Mobile Apps Pricing: The Gravity of the Situation
In the past week, a new Twitter client has been creating waves around the web. And for a change, it isn’t an iPhone app but rather Gravity, a S60 Twitter client.
As a Nokia 5800 recently landed in the Taptu office, like a magpie I picked it up right away and installed the application to find out what the fuss was all about. It turns out to be one of the most polished apps I’ve used on an S60 device, and while I still feel like I could attack the 5800 with a nail gun* – being used to the smooth iPhone experience – I can appreciate that apps of this standard could change the landscape for app stores outside of Apple’s world.
But what does it take to become a mobile application developer?
Choosing a business model
The first decision an indie developer must make once they’ve decided what kind of application to build is whether or not to try to monetise an application. Some reasonably good apps have been released as complete freebies by generous geeks who create them as experiments but we’ll leave those out of the equation for the time being and look at those who do wish to make a bit of money from their labour.
Developers must make the decision between two models; ad-funded or paid-for software. Each have their pros and cons, and in the case of the soon-to-be-released Taptu iPhone app, we have opted for a free service, supported by relevant ads to make the app as accessible to all users as possible.
Some, like Iconfactory’s Twitterific for the iPhone get their pie and eat it by using both models; they offer two versions of the app, a free ad-supported one and a paid one.
The price is right… or is it?
Choosing the paid-for model brings up the ultimate question: What’s the right price for my app?
Each market has behaved very differently on this front; the majority of iPhone apps cost peanuts, but can often be monkey work. Other apps, like Things cost $9.99 (£5.99) but buyers generally feel it’s worth every cent. Most, however, opt for the “safe” $0.99 to $2.99 window.
Outside of the iTunes Store however, it’s still a fairly Wild West. With Nokia’s Ovi Store not yet launched and rumours of central app stores for other mobile operating systems, there are fewer precedents set and fewer apps up for comparison. There are great apps for non-iPhone devices, but the lack of centralisation makes it much more difficult to find, buy and install. In response to that issue, some fans have taken the issue in their own hands; Symbian-Guru, a blog dedicated to news surrounding S60 devices, has set up its own S60 app store, for example.
James Whatley shared his views on the pricing of Gravity a few days ago:
“The market has changed folks. Dramatically. And as much as I’m loathed to say it, thanks to the iPhone App Store and more recently the Android App Store, consumers (normobs if you will) are used to paying £0 – £3.00 for their applications. Anything more than that is an indulgence at best.”
Sustainability is key
Looking at the sub-£3 ($4.50 or so) applications published, one must wonder how many apps a developer needs to sell to cover basic development time, let alone make a profit to justify continued development?
Assuming that an application is sold for a round ol’ $5, sold in the iTunes App Store, $1.50 is taken by the middleman, leaving the developer with $3.50 before the taxman requests his share. He then provides ongoing support, answers questions like “I don’t know how to plug in the cable to my phone, how do I install your app?”. For a market like the iPhone, with an App Store very conducive to buying and standard hardware setup, there is potential for a developer to break even, or even make some pocket money, but what about S60 and other platforms where users have to pro-actively hunt down software and sometimes don’t even know 3rd party software IS available?
Gravity developer, Jan Ole Suhr, says:
“Mobile software is viewed as offering lifetime updates, unlike desktop software where upgrades are often paid-for. While developing new features and improving the software constantly, the developer only earns revenue from new customers. It leads to a cycle where developers offer free upgrades, they run out of steam when the app brings in only a trickle of income. As a result, they can’t justify the time it takes to fix or improve the app, it falls in disrepair, users complain and say that apps are generally of poor quality.”
The cheap-as-chips iPhone mentality has set expectations that mobile software should be free or nearly so, yet no one expects desktop software companies to sell their app for $5, do they? We keep wishing for mobile devices to be more like computers, with more functionality; this means more time and effort for the developers behind it. In short, developers are people too.** People with bills to pay and a job to do.
Expectations for the future
While I strongly believe there is a market for high quality paid apps for all mobile platforms, I think we’ll be seeing a division in the future; cheap, fun but disposable pieces of software and quality, durable and highly maintained apps.
Each will have its place in the market. Productivity, communication apps and high-end games will most likely be sold at a premium, while disposable, silly apps will go for the price of a chocolate bar.
