
Apple has damaged the perceived value of software - prawn
http://mattgemmell.com/damage/
======
Aaargh20318
I'd argue that the perceived value of software is correct. As with all IP,
once created the value of a _copy_ is pretty much zero. It's a simple case of
supply and demand, the supply is infinite so logically the price is zero.

The problem is not selling software (or songs, or movies or any other IP
really) for too little, the problem is billing for something that is not
scarce. People intuitively understand that scarce things have value and that
the value depends on how scarce it is. This is why selling things for which
there is an unlimited supply is an uphill battle.

Look at it like this: if you hire a plumber to install a toilet in your home,
would you accept it if the toilet was 'free' but you had to pay a fee for
every usage ? Hell no. But you'll gladly pay the plumbers hourly wage and
material costs.

The IP industry is trying to sell toilets on a pay-per-flush basis and then
acts all surprised when people don't accept this and see no ethical problems
with piracy.

The real solution would be to find a way to charge for things that people _do_
consider scarce, such as the developers/artists time. Unless we find a way to
do that we are stuck with this conflict between consumers and producers of IP.

~~~
goseeastarwar
Pharmaceutical companies spend 100's of millions developing new drugs, but it
costs essentially nothing to manufacture those pills once they have FDA
approval.

Who expects medicine to be free because they cost nothing to replicate?

~~~
nine_k
Can you replicate a drug _all by yourself_ at an essentially zero cost?

Making another 100mg of a medicine may cost essentially zero on a
pharmaceutical plant, but you can sell the access to the plant.

Copying data is not just easy, but you have already bought the "factory
equipment" needed for it, that is, a computer. Thus the drive to dumb down
consumer computers (DRM) or move the essential things from users' possession
so that they could not easily copy them (SaaS).

~~~
goseeastarwar
You need to come up with a stronger argument than software should be free,
because it's easier to copy than viagra.

~~~
nine_k
I'm not making an argument for "software should be free" here. I'm trying to
explain why people often try to copy software or media: it's trivially easy,
obviously not requiring the original author's expertise. If they pay the
author in such a situation, it's because they _want_ to support the author,
not because they are forced to. This ends up with quite little. When an
enforcement agency (a publisher) intervenes, the amount extracted grows, but
most of it is taken by said agency.

------
Eridrus
I don't think this is Apple's fault as much as the reality of competition.

The reason apps are so cheap is because there are so many substitutes.

Apple may be highlighting those who support multiple platforms, but its not
telling anyone what to charge.

Musicians complain about the same thing as music gets cheaper and remains
somewhat fungible.

It's no one's fault, it's just the reality of competition in an industry with
zero marginal cost.

~~~
cousin_it
This x100. The problem has nothing to do with Apple. Writers, painters and
musicians have been faced with the same kind of market for a while, though
there's no centralized middleman. Video game developers are headed that way as
well. When distribution is easy, "little guys" overrun the market and drive
the average success level to zero.

Ironically the one thing that might help is centralized gatekeeping with
strict quality control. But that's not as profitable for the gatekeeper as the
alternative, so I guess it makes sense for the gatekeeper to be a non-profit
entity that can enforce rules, like a union or guild. I wonder when the world
will realize that.

~~~
pdkl95

        s/centralized gatekeeping/curation service/
    

Yes, it won't be as profitable as a walled garden, and it will live or die by
their reputation. When the market races to the bottom, quality suffers and the
risk of scams/etc increases. Eventually, this _creates_ a market of people who
don't want to risk buying a lemon. A store that _carefully_ curated what they
offer and/or offers additional guarantees about safety/quality/etc is a model
that has been successful in the past.

~~~
Eridrus
I don't think lemons are a real concern in digital economies where marginal
costs are zero, so it costs you nothing other than a lost sale to offer a
refund.

Not sure about Apple's store, but you can get a refund without too much
difficulty on Steam of the Play store.

Discoverability is a real concern though.

~~~
cousin_it
In gaming at least, lemons are a big concern. For some reason gamers are very
afraid of spending five bucks on a possibly imperfect game. Even when refunds
are easy and automatic. It defies logic, but it's true. Anyone who can make
curation trustworthy will make millions.

------
hvs
I think the "1 purchase, multiple devices" is fair in the sense that I'm only
using one device at a time. Also, if I upgrade my phone, why should I have to
buy your app again?

That said, the lack of a paid upgrade option in the App Store is a significant
negative. To pretend that a one-time purchase for $5 should guarantee you a
lifetime of upgrades is both shortsighted and abusive to developers.

~~~
dismantlethesun
It's not really that terrible. Everyone can just use the Microsoft Approach
and date-name their software.

Buying Office 2015 only gets you that version.

If you want Office 2017, it's not an 'update' per se unless they generously
offer it to you, but rather an entirely new piece of software.

~~~
andmarios
If you do that in the app store (ios or android), prepare to get thousands of
1-star reviews for your old version from people who believe they are entitled
to updates for their lifetime.

