My official talk from Mobile Conference Europe 2015 is now available online. My topic was “Design as if No One is Watching.” A bit of a call to remember who we work for as designers building great products on teams.
It was incredible to take part in this conference back in February. Highly recommended, if they do it again next year, that you consider attending. Special thanks to Jarek and the whole team over there for making it a wonderful experience.
One thing that sounded odd at the unveiling of Apple Watch last September was the way they introduced the three different collections. If you watch the video with the Jony Ive voiceover, you’ll see what I mean. First, Apple Watch. Then Apple Watch Sport. Then Apple Watch Edition.
Notice they didn’t present them in the order of price, as we all know by now that Apple Watch Sport will be the “cheap” option, and the Edition, being made of gold, will be the priciest. But rather, they introduced Apple Watch first, and then the other two, as if the latter two were both variations of the canonical Apple Watch collection.
I didn’t get why Apple Watch collection didn’t get its own separate name and why it was presented first until I thought about it in terms of brand identity. Clearly, Apple Watch is the one Apple wants most people to buy.
Sport is obviously for the athletic-minded (and those unwilling to spend $1k+ on a watch, of course.) They will sell tons of these, I’m sure, and the low entry price will help grab lots of customers who otherwise wouldn’t indulge in such a device. In two or three years, perhaps, they will upgrade to the better versions. But if most people buy this collection, I think Apple will actually be in trouble. The margins on Sport have to be pretty thin.
Edition is meant as a super-high, almost unattainable fashion statement. I completely believe the estimates of several watch journalists and John Gruber when they guess the price of Edition at $10k-$20k. Almost none of us “regular” people will make the leap to that high a price, but this is the watch that George Clooney will be wearing. It’s the status symbol. Apple will sell plenty of them, don’t get me wrong. But not nearly as many as the other two collections.
And that leaves the stainless steel collection. The one with the most options. The one they show off most in pictures and videos. The one that doesn’t need a name. It’s simply Apple Watch. This is the one that will make or break the device’s success.
And it’s subsequently the one that’s hardest to guess at, in terms of price.
On the one hand, as Allen Pike pointed out on Twitter, the stainless steel version could technically be as cheap if not cheaper to produce than the aluminum Sport collection.
@gruber Yes. Steel, though, is cheaper than aluminum, and industrial sapphire isn’t pricey. $1k for the stainless model seems bananas to me.
— Allen Pike (@apike) February 18, 2015
But we all know that Apple’s middle-tier products are never priced according to the cost of materials. (And neither are watches, coincidentally.) We also know that Apple loves its high margins. Get them into the store with the “good” product, show them the “best” product to let them know how much they could be spending, then let them settle on the “better” model.
So how do you price an item somewhere between $350 and $10k? Do you slide up towards the high end and make a bet that more people will be fashion-conscious enough to want the higher status? Or do you price it a bit closer to the low end, hoping to grab more of the people who otherwise would be grabbing Sport models?
I don’t know. A range of $800-$1,500 (roughly what John Gruber most recently predicted) makes a lot of sense to me. It’s pricier enough than the Sport to make it a status symbol, yet not so crazy as to be out of the realm of what people tend to pay for nicer watches. I certainly don’t see it being any lower than that.
Would they go up to 5k? Somewhere closer to the middle of the two pricing tiers? If they wanted to predominantly sell Sport models, then yes. But as I said in my talk at CocoaLove last October, Apple’s gift is making you feel like you bought a Mercedes when you actually paid the price of a nice Toyota. They want people to give in to that desire to get the better, classier item. And they do that by being just a little more expensive, not a lot more expensive.
But this is a watch, not a computer or a phone. Perhaps all bets are off once we move into the world of fashion?
How much higher Apple drives that stainless steel collection price will be a good indication of how confident Apple is that they can get beyond functionality and appeal to people’s sense of prestige. I believe the plan is to drive as many people up past Sport to Apple Watch as possible, in order to have a much higher ASP. And that means keeping Apple Watch collection closer to 1k than 3 or 4k in my mind. But Apple may know better.
Sure, a price of 1k–1.5k leaves a massive price gap between Apple Watch and Edition. But the more massive that gap, the better for those who would buy a gold watch, anyway.
Last week, while visiting Warsaw for the MCE conference, I had the honor of also being asked to address some students at the Academy of Fine Arts. I had a blast talking with them about getting started in the indie software world.
Daniel Mizieliński, who teaches this group and invited me to speak, has released the video of my talk already. I want to thank him and his wonderful students for the opportunity.
