And so, with the death of the restrictive terms in the iPhone development non-disclosure agreement and the refinement of customer reviews, everything at the App Store is peaches and cream, right? No problems to speak of?
Really, come on: you should know better than that. While those issues certainly affected developers and their business, they were hardly the only impediment coming out of Cupertino. There’s the still-mysterious application approval process, for one. And, for another, the fact that the store has been inundated with 99-cent apps.
That’s a problem? Doesn’t it just mean inexpensive apps for all of us? Well, on the one hand yes, but the fallout has farther-reaching implications. Iconfactory developer Craig Hockenberry, the man behind iPhone apps Frenzic and Twitterrifc, penned an open letter to Steve Jobs on the subject of what he dubs “ringtone apps” and his concern that they're affecting business for other developers. (Hat tip to Philip Elmer-DeWitt of the Apple 2.0 blog at Fortune.)
The problem, as Hockenberry sees it, is that low-cost and free apps climb to the top of the charts on the App Store due to their low price and high volume (glance at these charts compiled by Edible Apple and you’ll quickly see that 99-cent applications outstrip any other price point). It’s much harder for a higher-priced app to get the same level of exposure as a 99-cent application; that, in turn, means that it’s harder to justify the higher cost of developing a more complicated, more expensive application.
But what happens when we start talking about bigger projects: something that takes 6 or even 9 man months? That’s either $150K or $225K in development costs with a break even at 215K or 322K units. Unless you have a white hot title, selling 10-15K units a day for a few weeks isn’t going to happen. There’s too much risk.
Hockenberry goes on to point out the symptom of the situation: that people are buying applications based on screenshots and reviews alone, without ever trying them, as they might on the Mac. And it’s much easier to drop $1 on an application that might turn out to be disappointing than it is to drop $5 or $10.
“Lower your prices and make up for it on volume,” some might advise. But Hockenberry’s concerned that even that may have a limited lifespan: there are more than 10,000 applications on the App Store now, and the number’s only growing. Getting into the coveted top 100 list is going to be increasingly difficult as the overall volume continues to rise.
Hockenberry isn’t the first developer to raise these concerns. Last month, PCalc developer James Thomson changed the name of his app to improve its ranking in search results. He also posted on how a major update to his iPhone app didn’t translate to many new sales.
So how does all this affect the platform as a whole? Surely a huge volume of apps to choose from is a good thing. To an extent, of course: I mean, if all you had to choose from in the grocery store was junk food—which sometimes seems to be the case nowadays—your kids might be thrilled, but it’s not really stretching the boundaries of cuisine.
And thus the real concern: what if nobody ends up developing the killer app for the iPhone because it’s too risky for to invest the time in it?
So what’s the solution? Hockenberry hands it to Jobs and his team to figure out. Daring Fireball’s John Gruber suggests a weighting system for the top app lists, based on how much the app costs. Personally, I think a more substantial overhaul of the App Store interface might be called for, especially since the whole thing is built on top of a system that was originally designed for selling music, not software (reviewers of software were even called "listeners" for several months). The software market is very different from the media market, and Apple needs to look into ways to make the App Store reflect those differences.