I've seen it upfront two times in the playstore, where apps I liked released a
new version. I was eager to buy the new version but the new/updated reviews
for the old ones were ruthless. One app had to give the new version for free.
The other had to promise to keep updating the old version too. The first team
just gave up on both apps. The second team (one developer actually) continued
but slowly toned down his efforts, going into essentially maintenance mode.

~~~
sangnoir
> If you do that in the app store (ios or android), prepare to get thousands
> of 1-star reviews for your old version from people who believe they are
> entitled to updates for their lifetime.

As I user I've had the opposite problem: developers who radically change an
app that was perfect. I have no way to revert to the older version I
preferred. If the developer had created a new app, I could have stayed on the
old one. It's unfortunate most other users want unlimited updates. Paid
upgrades and version selection remains an unsolved problem.

~~~
aj_g
Yeah. I disable auto updating for this reason on my phone. I've had a number
of apps change up their functionality on me or add obtrusive ads and I can't
go back to what once worked just fine for my needs.

------
spcelzrd
As a developer, I use a lot of open source. But I haven't paid for a desktop
application in years. The web, with it's promise of a free browser and free
web applications, has done as much to destroy the perceived value of software.

~~~
eeZah7Ux
You are confusing value with price. Breathable air is free of charge (so far)
and people value breathing.

Similarly, pro bono work does not cheapen the value of a lawyer work. Working
for $1 per hour does.

------
matt4077
Oh come on... Apple single-handedly revived the software-for-consumers
business model with the App Store. Before, people bought a PC with an OEM
license for Office and got their son to install a pirated version of
Photoshop. There was essentially no market for consumer software outside of
games.

~~~
rantanplan
Revived as in what? Make people believe that 1 million of fart apps is worth
paying for? How much value do you put on apps that superimpose dog ears on
people in real time video/camera?

How many apps have you downloaded and how many are actually useful to you?

~~~
mwfunk
It's hardly Apple's fault that people aren't willing to pay big money for fart
apps. If you want to put a $10 fart app out there, it's not like anyone's
stopping you from doing it.

Speaking for myself at least, I've purchased quite a few mobile apps over the
years. If I need an app in a certain category, I will always get one that
costs money over one that's free with ads. I'm sure I'm in the minority, but
people like me don't have to be the majority for someone to make money from an
app. The only thing that matters is the number of people like me out there,
not the percentage of total users we represent.

I do think there's much room for improvement of course. I wish they would do
stuff like allow people to offer paid upgrades. But claiming that there are
literally no good paid apps is just silly.

~~~
eeZah7Ux
> It's hardly Apple's fault that people aren't willing to pay big money for
> fart apps.

Apple encouraged a market of many cheap-as-in-shoddy $.99 apps instead of
inexpensive yet useful and reliable software.

~~~
mwfunk
How did they actively encourage that situation, what could possibly be their
motivation for wanting that situation (surely they'd rather have 30% of a $10
app vs. 30% of a $1 or free app), and what would you have them do to change
that situation? There are literally millions of people who would love to have
a healthier market for paid mobile apps, including the company itself. Since
you've clearly got the answers and we're all just out here in the wilderness
scraping sticks together, please share your insights for the sake of the
entire industry.

------
yen223
I would posit that "free" but ad-driven sites did far more harm than Apple
ever could.

If anything, I think it's pretty impressive how Apple made paying for apps a
viable thing, back in the days of rampant Internet piracy.

~~~
twoodfin
Exactly: The problem for small software developers isn't Apple, it's that the
logical price for the far-and-away biggest app makers (Google, Facebook, Snap)
to charge is $0. Customers naturally fix their expectations from the apps they
use every day.

------
onion2k
Apple's number one key, most important reason for their rules about apps is
simple - they prioritise whatever keeps users buying a new iPhones every 2
years. Multiple iterations of what is ostensibly the same app with small
feature additions isn't going to do that - users don't need a new phone to run
something with some extra levels or a new admin screen. Apple need to keep the
content in the app store looking like _new_ things that take advantage of new
phone features. Brands are great, so new versions of games that use existing
IP are welcomed, but new _minor_ versions of previous apps are not.

If you want to build and release small, incremental iterations of an
application instead of major updated versions of an application then don't
write software for iPhones.

------
sosodaft
This is why the only startups I'll work for are B2B. Trying to sell an "app"
to the masses? Uber is losing money and they're a household name, good luck
with your Tinder for dogs or whatever.

~~~
nol13
well it's like tinder for dogs, but for cats!

------
scientific_ass
>Make exactly one sale of an app per person, ever, regardless of the number of
devices they own, how often the app has been updated since they last used it,
and so on. This also teaches customers that they’re entitled to come back to a
free app at any point in the future, no matter how long ago they paid for it.

And

>Ideally, make exactly one sale of an app per family. This reinforces the
commodification of software; it’s to be shared around.

From a consumer perspective, I whole heartedly agree with author.

I own 3 devices, 1 is android and other 2 are Iphones. I never noticed how
damaging this could be for developers to have their work sold for the price of
one when most of the people use them on multiple devices.

Update part also makes sense, an application built 3 years ago has come a long
way since then and have taken thousands of work hours for maintainance and
updates.

