Making money in a crowded App Store: it’s dog eat dog and Spy vs Spy:
And if you’re Apple? Well, Apple benefits from a crowded App Store marketplace where developers cut prices to the bone in an attempt to stand out from the crowd. Every single app uploaded to the App Store adds value to every iOS device in existence; every single app a customer buys is another reason for them not to migrate away from iOS in the future.
Apple is certainly motivated to keep the App Store busy, and sales high; these things help iOS stand out from competitors like Android. But it’s not motivated to keep prices high. In fact, lower prices for apps help to attract consumers to iOS as a platform, selling more of the hardware devices from which the bulk of Apple’s vast profits flow.
The bottom line: I don’t think it’s likely Apple will do anything of consequence to help struggling smaller devs.
(Via TUAW – The Unofficial Apple Weblog)
First things first. This is a great post by Richard Gaywood that every iOS app developer should read. And he’s right; we need to be having conversations about this. My talk at 360iDev on this subject is meant to stir up this conversation further, as I think it’s one of the most important topics facing iOS developers today.
On the above quoted point, I have to say I agree that Apple is motivated to keep prices low and keep competition fierce on the App Store. But there’s a limit. If prices drop down to the point where the only people who can make money on the App Store are venture-capital backed startups and giant software companies who don’t care about losing money for years, then iOS as a platform will stagnate and die. A platform full of casual games and one-trick pony apps doesn’t get to take over computing the way Apple wants the iPad to take over computing. The iPad needs desktop-class apps to fulfill its destiny as the post-pc laptop replacement. To make it hard for indie devs to be able to make a decent living making great, deep software would be extremely shortsighted on Apple’s part.
Apple will be left in the position it was in back in 1997; not enough good software to keep users interested in the platform. It’s a nightmare scenario that sounds ridiculous today, but could easily become a reality in a few short years if Apple isn’t careful.
Apple’s best interest has always been for there to be lots and lots of small companies thriving on the App Store. That way, no one company can ever gain too much power over Apple. It’s working fine now, even though most devs are going belly up, because there are still enough people out there who are green enough to think they can strike it rich overnight. Once the word gets out that developing for iOS is a crap shoot at best, those devs will move on to some other platform to get rich quick. And whoever is left will determine how well the App Store does long term.
But it’s also important to note that the 99¢ rush wasn’t all Apple’s fault. True, the ranking system led people to lower prices at a feverish pace. But that was the lazy way out. Who decided that the top sales charts were the only effective marketing strategy for apps? Instead of investing in getting the word out, taking marketing into our own hands on the web and everywhere else, we all relied on that one chart as our only tool to get noticed. Lowering prices couldn’t have ended well, as price is a weapon we all have in our arsenals. We had a perfect model in the hardware industry to teach us that lesson. PC makers raced each other to bankruptcy to cut margins to almost nothing while Apple concentrated on the high-end, profitable sector of the business. Who won that battle?
We’ve been fighting each other when we should be working together to produce a fair market with reasonable prices. Four years of the App Store now, and there still aren’t good resources for finding apps or marketing apps. Most dev strategies for marketing boil down to make the app free, climb the charts, hope Apple features you. Or pay people for reviews. Pretty lame plan, if you think about it.
People aren’t cheap; we sell enough copies of our $14.99 Teleprompt+ every day to convince me that there are still some people willing to spend a bit of money on something good. You just have to break through that trust barrier. People don’t know who you are; you’re asking them for money, which is a risk. You don’t lower the risk by giving them something for free and then figuring out a way to milk them for money later. You gain their trust by showing them how great your product is, and by sticking to your pricing strategy. Nothing says “I’m full of crap about how much my app is worth” like a sale.
And no, you won’t be the next billion-dollar Zynga or Rovio. But get over yourself. Make a living and be ready to stay in it for the long haul. As long as that’s possible, and some people put in the work and have the patience, the few devs who soldier on and stick it out can do well enough.