John Saddington on the first 63 days of selling his blogging app Desk:
The bottom-line, though, is that it means that it is quite possible to “make it” as an indie developer and eek out an income that is substantive and worthwhile. I hope this report, if anything, gives some encouragement to all of those that are interested in seriously (or semi-seriously) pursuing an independent app that creates great value for users and customers.
You won’t get rich off of it (maybe, but… that’s pipe-dream stuff) but you can make a living and with a little creativity and a lot of luck you can make it work. It does work and now I know this first-hand in an intensely-personal way. I am so very, very blessed. The thought of making, on average, ~$500 a day via an app that I love is really stinkin’ cool.
But it doesn’t mean that I’ll be quitting my “day job” any time soon. This is because I really like the pace at which I’ve created for Desk and the very modest growth that I’m experienced is just the right amount of growth that I can personally handle and that I am interested in experiencing.
Desk generated $65,654.85 of revenue in 63 days. Many of us would be very happy with that level of success. Note, however, that he’s not not taking the app full-time, and he’s happy to continue with slow and steady growth.
Lest you think Apple featuring Desk as one of the Best Apps of 2014 led to all this revenue, read Saddington’s entire piece to see how he actually managed to make it happen. It’s a very active strategy that goes way beyond sitting back and waiting for Apple to do his work for him.
For instance, although the app made $65k, he spent $28k in ads and marketing materials. Let that sink in for a while. He invested almost half his revenue back into the product in the form of advertising dollars and other marketing efforts. How many of us are doing anything close to that?
One area in which I’m always ready to admit I’m weak is advertising. I’m basically clueless about this entire arena, especially when it comes to apps. But I’ve been taking notes from Saddington’s recent posts:[1]
I’m not suggesting everyone needs to set aside a giant advertising budget to succeed. But it sure looks like it helps.
It’s too early to tell what the long-term picture is for Desk, but if you look at the sales charts, Desk doesn’t look like one of those apps that will make the bulk of its money at launch. Yes, there are spikes, but there’s also growth after the spikes. Putting some money back into advertising is already paying off and should continue to do so in the long run. I’m willing to bet Saddington’s marketing skill is going to help Desk settle into a nice steady monthly revenue over the next year. As momentum picks up and word of mouth starts taking off more, the percentage of revenue he needs to reinvest to keep the momentum going should be reduced. I hope he reports back in at the end of this year to let us know how it pans out.
It’s also worth noting that Desk gets a lot of marketing (at the cost of the creator’s time, rather than money) in addition to paid advertising. Saddington blogs frequently, has a regular email newsletter, and releases short videos quite often. All of which are full of great advice for indies. Highly recommended.
Ben Thompson’s piece today about Zoë Keating is an interesting read for any indie developer. The chart alone is worth a look whenever you’re making choices about how to price your apps or services.
Immediately after reading his piece, I sent this tweet, which he was kind enough to put into his footnotes.
.@monkbent Your update today made me think of indie app devs. Most make craft beer and try to sell it at Bud Light prices.
— jcieplinski (@jcieplinski) January 26, 2015
I find it odd that so many indies want to make “opinionated” software, which by definition limits the audience, and then price it as if trying to reach the widest audience possible. This strikes me as trying to have it both ways. Either you want to target a niche, or go for scale. If you target a niche with your design and features then try and price the app for the mainstream, you’re going to have a very hard time being sustainable.
The mainstream simply doesn’t care about your high-quality, artisanal approach to app making. They want what’s free and what’s popular. To get their attention, it takes millions of dollars an indie doesn’t have.
The craft beer analogy isn’t perfect, but it does offer a hint as to how some of us might successfully navigate through the overabundance and ultra-discount dominance on the App Store.
A craft brewery like Victory doesn’t try to take customers away from Coors. They specifically target the people who wouldn’t be caught dead drinking a Coors. They are looking for beer snobs, none of whom are drinking the giant brands.
The problem is that there are few people outside the mainstream. So you have to let go of this notion of making up for it in volume. You can’t easily convert people who don’t pay for software with your amazing hand-crafted experience. But by and large, the small group who does look for that level of craftsmanship will be far more loyal, vocal, and happy to pay[1]. You just have to find them[2], earn their trust, and then charge them more for your superior product.
Easier said than done, right? Still, it looks easier to me than competing with funded startups for the attention of the fickle masses.
You’ll never make the money the big startups make, but you won’t have to. You’re paying yourself or a small team, not an office building full of people. Success isn’t about beating everyone else. It’s about feeding your family. To paraphrase Charles Perry on our podcast today, mind your revenue, not your rank.
Is there a large enough market for “craft” apps? I don’t know. But I think trying to couple a superior experience with rock-bottom prices is maybe not the best way to find out.