~~~
nervositee
But as a consumer, what the heck am I buying? I'm not buying a physical
product, I'm buying a sequence of 0 and 1. It's a license to use said app.
It's not the 90's anymore where you own a CD with your program and that is
your product. I cannot re-sell the "used app" when I don't use it anymore.

So if I buy the 'license' to use your app, I'm gonna be real effin pissed if I
can't use it on all my devices.

Actually tying your purchase to your Apple ID is much better for the dev,
because only YOU can use it. A CD with software is much easier to share with
your friends.

~~~
xixi77
Exactly: people are complaining about technology because it gives consumer an
option to have a copy on multiple devices, but at the same time they are just
taking the things that the same technology gives them, such as preventing
people from reselling their copies, as some kind of a God-given right.

------
twelfthnight
> If you sell at $3 instead, your number of sales will go down by much more
> than the factor of three that you increased the price by.

In a way, this is great. By charging less for software more people are able to
enjoy your software and you make more money. It's a win-win.

I think the only (but major) issue here is that 30% is a laughably high cut
for Apple. This cut is so high that only really popular software can be
profitable for the developers. There's a lot of useful software that won't get
built because it's niche and isn't profitable after 30% is taken off the top.

~~~
BlackFly
Actually, the quote you highlight is where I started to take umbrage with the
blog. I'm willing to listen a person's opinion on what is ideal or fair, but
here the author asserts an empirical fact without evidence.

The evidence that I have actually heard[0] from valve indicates the opposite:
that total revenue is unchanged by price. I am willing to believe that it can
vary from product to product, but I am not willing to believe such an absolute
assertion without any evidence.

I agree with your point about 30%.

0: [https://www.geekwire.com/2011/experiments-video-game-
economi...](https://www.geekwire.com/2011/experiments-video-game-economics-
valves-gabe-newell/)

~~~
jeremy7600
Did you skip this part of the article?

"But then we did this different experiment where we did a sale. The sale is a
highly promoted event that has ancillary media like comic books and movies
associated with it. We do a 75 percent price reduction, our Counter-Strike
experience tells us that our gross revenue would remain constant. Instead what
we saw was our gross revenue increased by a factor of 40. Not 40 percent, but
a factor of 40. Which is completely not predicted by our previous experience
with silent price variation."

and then: "Twenty-five percent, 50 percent and 75 percent very reliably
generate different increases in gross revenue."

------
mstade
I disagree with most of the points made, I think Apple has done more to make
software a viable product than any other company. The problem however is that
they paint everything in very broad strokes. Everyone pays the 30% Apple tax,
regardless of whether you sold a single or a million copies. The absolute
numbers on the tax paid for a million copies is higher, but so is the revenue.
I'm not sure a progressive system is better than a linear system either, where
the top earners would pay more than those at the bottom.

In any case, out of all the issues with the App Store I think this one of app
cost is the least interesting. Rather, the ever changing landscape of Apple
approval policies and the severe platform lock-in effect is worse. Apple can
more or less kill a viable business simply by denying an app in their store,
and that removes the entire iOS market for that business with little to no
recourse. This is the bigger deal I think. Figuring out how to get people to
pay you $3 instead of $1 is less important I think, when you'll most certainly
get $0 if you can't sell the damn thing in the first place.

I don't fully understand how Apple is allowed to effectively close off a
significant market like this.

------
iplaw
He didn't even hit on two other major talking points:

1) Free annual macOS updates.

2) Free Pages, Numbers, Keynote, GarageBand, etc.

This change forced Microsoft to drastically reduce the price of their OS, and
to offer free upgrades to Windows 10 for a couple of years! It also prevents
people who buy Macs from having to decide between Pages/Numbers/Keynote and
the oft-times more familiar and business-friendly Microsoft Office suite. If
they get the basic productivity apps for free, why bother with an Office365
subscription? Hell, offering GarageBand for free is undoubtedly undermining
the business models of countless consumer-grade audio and mixing software
developers.

It keeps Mac users within the Apple software ecosystem.

~~~
nervositee
and, you know, google also made an office suite free before Apple made theirs
free.

~~~
iplaw
But Google was simply extending their already-free web-based offering, not
taking historically expensive desktop software (operating systems and
productivity suites) and making them free.

------
darrmit
Was (consumer) software ever perceived as _that_ valuable, though? Most
everyone I know is completely unwilling to buy an app or subscription. Even
some technical people I know just refuse to spend money on software or
services. It's not something I understand or agree with, just something I've
noticed. It may be a more regional thing, too, here in the rural southeast.

~~~
chrisp_dc
I don't think consumer software has been that valuable in my lifetime. MS
Office, & Turbo Tax are killer apps that people pay for. People willingly pay
for online games too. Other than that? I guess some people buy apps.

I don't think it's regional. I've never bought an app. I paid for some dev
tools, but that's it. Selling productivity outside of people's work is an
uphill battle.

