Comments on: The Beauty Of 99¢ iPhone Apps

By: Jens Alfke

Jens Alfke — Mon, 15 Sep 2008 04:27:12 +0000

Nancy — Not that this is an iPhone support forum, but: the apps get billed to your iTunes account (just as if you bought music or videos). It has nothing to do with AT&T.

By: Nancy

Nancy — Sun, 14 Sep 2008 08:09:50 +0000

I am new to iPhone and at&t wireless and can’t find an answer to my question. Maybe someone here can help. If I download a game app (ie $9.99 Solitare)from iTune and put it on my iPhone, how will at&t bill me to play that game? I’m curious because I am overseas (Africa), and don’t want a big at&t bill. Does anyone know the answer and how to make certain AT&T or their overseas partner carrier are not billing me? thanks. nancy

By: Jean-Pierre Martineau

Jean-Pierre Martineau — Thu, 20 Mar 2008 18:35:44 +0000

This is one of the most interesting blog posts I’ve read in a long time…

I think that the realistic price point will be something along the lines of this:
- Toy applications: 0.99 to 1.99
- Simple games and utilities: 1.99$ to 4.99$
- Nice, content-rich games and small to medium useful apps: 4.99 to 9.99
- Full fledged applications (like Quicken): 5.99 to 24.99
- Corporate applications: 19.99 and up

Although some developers will attempt to undercut competing applications, it’s a matter of economics. A careful analysis of the elasticity of the demand will yield the price point sweet spots and undercutting will simply result in missed opportunities.

I think that for simple applications and toys, demand will be very elastic, but for more complex applications, the elasticity will diminish.

Anyone considering releasing an iPhone should read this very interesting Wikipedia article that explains the concept or the elasticity of the demand very well.

By: Sudhakar Moparthy

Sudhakar Moparthy — Sun, 16 Mar 2008 00:03:05 +0000

For all those apps that store data on a server , you still need to maintain your database. I doubt people will price their app at $1.

By: Talk Funnel » Blog Archive » The impending iPhone application traffic jam

Fri, 14 Mar 2008 04:50:18 +0000

[…] Another question will be that of pricing. Jens Alfke has floated the idea of $0.99 applications (to mimic the iTunes music sales). It’s customary on the desktop to have a ‘try before you buy’ period. Since Apple is going to be in charge of distribution and licensing, they’re going to have to be the ones providing the infrastructure for timed trials. […]

By: iAppblog » Blog Archive » Interview with Kenneth Ballenegger on the iPhone SDK

Thu, 13 Mar 2008 19:35:38 +0000

[…] What do you think of this $0.99 and $1.99 app concept? I read an article recently on this (The Beauty Of 99¢ iPhone Apps). The good thing about $.99 apps is the potential for impulse purchases. People will not be afraid to buy an app, because, after all, $.99 is nothing. If the app were priced more expensive, potential customers would have to think about whether they really want to buy the app. With the inability to offer try-before-you-buy, it will be harder to sell a more expensive app. Of course, there are problems with $.99 apps. Firstly, it devalues your product. People will associate your product with the notion of “cheap”. I think the better option would be to price apps between $5 and $10. It is still low enough for impulse buy, but increases profit 5-fold and adds perceived value to the product. […]

By: Ramin

Ramin — Wed, 12 Mar 2008 19:34:23 +0000

@Jens: I agree that there’s a good opportunity for small developers ;-)

@Martin: $5 does sound more reasonable for a functional entry-level app or game.

The $0.99 a song puts a full album of 10-13 songs in the price range of what a discounted CD goes for in the store, so price-wise, it’s in line with expectations. The $.99 application, however, would match up with what you would expect from the discount bin at CompUSA. And even though it might be enough to sustain a single developer working at home, it won’t pay for office space, network, and salaries once you scale up to 2-3 or more developers. So the app price is going to have to be high enough to help cover overhead and support costs.

Fully functional mid-range software, I’m going to guess will be in the $30-$50 range to help cover the cost of development and ongoing support. That also gives you room to offer discounts, volume deals, and coupon specials. If you start off at $.99, there’s not much room to go down.

As for the $100M iFund. There will be a lot of applications that will require back-end server support (surely, with a live 2.5G/WiFi connection sitting there you can’t expect every app to be standalone ;-) The iFund is probably targeted at people who need to put together a team of developers and get all that infrastructure in place. Hopefully, it won’t all go for enterprise-type apps and they’ll reserve some of the money for people doing fun projects.

By: Harry Flashman

Harry Flashman — Mon, 10 Mar 2008 18:44:01 +0000

Remember the old Lemonade Stand game on the Apple IIs? This will all shake itself out, but it’s going to take a few tries to figure out what price will generate the volume to maximize profits. Pricing your app too low, will result in a missed opportunity…too high and you’ll just cripple sales. It will be an interesting time to watch this OS X Touch based market flesh itself out.

By: Noah Witherspoon

Noah Witherspoon — Mon, 10 Mar 2008 15:16:08 +0000

@ Steven Fisher:
142 people buying an app is hardly unrealistic. The number of people who already have jailbroken iPhones and iPods Touch is huge - I released an update to a game of mine around twelve hours ago and it’s gotten over 23000 downloads by now. It’d take all of 0.6% of those people deciding to pay $.99 for my app for me to break even on Apple’s developer charge. Jens is right – this is a huge opportunity for small developers.

By: Matthew R

Matthew R — Mon, 10 Mar 2008 07:10:46 +0000

Problem with this “live by our rule or die” approach is the fact that many apps for the Mac, we love so, because they disobeyed the HIG. And I don’t necessarily mean extreme apps like Shapeshifter, but take for example the HIG saying “don’t create your own menu bar extras. That’s reserved for the System.” We completely shrugged that off and created our own menu bar extra-apps anyway. If there was (run with me on this) an App Store for the Mac; then apps like Quicksilver and Twitterrific would have been turned down.

Apple, what happened to the “rebels, the risk-takers, the misfits” being the greatest ones of all?

Hopefully Apple will keep the iPhone Human Interface Guidelines, just that, guidelines.