is heading towards free services paid for by ads or sacrificing privacy.
I think another part of the problem is developers spend too much time on apps that don’t have a lot of value regardless of the platform. Why would I want to pay $10 for your to-do list app when Apple provides one for free or there are 1,000 other options for $1 or less that offer the same or more functionality. There are some expensive (by app store standards) apps that I will absolutely pay for every time they release paid updates (Tweetbot, Fantastical, Omnifocus) but other apps where for its purpose I go for the cheapest option that gets the job done. Sometimes developers need to work on providing more value to justify their more expensive app.
There will always be a market for higher priced apps that don’t have those compromises but I don’t think anyone will ever get rich off of that set of customers.
It’s a plainly incredibly stupid argument. Vastly more developers are making their living as independent developers than ever did before the iPhone and app store.
I think you can look at this problem from 2 different aspects. The iOS app proposition is based on apps that mostly are one function tools.
The App Store for Mac OS has taken the same approach even though the utility of an app can be more complex and powerful. This where I see the problem.
As a former Apple dealer, we heard the news that Apple was launching the Mac App Store while gathered with about 150+ dealers across North America. Jobs announced it as a “One more thing” item at the end of his Keynote. Our room when deadly silent as everyone on the room instantly realized that we were about to lose 30-35% of our annual revenue overnight. We were all casualties of the Mac App Store which wiped out a big differentiator for us vis-a-vis Apple Stores (which hurt plenty, thank you very much). Most of us have closed up shop within a few years of that announcement. I just wish I’d liquidated earlier and bought a truckload of AAPL shares.
OpenDoc redux.
This is just a bunch of whining with no proposed solutions—as if Apple is going to respond somehow in any meaningful way.
So what accounts for the huge iOS/Mac developer community to which Apple has paid its billions of dollars in commissions?
If you can’t take the heat, get out of the kitchen. . and shut the hell up!
One solution is clear. Make truly differentiated, wonderful software, and sell it for a price that allows you to make a living. In other words, follow the lead of the Omni Group.
Indie Dev need to start collaborating. Survival depends on it. Yesterday I opened an app that does the text over images thing. First thing I saw was a “Pro” subscription for $9.99 per month. WTF. You think your commodity app is worth 120 dollars a year? More than I pay Netflix. You are not Adobe.
Some of these Dev are in La La Land.
this argument is ridiculous, and is just a way to find someone to blame.
There are VASTLY more successful, independent developers now than in 2007. Before then, I was buying $40 apps on SD cards to stick into my Palm Treo. Indies could never afford to produce those and get on the shelves at CompUSA.
How is Apple (or Microsoft/Google, etc) to blame for App Store pricing? Developers set the price, not the distributor. Developers brought this on themselves by racing to the bottom to get users. Nowhere does Apple say “your app needs to be 99 cents”. It is a choice made by the developers (or the company that employs them)
A 30% cut is a lot, but it’s a helluva lot less than it used to be. Back when TUCOWS was distributing Windows CE software, the devs got 30% of the sale. Now they get 70%. I’d argue that they should get 80%, but running an App Store isn’t cheap. There are App Store devs, editors, testers, graphic designers, etc. There are hosting and bandwidth costs, there are taxes, affiliate fees (less than they were last month, sadly), the cost of improving the FREE developer tools, and a thousand other things that the 30% pays for.
I don’t blame FedEx that Amazon keeps prices so low, and developers shouldn’t blame Apple that App store prices are so low. If you want to charge for an App, make an app worth charging for. I have paid a LOT of money on apps from Omni, Agile Bits, Smile, and other companies that make software worth $20-$50.
There really isn’t a lot tp process. Gemmell’s piece is one big whine. Nothing is the developer’s fault, it’s all someone else.
Are there things that Apple can do better? Yes. Upgrade pricing for one would help a lot. Several of his points are like this and Apple could help out in those areas.