------
cdevs
I agree with the problem but Wouldn't this be more because the indie market is
fighting the larger businesses for prices until the final lowest price step to
compete for buyers was a .99 cent app or in app purchase or ads. If App Store
kept indies out we would have had 9.99 Microsoft word style apps everywhere.
It sucks now for a single dev who can't market a app for $30,000 dollars that
only makes $8,000. It almost mimics the American economy where the top %1
wins, sometimes you hear of a lower class citizen making it and then everyone
thinks they can make it.

~~~
bo1024
I think your point relates to the discoverability problem the author
mentioned. People mostly find or learn about apps through the App Store. So
apps that get to the top of search results can get millions of downloads while
similar but unlucky apps get almost nothing.

~~~
w0utert
Better app discovery could help a lot: even if 90% of your potential customers
are unwilling to spend more than $0.00 for apps, that still leaves literally
millions who would consider buying if they were only able to find it.

It's not an easy thing to solve though, I think the promotion and discovery
model should be changed fundamentally. First of all ratings and 'most popular'
should be completely eliminated from the equation, because they are self-
fullfilling and relatively easy to manipulate. I would like to see some form
of syndication for apps, which suggests me apps that fit my preferences and
use cases, which could (and likely is) vastly different from other people. For
example, I would love to be able to find (by whatever means possible) more
developer-oriented apps (either on desktop or mobile) for things I don't even
know I could use. The current app store model provides basically zero
opportunities for this, I can go to the 'developer section' in the app store
and look at the top 25 apps but there my options to discover apps stops. There
really is no way for niche apps that could find a decent number of paid
customers to promote themselves.

Besides better app discovery, trial versions are really essential. I would
like some kind of subscription service that lets me try literally every app I
want, but only for one month after which I would have to buy it at the regular
price.

Yet another idea could be to allow developers to join forces and bundle their
apps, dividing the profits through some kind of agreed-on distribution. This
way low-volume/high-margin apps that would be hard to sell in large numbers as
standalone could piggyback on high-volume/low-margin apps.

Plenty of possible improvements.. At any rate I feel something needs to
change, because the current situation is hurting creativity and decreasing the
quality and value of many app categories.

~~~
misingnoglic
Being able to try apps is something I've always been surprised isn't widely
available right now. There's a sheet music writing app on the Microsoft app
store for $60 - I really want it, but I can't justify paying that much for
something I can't even try out. What if it just doesn't feel right?

------
detaro
Alternative candidate: Google and the model of ad-based software

~~~
darrmit
Agreed. I think this has been more damaging than anything. Most people just
have no idea what they're giving up in exchange for the free software/service,
and when they find out, it's too hidden for them to care.

~~~
eeZah7Ux
If anything, apps are even more invasive than webapps when it comes to
snatching your data, tracking you or displaying ads. (And I'm not defending
google)

------
drchiu
How about Google when it comes to web apps? Gmail and Google Docs come to
mind.

Reality is all the big internet corps have been doing this for a long time.

Then there are those of us who develop fremiums which further reinforce this
behaviour.

Now we price our products north of 100/month to try and weed out the non ideal
customer.

~~~
Androider
Google offers Gmail and Docs for free to consumers, in order to hook
businesses into using it (and mining the consumer's data, of course). And it's
working great, they announced a while back that over 3 million businesses are
now signed up for the commercial G Suite [0], paying $5- $10 per
employee/month in perpetuity (I personally consider the G Suite fantastic
value as a business owner).

[0] [https://thenextweb.com/insider/2017/01/27/google-just-
passed...](https://thenextweb.com/insider/2017/01/27/google-just-
passed-3m-businesses-paying-for-g-suite)

~~~
pythonaut_16
G Suite absolutely destroys Office 365 at the web experience. Gmail is far
superior to Outlook online, and all of the Google Docs/drive online experience
is extremely well integrated, fast, and intuitive compared to Office 365.

Microsoft wins hands down at the desktop experience though. If you have big or
complicated documents and spreadsheets you can't beat Office.

For me personally, G Suite wins because by the time I _need_ Word or Excel I'm
going to reach for a full powered solution like Latex or Python.

------
mcv
I wonder if Steam isn't doing something similar. Prices are higher there, but
I almost never pay full price for a Steam game, and I get the game for all
platforms at once.

