Why I Wish iPhone Apps Were More Expensive

Yup, you heard me right. I wish iPhone and iPad apps were more expensive. Why? Not because I'm some rich kid that wants to hold the cool toys from the proletariat.

The Higher-End Shut Out

The simple reason is that the $.99 average price for an iPhone app is shutting out the big game/software development companies who could provide apps of a MUCH higher quality. Even smaller companies are finding that developing for the iPhone is simply not worth their time due to the low payout. Higher-end software and gaming companies have programmers who's skills merit a bare minimum $30-$40 an hour. There is no way a project involving those wages will break even when the app sells for just $0.99. Therefore, the only companies that can generally take on the iPhone app market are companies with

• Extremely low overhead
• A business model already built upon low prices

Companies with extremely low overhead(business expenses) can accept the low market prices because they have lower expenses to manage. Sole proprietors and teams of 2-3 generally fall into this bracket. A higher-end company that has a low-price model already in place is PopCop Games. Their PC Games average $20 in store and $10 on Steam. Thus when they ported their hit game Plants vs Zombies to the iPhone, they were able to cope with the market prices since their price for Plants vs Zombies was already at $10. They lowered the price to $2.99 and have enjoyed one of the top slots for paid apps. (It really is an excellent game, I recommend getting it if you haven't.) But the companies who make high quality PC games or software at a higher price to compensate for overhead can not cope with these prices, and they will be unable to develop any iPhone apps until prices rise. The price-level and quality comparison relates directly to the web design industry. We've all heard of crowd sourcing, and the low quality work that tends to result from it: Now imagine if that's all we had.

The "Top List" Grip

Last December, Business Insider wrote about how the prices for iPhone apps were tanking. There used to be $10 premium apps that would top the charts: Not anymore. The "Top Apps" categories in place by Apple have actually become a vessel of price gouging. Colin of Freeverse Gaming commented on the Business Insider article, saying "We'd love to have our titles be more than $1-$3... they're worth it, but we want to keep our spots in the Top 10 and Top 100 Paid Apps list more." Since most apps are downloaded directly from the App Store's "Top 100" listings, having a spot in that list is extremely valuable. And currently it seems that the only way to get in the top 100 if you have a quality product is to just slash the price. These low prices also put freelance programmers and small dev teams in a tight spot. At these low prices, if their app doesn't go viral, they aren't going to break even in terms of opportunity cost.

The Solution

There is no real solution: This is just Capitalism in the works. People are naturally favoring lower prices, and there's nothing that can be done about it. The only way things will change is if people realize that they could buy twenty $.99 cent apps that will each be unused after a week or two, or buy one well developed $10.00 dollar app that they would use over the lifetime of their iPhone. If the market is only willing to pay garbage, the developers will only be able to put out garbage if they want to break even. Once the market shows that people will be willing to pay more for iPhone apps, developers will be able to put more time and care into the apps. June 06, 2010