Josh Lehman: ‘Stop Using the Cup of Coffee vs. $0.99 App Analogy’:

If Starbucks gave out free coffee every day there would be mile-long lines at the drive thru. If the free coffee was anywhere close to as good as their paid stuff people would abandon the paid en masse. Some would pay maybe because they felt bad, as a freeloader. Others would pay because they preferred the options available to them in the paid column vs. the free. Now imagine the free selection at starbucks was nearly as large, or larger, than the paid selection: Welcome to the App Store.

(Via Daring Fireball)

Yes. And that’s why Starbucks doesn’t give away free coffee. Because they have business sense, unlike most small indie developers who think they can jump into the free market and survive.

Some places do give away free coffee, by the way. But people keep going to Starbucks, anyway.

I’d like to know how many “free” apps this guy has fed his family on over the past five years.

Fact: just because some companies with a lot of funding give away free apps, that doesn’t mean that all iOS users don’t want to pay for anything. And it certainly doesn’t mean that you as a small developer should feel it necessary to underbid your competition with your app.

There are more free alternatives than not in the App Store because of bad business sense. Not because free apps have some inherent value, or because those free apps make selling an app for a price an impossibility. A few apps do a fine business with the free model. Most don’t.

650,000 apps on the App Store. And we keep making our pricing decisions based on 25-100 of them.

Fact: there are a lot more free and 99¢ apps on the App Store making no money than ones that are making good money. By a couple of orders of magnitude.

When competitors have unsustainable business models, you’re better off sticking to your guns and waiting for them to die. Raise your price and appeal to a more discerning type of consumer. Or drop out altogether and find another market. But lowering your price to their level is only going to bankrupt you.

I guarantee that if Starbucks did give away free coffee, they would have those long lines like Josh describes here, but the small artisan coffee shops would keep on churning out their modest profits without missing a beat. Because here’s the kicker: people who like good coffee would rather pay more for good coffee than be caught dead in Starbucks at any price, free included. There are customers for every product who actually want the high-priced stuff, even when it comes to software. We sell our apps to them daily. The trick is to find them and then show them why your app is worth more.

Fact: not all apps should be the same price. Fart apps and other stuff you tinker with for five minutes then erase, sure. Those are throwaways and should be priced accordingly. But apps like Omnifocus, iDraw, AmpKit—these are in a completely different class. And users need to be educated on the fact that those types of apps cost more to develop and maintain.

The problem isn’t that there are free apps and 99¢ apps and $15 apps. It’s that customers are being conditioned to treat them all the same. That’s a problem of sales and marketing, not price.

No one in his right mind wouldn’t understand that there’s a difference in the cost of making a paper plate vs. a ceramic dinner set for four. Yet many users don’t know how much longer a full-featured vector drawing program takes to create than a fart app. That’s our fault. But giving away the drawing program for free isn’t going to help. It’s going to further reinforce that ignorance.

All too often the solution I hear is to drop the price, rather than dig in and make the sale. And when developers realize they can’t develop meaningful experiences at that lower price, they build something oversimplified. And so we get an App Store that is overburdened with throwaway items, instead of overflowing with awesomeness.

So yeah. In that regard, I agree. Don’t complain that your customers waste money on crap coffee but won’t pay for your app. At the same time, don’t go and make an incredible app and then undervalue it just because most apps are undervalued. At that point you’re only contributing to the problem.

Instead, show customers how crappy their coffee is and how much better an investment your app would be. You have a web site. You have a blog. You have Twitter and Facebook. Go out there and sell.

But don’t tell me I need to learn to “understand how to make money on ‘free’.” I most certainly don’t.

Update: For the record, Josh Lehman contacted me via Twitter and informed me that he has in fact fed his family on the proceeds from at least one of his free apps. Good for him, and shame on me for being a little too snarky with him. I stand behind my position, but he’s a stand up guy, and I don’t completely disagree with his article. It’s great that more of us are talking about this subject and arguing about it.

FaceTime over cellular from AT&T will only be available to Mobile Share customers:

Customers who stay on a grandfathered unlimited plan or a tiered plan will be limited to using FaceTime over a WiFi connection. 

(Via TUAW – The Unofficial Apple Weblog)

Not to be a jerk, or anything. But duh. You really thought AT&T was going to allow unlimited free long-distance video calls over their network?