~~~
samtho
I would argue they are not. The cost of getting a game to steam is
significantly higher than getting an app to a marketplace (Apple, Android,
etc) and are meant to last for a much shorter span of time. As others have
stated, the cost for making copies if effectively zero. The race is not to the
bottom (as there are too many specialized games for different niches) rather,
it's a race for content production.

~~~
mcv
Is that so different from the app store? Why would Steam games be meant to
last for a shorter time than mobile apps? Most mobile games tire pretty
quickly, whereas some of the games on Steam have enormous statying power.

------
candiodari
Unless you can capture the value of something, it may have value, but the
price is going to be low. In order for something to be of value to an
inventor, the value must be able to be captured.

This is easy for, say pharmaceuticals ("you'd like to live ? That'll be $5000
please. Patents mean nobody else can save you").

Likewise, software has the problem that replicating software is too easy,
hence the value can't be captured. Imagine what would immediately happen if
someone made an app that people would gladly pay $5000 for (e.g. one that
somehow gets them interviews for a $100k job), it would immediately be
replicated and sold for $500. And then $50.

Only where that is really hard can you profit. Software that for some reason
can't be easily duplicated. Only Microsoft seems to have pulled that off, for
very large and complex programs and even there the engine seems to be
sputtering.

Larger article about this: [https://www.wsj.com/articles/peter-thiel-
competition-is-for-...](https://www.wsj.com/articles/peter-thiel-competition-
is-for-losers-1410535536)

------
resoluteteeth
Surely this is one reason that even consumer-oriented software is going to a
SaaS model? For iphone apps potential purchasers will be comparing your
software to other aps that cost $3, but the normal rate for subscription
services is $5-$20/mo., so just by making your software a subscription
website, you can ask for a higher effective total price without seeming
unreasonable.

------
lazyjones
I'm not sure that Apple's environment is hostile towards sustainability of
small software businesses like the author claims. Sure, prices are low, but
the market is huge and it's extremely easy to sell large numbers if the app is
worth anything.

To put it differently: how well would a small software business that is
struggling under these conditions have fared 25-30 years ago when you had to
advertise in print magazines and carry the disks to the post office for every
customer (and every update!)? The fact that there is more competition now,
isn't exactly Apple's fault either.

~~~
visarga
In the past, there was very limited ad space in tech magazines, so,
inevitably, fewer softwares were known and money focused on those that
remained.

Today apps are competing with millions of other apps directly in the app
store, anything you want it's been done and released free / with ads, so it's
a whole different kind of difficult, probably more difficult than in the past.

------
greybox
I see it moving to a situation where a consumer pays a monthly price and has
access to all the apps they want to download. This is already happening to
games (see humble bundle & EA Origin subscription).

Amazon are moving this way to an extent, at GDC 2016 the announced that you
could publish your app for free on their app store for their line of tablets,
and they would pay you per customer per minute of usage on your app.

Also, didn't exactly the same thing happen to music industry?

Now we can pay $0 for music, we just have adds interspersed between tracks.

The same thing will eventually happen to everything digitally distributable.

~~~
meheleventyone
Amazon actually announced their service was closing down last week:
[https://developer.amazon.com/blogs/appstore/post/cbadeae1-99...](https://developer.amazon.com/blogs/appstore/post/cbadeae1-990d-4d52-bef5-ea61f6114b94/announcement-
amazon-actually-free-program)

~~~
greybox
At the time I thought they would just turn down the money/minute dial to
almost zero once they had brought enough people to their platform that it
wasn't worth it anymore. I didn't realise they would shut it down completely.

I would be interested in seeing data about how successful that program was at
attracting actual consumers to the platform rather than just developers . . .
.

~~~
meheleventyone
Yup, I'm not sure it was amazingly popular with either. The Amazon appstore
has a bit of an uphill battle in the regard in general AFAIK.

In regard to your other points I also happened across this today:
[http://www.informationisbeautiful.net/visualizations/spotify...](http://www.informationisbeautiful.net/visualizations/spotify-
apple-music-tidal-music-streaming-services-royalty-rates-compared/)

Interesting how quickly these subscription services are losing money and how
low the rate of return to the artist is.

~~~
mysterydip
I only have one game on there, and can't give specifics, but it earned more on
underground than either google or apple's stores (but not both combined). I
was looking forward to the long tail of updating it and gaining users, but I
guess that's the risk with walled gardens.

~~~
meheleventyone
I think in comparison to F2P type mechanics a subscription service that pays
developers per minute of play is great. It's the same focus on retention
without the requirement to try to have the player spend on a regular basis.

------
FussyZeus
I mean is it really Apple, though? Android by comparison has millions of free
apps that do nothing but spy on you end to end, after the OS has already spied
on you thoroughly.

Maybe Apple users are now trained to think all software should be priced like
apps (I disagree with this, but am willing to consider it a possibility for a
given group of the iOS user base) but Google meanwhile has trained a whole lot
_more_ users that all software should be free and they just need to put up
with invasive advertising. I'd argue the latter is far more damaging than the
former.

------
wink
I find it fascinating that this is mostly about iOS. Mac users are still the
#1 group I'd pinpoint as "willing to pay for software at all" \- and I do
think that's the reason why there are many _nice_ apps for the mac where I as
a Linux user just use something usable-but-not-so-nice.

But in the grand scale of things, I guess this doesn't matter so much if you
compare mac app sales versus iOS sales, thus the main point of the article.

------
afinlayson
I had my own App Company back in 2009, before I went corporate and joined
Apple to work on iOS.

I saw the problem as this: once a person has created a valuable software
package, usually it costs nothing to rip it off.

Example: If I create the best kick ass calculator, with 10x better UX, better
functionality. And charge $10. The learning has been done and the barrier to
reproduce what I've created is almost 0. So someone does that, and remakes it,
adds a photo sharing feature and charges $5. Then a student comes along and
thinks "that's cleaver, but what if I add farting noises" and because He gets
education out of it, make's it completely free. How does the first guy recoup
his R&D cost? He can't really. It's too easy to reproduce.

I know this is a little simplistic, because there's the marketing effort and
SEO. But it's hard to convince someone that they should buy the $10 app when
there is a free app. Even if the paid one is better. (Which if you are a fan
of fart noises, maybe it's not)

------
ungzd
iOS is entertainment and consumption platform just because you can't do
anything serious with your greasy finger. You can edit text and graphics on
Commodore 64 but almost can't on iPad Pro. There will be no CADs for $50000.
One exception for this is music software (synthesizers, controllers) which are
usable with touch screen but in this case OS (that is designed for
entertainment and phone calls) is against them, i.e. no interoperability
between apps, no real file system, bad external devices support (although
sound subsystem is surprisingly good).

Who wants to buy fart app or doodle drawer for $200?

There's potential for games (it's possible to make or port RTS with great
controls), but only on iPad connected to charger. Who wants this when there
are PC and consoles? And what if you develop great new CelestialCraft&Conquer
for 3 years, and users are willing to pay $50 for it, but then it's rejected
by Apple? So everyone is making 3-in-a-rows.

------
youngtaff
It's interesting how Apple have driven AppStore prices towards a race to the
bottom when they're selling premium priced hardware.

If less money was being spend on the devices would more be available for apps,
of would it turn out like the Android ecosystem where everything is cheap too?