But most of the points are the same developer complaints that ignore business reality. Inability to sell from other places aside from the App Store? Yeah, and how will people find those other places? If you could sell an iOS app from your website it’s not like you’ll make vastly more money because no one knows about you. You would have to market yourself, drive traffic, convert traffic… etc. Is there some App Store rule preventing a dev from taking out something like Facebook ads to drive traffic to their product page on the App Store? No.
Pricing is tricky, always has been. Sell at $1.99 and hope for volume? $9.99 and hope that the decreased volume is offset by higher prices? Move to in-app purchases and if so for which features?
Too many devs seem to just want to code and not deal with all of this marketing, pricing and BUSINESS stuff. But guess what, if that’s the case they shouldn’t be running a software business at least not on their own. There’s more to doing so than simply firing up Xcode. Vet the market by doing some research. Plan on investing in traffic generation. Don’t bet on one app to be the only revenue for your company. In short, ACT LIKE A BUSINESS. And you still might fail. Many do.
So, yeah, there are things Apple can do. If his post had focused on those it would have more value. As it is… eh.
“Are developers in the same “fair trade” category as the miners who dig the rare earths that go into each and every iPhone?” – Where did you get the info, that the rare earth minerals in iPhones are “fair trade”? At best, they don’t source them from conflict areas (like the congo), but that’s far from “fair trade”. On the contrary, didn’t they just announce that they’ll try to avoid mined rare earth metals in the future and only use recycled material ?(Thus eliminating any trade with the miners, let alone fair one – but maybe encouraging more kids in asian and african waste dumps to ruin their health melting down used phones. Pretty sure that recycled material is not very “fair trade” either).
Btw. I’d be happy to pay double the price for a fair iPhone, and even prefer “fair trade” over “green”, but I’ve heard nothing from apple in that regard.
Not really. OpenDoc was about buying modular pieces that could be used together. iOS apps are just simple apps for the most part. There are obvious exceptions to that as well.
The app store is flooded with low quality apps that that have multiple apps offering the same functionality. Nobody is forcing people to write apps for iOS. If you choose to do so, then you should have a solid offering. If your product is no better than your competitor then you can’t complain about price. If your product truly is better, then you are free to charge what you feel it’s worth. I’ll gladly pay good money for an excellent quality app that serves my needs.
I totally agree. Nothing worthwhile is easily obtained. Those who can come up with truly useful ideas which satisfy real needs, and who can follow through with design, programming, marketing, etc. will reap substantial benefits via the Apple App Stores, as Apple has set up a great system. I also think that 30% is a fair price for what they offer.
An elitist argument. But this is about elite products.
Essentially, finely crafted apps are more worthy than less finely crafted apps. Porsches are worth more than Yugos. Obviously true if there are buyers willing to pay the difference in price.
If you make a compelling product then discerning buyers will be willing to pay more. The problem seems to be getting your finely crafted app in front of discerning potential customers.
Essentially a curation issue.
Trusted bloggers?
Which bloggers resist the shill temptation? The good review for a friend temptation?
Apple? What is the incentive for them to second guess the market?
I can’t think of too many amazing apps that have failed. There are many apps or should I say developers that have earned a loyal following. Tapbots, Omnigroup, Panic and more. I look at apps like Audiobus which is now $9.99 and probably worth 3x that to musicians. Michael Tyson earned that right more than your typical app.
I like at the team known as FiftyThree which makes Paper. They’re brilliant and clearly they make enough money elsewhere because creative apps are the ones most likely to fail IMO.
LiquidText is another amazing app that has a bright future and has gone upscale in price.
As far as bloggers. Frederico Viticci doesn’t recommend crap and devotes lengthy reviews of why he uses some apps and services. I like and respect what he’s built with Macstories.
The person that I find entertaining but nonetheless is a shill is Rene Ritchie of iMore.
Jason Snell is level headed as well.
There are too many garbage apps getting reviewed by garbage bloggers. Housecleaning must be done.
I’ll disagree on one point. At one point, Apple said they’d handle marketing, processing and hosting for 30%. The vast majority of apps are never marketed in a meaningful way by Apple now, though. (What, 99.9999%?)