I’ve been telling people for years that holding on to an old grandfathered unlimited plan was a waste of money. If you are only using 2-6 GB of data every month (which most people are), but keeping the unlimited as a “future proof” strategy, you’ve been spending more money every month for nothing. And sooner or later, when it really mattered and you really DID have some new feature that would eat up much more data, AT&T was going to pull the rug out from under you, anyway.

The house always wins.

I thought it would be 4G (the real 4G, LTE, not the nonsense “4G” that AT&T gives us now) that would spell the end of unlimited data for all. Now it looks like FaceTime over 3G beat it by a few months.

Pay your early cancellation, if you want, and move over to Verizon or somewhere else. That’s your right. But don’t be surprised that AT&T wasn’t going to give this one away for free just because you’ve been loyal. That’s pretty naive, you have to admit.

Apple’s retail focus should be on customers, not cash | Macworld: “When I worked the sales floor, we were told to listen to our customers. To find out what they needed. To resist the urge to push a sale. If they needed five visits to decide to buy a computer, then visits one through four would be about answering every question they came up with, assuaging their fears, and—above all—making them feel at home. A manager of mine once told me, ‘The Apple Store is a place to ask questions and find out how a Mac fits into your life. The fact that we sell the computers is just gravy.’”

(Via. Serenity Caldwell, Macworld)

My experience at Apple Retail in the earlier days was similar to Miss Caldwell’s a few years later. There was already a growing sense of tension that the bean counters were getting us further and further away from our original mission, but by and large, the immediate supervisors—the store managers and assistant managers—always wanted us to focus on the customers. The sale was always secondary. That’s why no one was working on commission.

I keep thinking about that famous meeting where Steve Jobs berated members of the retail industry, telling them they had made buying a computer as crappy an experience as buying a used car. The Apple Stores changed all that. Sure, you want the Stores to make the company money, but in those early days, profitability wasn’t even a necessary goal. The Stores were going to do wonders for the brand, regardless of how much money they made.

The Apple Retail Chain is a product. Just like the iPad, or the iPhone, or the Mac, it needs to be designed to be the best possible product.  Sure, you can make more margins on that product with careful tweaking of the parts, but you don’t start making iPads out of cheap plastic just to save a few bucks. That’s just not the Apple way.

Hopefully this kerfuffle will be a wakeup call to upper management.

Phil Simon: Dream Theater’s Jordan Rudess Talks Music Apps: “There are so many people out there with Android, and I know that it’s a really good system. Personally, I’ve had some problems with it — and that’s why I took so long to get into it and am not anxious to keep working on that platform. First, there’s been an inherent issue with the audio on Android, which has been frustrating to a lot of developers. When you touch the screen to play a sound, there’s a delay, which destroys the reality of the musical experience. It’s a latency issue. Obviously the people in charge of Android’s release overlooked this. It’s a problem that’s definitely preventing some of the music developers I know from wanting to create apps for the platform.

The other problem with Android is, as far as I’m concerned, that the systems aren’t set up to allow for a solid business. Android piracy is rampant. For example, we put out a really cool Android version of MorphWiz Play (even better and easier to use than the one on iOS). But, according to the numbers coming back to our company, it’s being ripped off right and left. Android employees need to create a system that’s fairer to developers.”

(Via huffingtonpost.)

But Android is winning, right?

People think the details don’t matter. But they do. It’s not just about iPhone vs. Galaxy whatever. People say “who cares?” when I talk about how much smoother and responsive scrolling is on the iPhone. Well, here’s a perfect example of why cutting down on latency is extremely important.

And don’t get me started on the App Store vs. the Android Marketplace. It wasn’t easy to make the App Store a place where both customers and developers could make out well. But that good balance makes all the difference, and it’s obvious when you try and find a good app on the Android Marketplace.

I love all of Jordan’s apps. Love that musicians are finding more and more innovative ways to create music with technology. And I’m happy that he can make some extra bucks on the side from building quality apps. His experience with Android is the reason most of us never bother trying to write an app for Android and probably never will.

Apple bashes Amazon and proposed ebook settlement — paidContent:

“In all, the Government met with at least fourteen Amazon employees—yet not once under oath. The Government required that Amazon turn over a mere 4,500 documents, a fraction of what was required of others.”

(Via. paidcontent.org)

Remember back in April, when I said the DOJ case against Apple regarding eBooks seemed like it was authored by Amazon? Yeah, looks like it just about was.

And now they’re trying to force Apple into a settlement, though Apple wants to go to trial. So much for due process.

There’s some seriously screwed up stuff going on lately with our justice system here in the U.S.