~~~
nervositee
People are spending even less on cheaper android hardware. So it might even be
the opposite, that since you bought an expensive hardware you can at least pay
a couple of dollars for that app that you could also get for free. You don't
buy the cheapest tires on your expensive car ;)

------
golergka
The biggest fallacy in the post as well as in the comment is that there's some
"true", "fair" value of software, and we can just work it out with clever
arguments.

There isn't. Developer and consumer have conflicting interests as far as price
of the software go, and the price is set at a point where these interests
meet. Of course, there are other variables (such as software developer being
able to pay the bills) and parties (such as Apple) at play, but ultimately,
this is, as always, just a matter of conflicting interests and resources that
both sides have to influence the outcome. All discussions about what is "fair"
or "right" in this situation have literally no meaning.

------
jamespo
This is partly why a lot of older IOS apps I bought (such as the excellent Mr
Reader) have been abandoned by their developers I suspect, as even basic
maintenance isn't worth the revenue stream.

And these apps will soon be incompatible with the forthcoming 64-bit switch.

------
jamesrcole
Why are low prices Apple's fault?

If it's their fault, what did they do to push things in that direction? What
could they have done to have pushed things in the other direction?

I'm willing to listen to honest attempts to answer those questions.

~~~
msh
Its hard to charge prices when apple don't allow trial versions.

~~~
jamesrcole
They might not have an explicit mechanism for trial versions, but people do
make either a free version of their app, or make their app free and have IAP
to purchase the full version.

------
ChuckMcM
I certainly agree with the article's premise, that Apple has put essentially a
cap on what you can earn. I don't know that this devalues software as much as
people copying does however.

Consider a couple of scenarios; in scenario 1 when someone publishes an App
that is the only App of its kind available in the store. There are millions of
phone/tablet users and you capture some some percentage of them and you make a
few million dollars[1]. Scenario 2 is someone publishes an App in the App
store, and it starts to sell well, then 15 additional people publish the exact
same App in the App store and are so busy undercutting each other the price
has gone down to 99 cents. But lets say this group of apps still sells
reasonably well, then another 1500 people put out the same App on the store
they all sell for 99 cents or are free with in game purchases. The original
app creator made perhaps a few thousand dollars on the sale of the app. And
all the people jumping on board made anywhere from nothing to a few thousand
as well.

This isn't the first time that technology has released the creative spark in
thousands more people, and as a result the market was flooded with new
products that were vaguely similar. The industrial revolution had a similar
effect it seems. As it became possible for more and more people to build
things in a small factory or with less training and apprenticeship things got
a bit out of hand and the thing that saved them was that if you patented your
invention you could be assured (if you defended your invention against
infringers) of a small monopoly to recoup your costs.

And if you had that sort of system today, you could invest all your time and
effort and build your app and patent it and then not have to worry that
hundreds of ripoff lookalikes of varying quality would dilute the market and
the returns.

And yet it would be pretty silly to have a 20 year monopoly on an App that
made fart sounds, but perhaps something more aligned with technology time
frames like 5 years or 3 years.

The fundamental challenge is that it is always easier to 'reproduce' than to
'invent.' And if you cannot reward the inventors they won't be able to survive
and we'll miss out on innovation that they might otherwise have been able to
provide.

[1] Don't worry I don't think this is _reality_ :-)

------
ksk
The other "genius" thing Apple did is force people on the iOS treadmill. Your
iphone keeps getting slower and slower, apps _you_ paid for stop working, and
you keep buying new iphones and new apps all over again. I don't believe it
was a Machiavellian smoke-filled-room type of thing, but it just ended up that
way, and hey look, apple just so happens to have made some cash off of that.

~~~
criddell
In my experience, that isn't true at all. In fact, I've heard the opposite.
When iPad sales slump, one explanation is often that everybody's old iPad is
still working great and people have no reason to upgrade.

~~~
ksk
I have personally seen atleast 20 iphones (family and friends) progressively
slow down over each iOS update.