So fair would be something less than 30%. I don’t know how much less.
Vision Mobiles reports that iOS developers make plenty of money:
24% or 50,000 iOS devs make between $60K and $600K p.a.
The problem is merely that the 1 Billion strong iOS platform is so much larger than used to be the case that there is so much more competition between the many more developers than there used to be.
Instead you should pity Android developers for whom the picture is not nearly so rosy. Vision Mobile reports: “It turns out that Android is not even the second best platform for revenues. Of those prioritising the mobile browser, 47% are below the app poverty line, making less than $500 and 29% make more than $5,000 per month”
”Android developers look poor in comparison with 55% earning less than $500 per month from the platform and just 19% earning more than $5,000 per month.
In fact, the revenue distribution for Android-first developers doesn’t look much better than that for those targeting BlackBerry 10 or Windows Phone either. Since the user base for Android is more than an order of magnitude bigger, this is astonishing.”
This caught my eye today: Saleforce and what they have done with the original “App Store” (you do remember that Benioff bestowed that name to Apple at Steve’s request!).. Spoiler: it’s kicking butt ’cause it embraces technology rather than treating the customer like a child… “..Apps support processes and platform, which contain components that make applications modern like workflow, analytics, collaboration and journey mapping..”
How can the current Mac App Store even dream of competing with this?http://www.technewsworld.com/story/84508.html?google_editors_picks=true
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The solution to this would be simple. The bottom price allowed should be $5.00
I can just imagine the howls of outrage from developers, users and the press about Apple not letting the market set the price of apps themselves if they were to implement a minimum app price.
I’m afraid app developers just need to understand that the App market is now a mature market where there is plenty of money to be made (witness the 8% of iOS developers (17,000 devs) generating greater than $2.4 Million annually), but, as a result, plenty of competition too.
The minimum would be set to retrain the buyers. Everyone would assume a $5.00 app would be sub standard so they would look for a higher priced app in the category. The point being the user now has to pay something and would no longer expect ads or trickery.
App sales and of course app usage would plummet as a result.
In the real world, there are thousands of business models that rely on free apps as a portal into a business or service without any ads or trickery being involved. For example, Banking apps, Airline apps, Taxi apps, etc. The business makes its money through the separately charged service – not through the app purchase.
A set minimum app price would simply reduce usage of these apps – the last thing those businesses and users would want.
Actually the app developers would welcome this change. The difference between $5.00 and free would make no difference to those purchasing the apps you mention and of course the utility of the app would easily be worth $5.00. Most people do not want to be tracked and or be shown ads and would appreciate the ability to just pay up front. It’s the developers that choose the race to the bottom which eliminated any opportunity to stand out from the crowd and leads to underhanded marketing strategies by some that taint everyone and it is actually very difficult to add in-app purchases and display ads which of course do not add to your apps utility.
I’m sorry Duane, but that is not how the world (or App Stores) work. There is an immense drop-off in custom between the number of users happy to download a free app vs those willing to pony up $5.
What you also need to realise is that developers make money from many more sources than just App Store sales as Vision Mobile reports:
TOTAL = $420 Billion dollars generated by the App Economy in 2015, more than 10x as much as generated from App Store sales alone.
Your proposal just doesn’t hold any water I’m afraid.
Raising the minimum price from 0 to 5 dollars would not effect these revenues. Starbucks does not offer Free Coffee.
Yet Taxi companies provide free apps and still pay their developers to write apps to drive revenue from fares.
Airlines give their apps away for free and still pay their developers to drive revenue from airline tickets.
Business software companies give away their apps for free and still pay their developers because they derive their revenue from their back-end Cloud Service subscriptions.
What about these models do you not understand?
I think both developers and customers have respectively voted in meaningful ways, as reflected in the App Store’s consistently rising statistics for years now, and any sort of quibbling over rates is rather pointless. Apple is and has been effectively saying, “Take it or leave it.” All things considered, their offer is far from “unfair.”