James Pearce hits the nail on the head by saying:
“Anecdotally? I would say they deserve someone’s 7 pounds more than a crummy British sandwich shop does for a soggy roll and coffee. It’s adding major functionality to a device that cost almost 3 orders of magnitude more. Good software ain’t cheap. (Soggy rolls should be)”
This is the direction I expect to see paid mobile software take, alongside the ad-supported applications. I keep my fingers tightly crossed that, learning from Apple’s inviting – if imperfect – App Store, the other mobile platforms will release useful, user-friendly app stores in the next few years, making it easier than ever for users to get their mitts on interesting applications.
[* Rest assured that this view isn't shared throughout the Taptu office and others are giving the 5800 plenty of TLC]
[** Might get a tshirt printed with that on... Or does it already exist?]
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April 6th, 2009 at 4:15 pm
Liked the post. It has been quite interesting seeing the discussions/arguments, and comparisons between the Gravity app launch with, similar iPhone app launches.
At the moment there will always be comparisons with Apple iPhone. They have set such a high standard. As you correctly point out in your post, one of the reasons for cheap iPhone apps, is the strength of their app store, which enables a quick and easy route to market.
The Gravity app is of a very high quality, I’m sure everyone who has tried it will agree, most importantly it’s a high quality native app. Sure there are competing web apps and java apps, but no many actual native twitter apps for s60 wich through updates can leverage more processes in the device OS.
The funniest point of all is the fact that, with the latest beta update, there is now support for groups which, if I’m not mistaken, is only offered by desktop app: Tweetdeck. This makes gravity the most powerful mobile Twitter app on the market currently…a snip for £7.
April 6th, 2009 at 6:50 pm
Interesting post. If I might take up a couple of points.
“I keep my fingers tightly crossed that…. ..other mobile platforms will release.. ..app stores… ..making it easier than ever for users to get their mitts on interesting applications”
Damn right. In 18 months of owning a Nokia N95 I bought only one app (Quickoffice when it was reduced to a bargain $1). In less than 6 months I’ve spent 20x that. It is the power of a store.
I have to say this in caps I AM NOT A HUGE APPLE FANBOY OK. But if other platforms are so difficult to deal with development and do not have a useful portal to get to customers then they will lose more and more to Apples, controlling, restrictive platform. The average user just wont see it that way
BTW. I predict that many more apps will become cheap or free under Apples 3.0 Firmware, but with mriced upgrades and enhancements. Pretty smart once again.
“no one expects desktop software companies to sell their app for $5, do they?”
No but I don’t expect the average person to upgrade their PC once a year at the end of a contract & if they did they could normally take their software with them with minimal fuss. Desktop apps normally have hours, months maybe years more development and features and sell to businesses. At home much software either comes with the OS, has home/student pricing or increasingly comes free via open source.
“…disposable, silly apps will go for the price of a chocolate bar.” maybe not just those apps, and what is wrong with that. I understand that one disposable silly app (ifart) was making its owner £9K a day. Another £1.49 game app generated approx £500K as did a clock (source Wired May 09 edition). That may be at the extreme end of the market, but looking at Twitter if you could sell an App to eveyone of Stephen Frys followers, let alone the gazillion other users for a $1 you may not be able to retire, but you might do OK.
April 15th, 2009 at 11:59 am
s60 users who hunt down an application are aware how to install a mobile application. however they don’t like being fooled. I recently downloaded an egg timer which was supposedly freeware. It worked and I was allowed to use it exactly one time before i was asked to buy it for 5 euros (!?)
I will give the Twitter client you mentioned a try and will buy it if it blows me away UPDATE: just saw the price and I will not spend USD 10 on a twitter client.. I would have spent 3!
April 16th, 2009 at 10:07 am
@Andre: I agree that S60 users who know to look for apps will be aware of how to install an app. This is, however, a tiny fraction of the number of S60 device owners.
By Apple sticking the app store in the user’s face, it’s effortless to bring this whole new audience into the world of mobile purchasing. If S60 devices did the same as smoothly, there would undoubtedly be a thousand times more buyers for the apps!
Until that stage, the only way for an app to be even vaguely viable as a revenue-yielding product for the developer, is by having a somewhat higher price per unit.
@WaveyDavey: I’m with you on iFart, the clock and all those other amazingly simple apps that made big bucks for their owners. But again, it was sheer volume of sales, not unit price, that made them “rich”. If every single platform could provide app developers with that immense, purchase-happy clientele, people would develop for all platforms as actively.
Also, re: upgrading yearly: Apps like Gravity allow you to carry the license to your new phone. Simply email the developer who’ll update the IMEI to which your license is assigned. It’s a breeze!