I'd challenge anyone to take an iPhone 4S, for example, with iOS 5 vs iOS 9
and tell me they're equally fast. Whats worse is Apple intentionally blocks
you from going back to the 'factory state' on a device you paid hundreds of
dollars on.

>When iPad sales slump, one explanation is often that everybody's old iPad is
still working great and people have no reason to upgrade.

Yes, that sounds about right.

~~~
criddell
My phone is an iPhone 5C and thankfully it hasn't slowed yet. I did have to
remove a bunch of stuff to get the last upgrade to complete though. Once the
upgrade finished, I was able to reload everything.

------
makecheck
I wish Apple distinguished between "upgradeable for a fee" and other "in-app
purchases" instead of just lumping them together.

Especially for games; as soon as I see that I just _assume_ it is another gem
scam pay-to-win game. I would buy a lot more if it was easy to tell that
something is a demo with a purchase specifically to buy (as opposed to gems).

------
nailer
I think precisely the opposite is true. The article mentions:

> That means selling at a low price, because most customers will only pay low
> prices, and all customers prefer low prices.

Before Apple's excellent app store, how mainstream was it for people to talk
about purchasing apps at all?

So people prefer low prices. Before this, they preferred _not having software
or piracy_.

------
abandonliberty
Consumer data mining and advertising has had a far greater effect. Consumers
used to pay for software.

Now software pays for consumers. I wonder how much google spends every year on
an average user.

The software is just an intermediary process step in the acquisition of
consumer data and advertising dollars.

------
metafunctor
Apple is in the business of selling hardware. A good selection of (cheap) apps
sells more hardware.

This is also why they keep coming up with new APIs that are only available on
new devices. They need apps that only work on new devices to sell more of
those devices.

------
tehabe
I think the only real problem is, that you can't distribute paid upgrades.

------
jowiar
The big argument I'd make against this is that, before the App Store, most
people didn't buy software at all. They used their web browser, maybe their
office suite, and that was it.

------
georgespencer
> Target the largest customer base, so they get 30% of the biggest potential
> income. That means selling at a low price, because most customers will only
> pay low prices, and all customers prefer low prices. This teaches customers
> that software’s average value is low.

Can someone explain to me this logic? It seems faulty. Put it this way: if it
were somehow possible to make more money as a developer in the App store, how
would removing Apple's 30% cut make it more feasible? Apple and developers
have a shared incentive to make as much money as possible, but developers
control pricing and who they target. Apple is just along for the ride.

> Build a universal app (iPhone and iPad versions, in the same package) to
> increase the attractiveness and convenience of owning multiple iOS devices.
> You’ll earn a “+” in your app’s buy-button on the Store. This teaches
> customers that supporting multiple devices isn’t something to pay extra for.

This is better, and fairer, than the alternative. My iPad and my iPhone run
the same operating system. Why should I pay twice for the same functionality
across both of them? If Apple didn't do this people would be writing articles
lamenting the fact that they want to make their 30% cut twice.

> Also include an Apple Watch version within the iPhone app. As above.

I would be happy to pay to unlock Apple Watch functionality in apps. I'm not
sure that Apple prevents that from happening. But I agree with the author here
provided the extra functionality is not simply "notifications" but something
meaningful and unique to the watch's hardware.

> Provide regular updates, at no cost; so much so that there’s no mechanism
> for paid upgrades at all. This teaches customers that they should expect
> free upgrades for life, no matter how little they paid for the software
> initially.

There is a mechanism for a paid update, which is to simply state end of life
for an app and release a new one (a la Tweetbot). Another way of looking at
this is: Apple is encouraging developers to release new apps at full price
once they feel that they have something new to launch, OR to use subscription
pricing or quasi subscription pricing like Marco does with Overcast.

> Make exactly one sale of an app per person, ever, regardless of the number
> of devices they own, how often the app has been updated since they last used
> it, and so on. This also teaches customers that they’re entitled to come
> back to a free app at any point in the future, no matter how long ago they
> paid for it.

That seems fair to me as a consumer. If I bought something a year ago and want
to re-install it, why shouldn't I? Wouldn't it seem unfair to not be able to
use something I paid for?

> Ideally, make exactly one sale of an app per family. This reinforces the
> commodification of software; it’s to be shared around.

"Ideally" = Apple does not enforce this.

> Sell only through their store, with their distribution mechanism, their
> product page design and user flow, and their 30% cut — which doesn’t provide
> for marketing or discovery of any kind beyond searchability, and the very
> small chance of being featured in some way. The majority of customers
> probably have no idea that the price they pay for an app is almost 43%
> higher than the amount the developer will receive, before tax (i.e. that
> Apple takes 30% off the top).

Which has done more for the security and quality of the software which is
available to consumers. (And that's also a reason affluent middle class folks
flock to iOS.) And Apple allows search marketing and of course doesn't stop
developers from marketing in Google, Bing, on TV, etc. which is where the
majority of installs are driven for most app-centric startups I know.

~~~
Ensorceled
Your reply sort of proves the point of the article ...

> Put it this way: if it were somehow possible to make more money as a
> developer in the App store, how would removing Apple's 30% cut make it more
> feasible?

