The Agony of Paying for Apps

January 9th, 2012 8 Comments

Before the New Year, I ran across two separate posts about free apps, and as with many of my posts, this coincidence got me thinking and writing.

The first was by Dan Ariely (h/t Slashdot), who writes about economics and stuff, two of my favorite topics. Plus, he referenced a favorite Oatmeal comic of mine, which also conveys the angst I (and others apparently) feel about dropping a dollar or two to buy an app for our vastly more expensive devices.

I tried to find the right excerpt from Dan’s post, but I found myself copying half the post. Just go and read it.

His basic point is that Apple anchored the price at free (and populated the App Store with some pretty compelling apps at that price point), thereby creating a low price floor anchor that has affected all the apps that have followed.

A few days later, Simon Judge mused about a report that shows the App Store going the way of the Android Market, i.e. free apps growing at the expense of paid apps. The big question for iOS developers is why.

One question is why people won’t pay for apps. Alternatively, are developers at fault having lowered their prices to the point they have reached zero? I believe the main problem is that most apps actually have very little value. Most are ‘information’ apps that just provide a more convenient way of viewing things that are already available free via web sites. Dumbed down apps have resulted in dumbed down prices.

But what about apps that that do have substance? Examples are navigation, medical reference, office and substantial drawing apps. The problem is that these apps take a significant amount of development effort. Even at say 10x the price of a ‘dumb app’, it’s difficult for them to be financially viable. As most apps cost close to zero, many consumers think twice before purchasing the more expensive apps even though they are a bargain compared to their PC or Mac counterparts.

The second point is further bolstered by apps like Google Maps on Android, which is a full-blown, turn-by-turn navigation app and is one of the must-have/can’t-live-without features of Android. If you’re Garmin or Tom-Tom, why even bother to build an Android app? On iOS, maybe, but even there, some apps are well below you in price, including MapQuest which is free. So, even if you want to build a substantial app, you’ll most likely have competition.

Matt (@topperge) covered the topic of useless apps (a.k.a. apps of little value) years ago, and a quick look at the App Store confirms this hasn’t changed much. This observation bleeds over into two related ones: first, it’s too easy to create and distribute an mobile app, which drags overall quality down and second, the App Store and Android Market are both hot messes where you can’t find anything useful.

Anyway, lots of food for thought in there. I wonder when mobile apps will peter out due to all the above factors, or will Apple/Google figure out a way to alleviate these issues.

Find the comments.


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8 Responses to “The Agony of Paying for Apps”

  1. Anonymous Says:

    I have a theory that there are so many free apps that there’s almost always something “good enough” for free. Add to that that occasionally that if you buy an app and it’s a total turd there’s no way to get your money back, so you constantly feel cheated.

    Which is why i always like to see an in app ad plus an in app upgrade to remove the ad.

  2. Gary Myers Says:

    Open Source has also contributed to the whole ‘Why should I pay for software’ thing. 
    I remember when you used to BUY a web browser…..

  3. Jake Says:

    That’s an entirely different case though. Open source exists for different reasons. Apple made apps free to build its own ecosystem and collect developer money, e.g. $99 per year to deploy apps to the App Store, and first and foremost, sell its pricey devices.

    In theory, open source is not for profit. In practice, your results may vary. I also don’t recall open source being too easy, lowering the overall bar for projects.

    Not the same thing at all.

  4. Jake Says:

    Agreed, returns are fraught w problems. The in-app purchase has become the way to “sell” apps in the App Store, which is why so many apps are free. It’s the new version of try and buy, not all bad.

    The Android Market has in-app purchases too, but I’ve heard Google hasn’t fixed issues that prevent devs from getting paid. You buy and get charged, Google presumably gets its piece, but no money goes to the dev. Dirty little secret I’m hearing more about lately.

  5. joel garry Says:

    Well, I wonder if Gary is referring to NavCIS or TAPCIS.  I believe I still have a 5.25 floppy…  http://www.tapcis.com/

  6. Gary Myers Says:

    It went through what we’d probably call a public beta phase but then had “evaluation” and “commercial” versions. A lot of home users used the evaluation version for an extended period, but companies did pay.
    http://en.wikipedia.org/wiki/Netscape_Navigator 

    But a lot of home users got used to free browsers, email clients, word processors, utilities and widgets. If it is available for free on a PC, you’re not going to be able to charge a lot for a mobile version.

  7. Jake Says:

    Interesting, these put me in mind of another post I’ve been meaning to write.

  8. Jake Says:

    There’s a difference btw companies and home users, and apps obviously fit the latter case. Sure, free has always been the intertubes’ price point. Apps simply underline this classic problem.

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