30% is a pretty hefty percentage. It's the weakest point in the article but
imagine if I just cut your salary by 30%, is your job still worthwhile?

> My iPad and my iPhone run the same operating system. Why should I pay twice
> for the same functionality across both of them?

Except it's not the same functionality. Try Evernote for instance ... does it
LOOK like the same functionality? That's a lot of developer effort you can't
recoup. You've just diminished all that extra work to support both modalities
with a wave of your hand.

> That seems fair to me as a consumer. If I bought something a year ago and
> want to re-install it, why shouldn't I? Wouldn't it seem unfair to not be
> able to use something I paid for?

That thing you paid for 5 years ago no longer exists, the software you bought
5 years ago can't even RUN on your new iPhone, what you are getting, for free,
is the thing the developer made this year, with actual work, which _looks_
like the thing you bought 5 years ago.

> "Ideally" = Apple does not enforce [family sharing].

But they do encourage it. It's part of the diminishing effect. That you can
opt out as a developer doesn't change that.

~~~
georgespencer
> 30% is a pretty hefty percentage. It's the weakest point in the article but
> imagine if I just cut your salary by 30%, is your job still worthwhile?

I'm unclear how this is a response to my response to OP. OP is saying that
Apple forces developers to target the biggest possible audience by taking 30%.
I'm arguing that Apple is agnostic and that if there's a way for developers to
make more money in a niche then Apple is happy with that. And you can always
price your software at +30%.

> Except it's not the same functionality. Try Evernote for instance ... does
> it LOOK like the same functionality? That's a lot of developer effort you
> can't recoup. You've just diminished all that extra work to support both
> modalities with a wave of your hand.

That's a distinction which isn't made in the article. Autolayout makes it
trivial to support the same functionality across both devices. If you want to
introduce new functionality with the iPad then have a separate app. I believe
you're still entitled to do precisely that.

> That thing you paid for 5 years ago no longer exists, the software you
> bought 5 years ago can't even RUN on your new iPhone, what you are getting,
> for free, is the thing the developer made this year, with actual work, which
> looks like the thing you bought 5 years ago.

I don't understand this I'm afraid. If you're discussing the fact that apps
sometimes need to be updated to keep running on the new versions of iOS then
that's just part of the cost of business, but plenty of developers choose to
not do this. Again, nobody is forcing developers to do this. Nobody is not
buying your app because they think it might not be supported in five years
time.

> But they do encourage it. It's part of the diminishing effect. That you can
> opt out as a developer doesn't change that.

It's only a diminishing effect on consumers if Apple encourages developers to
do it and they do it. There's nothing forcing developers to do it. They're
choosing to. They only have themselves to blame.

------
amelius
Google has damaged the perceived value of personal data.

------
samat
I disagree, but this is the only website which for I did not enable reader
mode in Safari. The best mobile experience ever. Love you man.

------
scarface74
_Target the largest customer base, so they get 30% of the biggest potential
income. That means selling at a low price, because most customers will only
pay low prices, and all customers prefer low prices. This teaches customers
that software’s average value is low._

As software developers, why target the largest customer base instead of
creating a product that people are willing to pay money for and target people
who can and will spend money?

Apple doesn't target people who are only willing to buy a $60 unlocked phone
or a cheap computer. Apple Stores are usually located in the most affluent
areas in the country.

 _Build a universal app (iPhone and iPad versions, in the same package) to
increase the attractiveness and convenience of owning multiple iOS devices.
You’ll earn a “+” in your app’s buy-button on the Store. This teaches
customers that supporting multiple devices isn’t something to pay extra for._

I wouldn't pay twice for the same app to run on my 13" laptop and my desktop,
why should I pay twice for the same app for my iPhone and iPad?

 _Provide regular updates, at no cost; so much so that there’s no mechanism
for paid upgrades at all. This teaches customers that they should expect free
upgrades for life, no matter how little they paid for the software initially._

It's clunky, but app developers are doing paid upgrades via app bundles.

 _Make exactly one sale of an app per person, ever, regardless of the number
of devices they own, how often the app has been updated since they last used
it, and so on. This also teaches customers that they’re entitled to come back
to a free app at any point in the future, no matter how long ago they paid for
it._

How is that different from any other software? I can still run old Win95
software today.

 _Sell only through their store, with their distribution mechanism, their
product page design and user flow, and their 30% cut — which doesn’t provide
for marketing or discovery of any kind beyond searchability, and the very
small chance of being featured in some way._

It's always been the responsibility of the producer to market their products
and make it stand out. Coke and Pepsi don't depend on the stores to advertise
for them.

 _The majority of customers probably have no idea that the price they pay for
an app is almost 43% higher than the amount the developer will receive, before
tax (i.e. that Apple takes 30% off the top)._

I think consumers know there is a markup to what they buy in a store.

Unless you're selling a game, selling an app in the store is not the way to
make money. The companies that make money from apps are using the apps as a
front end for a service consumers want.

I made more money in 2008 as a "mobile developer" working on Windows CE
devices for a company that produced a service that other customers want than
most indie app developers make today.

