
The market for paid iOS apps isn’t dead - nikunjk
http://www.marco.org/2013/04/19/paid-app-market
======
rbritton
It's not dead, but discoverability is a huge problem. I still make decent
money ($5-6k per month) on an app I first released in 2010, but the two
additional ones since then are probably not even collectively over $1000 for
their lifetime. Unless you're featured, have significant word of mouth, or are
on Top Free/Top Paid/Top Grossing, the number of people that actually find
your app is small. It takes significant publicity to get enough momentum in
sales to where word of mouth even works.

Edit:

This isn't to say I won't make anything else. I have other apps in progress,
but I'm going to apply the lessons I've learned to make them work. They are
somewhat niche apps, but I've found those work for markets that are accustomed
to paying for tools/software. None will be under the $14.99 price point. It's
unlikely I'll ever make another one that is -- it's just not worth the effort.

~~~
snorkel
Pay-before-play is a dead revenue model. The money flow in apps these days is
in in-app purchase (pay for power ups), pay-after-trial, and in-app
advertising.

~~~
signalsignal
The parent post just stated that he made 5-6k per month off of a single iPad
app. Can you back up your claims with facts?

~~~
yareally
The parent also said that particular app is well established and that his
newer apps do not fair as well. While paid apps might not be dead, they are
significantly harder to get noticed these days as he also mentioned.

~~~
signalsignal
> The parent also said that particular app is well established and that his
> newer apps do not fair as well.

Wrong. The parent post claimed that the higher cost app $12.99 led to much
higher revenue than the lower priced apps at FREE with ads and $.99 to $1.99
cost. In fact so much so that the parent post wrote that no more low cost
premium or premium apps would be developed.

Please, do your research so as to not waste people's time correcting you on
this website.

------
ruswick
Marco seems to make this unjustified and unelaborated assertion that price has
no bearing on popularity, and the only differentiation between prices in free
vs. paid. I'm not sure why this would be so for the App Store. Purchasing
software, like purchasing any product, is necessarily a balance between
utility and price. I, as a value-oriented consumer, have a finite amount of
money that I wish to conserve, yet want to maximize my utility from the
product. I could buy a BMW, which would make me happy and increase my utility,
but would also put me massively in debt and be fiscally untenable. Because of
this, I'm more likely to purchase a low-end sedan, which will function
adequately but not break the bank. At the more minute level, I have to decide
between superior name brands and cheaper generics. This also entails
evaluating cost and utility. The same is true of apps. If I'm presented a
choice between an app that does 100% of what I want but costs $3 and an app
that does 70% of what I want and costs a single dolar, I will be forced to
evaluate the utility of that added utility of that app versus the larger
price. That is how decisions in commerce work.

People make purchasing decisions based partially on price... I'm not sure why
(or how) Marco is trying to refute that fact.

~~~
danielrakh
I agree with you. I also think the "evaluation of utility" of Apps is poor.
IMO, You can't really evaluate the utility by just the screenshots and
reviews. It would be great if just like a car, you could "test drive" the App.
Download a version that would work for x mins and would automatically present
you an option to buy or delete after x mins.

~~~
benjiweber
Google play lets you return apps within 15 minutes. Does the app store not
have anything similar?

[http://support.google.com/googleplay/bin/answer.py?hl=en-
GB&...](http://support.google.com/googleplay/bin/answer.py?hl=en-
GB&answer=134336)

~~~
myko
There is no official way to get an App Store refund, but it does apparently
happen, here is a guide on how one might do so:

[http://gizmodo.com/5886683/how-to-get-a-refund-from-the-
app-...](http://gizmodo.com/5886683/how-to-get-a-refund-from-the-app-store)

------
andrewtbham
Here is my app. Location based time tracking.
[https://itunes.apple.com/us/app/onsite-time-
tracker/id470803...](https://itunes.apple.com/us/app/onsite-time-
tracker/id470803110?ls=1&mt=8)

Here are my sales
[https://docs.google.com/spreadsheet/ccc?key=0Asp1Qlg4fVlzdFk...](https://docs.google.com/spreadsheet/ccc?key=0Asp1Qlg4fVlzdFk2TUN4MU81NHdyWmFvMnJ3OU1Qanc&usp=sharing)

~~~
xdzthrowaway
That's low. My sales yesterday: <http://i.imgur.com/9GxBLCX.png>

~~~
MortenK
You actually created an account, just to put down the op and share that you
made 1300 bucks yesterday?

------
socmoth
I once had someone pitch me an idea for an app, which coincidentally I had
actually built and was selling on the app store. He wasn't willing to pay
99cents for it (but had previously been willing to quit his job to make it
hypothetically with me).

It is a weird world.

(for the record I like marco's work)

~~~
ja27
I hear app ideas all the time. I think at least a third of the time I can pull
out my phone and find an app that does that already. If they haven't even
looked at competitors, they're not serious. I've learned that one quick way to
filter people is to ask to see what apps are on their phone. If it's just
Facebook and Angry Birds, they're useless.

Out of all the app pitches I've heard, I'd say 33% are already done reasonably
well by other apps. Maybe 25% or more are not possible to do on the iPhone
(but sometimes on Android). At least 90% have a marketing plan of "just put it
in the store and wait for the sales to explode."

------
fpgeek
Translation: Sure, the odds have gotten longer. Ticket prices might be higher.
Consolation prizes might be smaller. But don't worry. If you pick your numbers
just right you too can still win the lottery!

I understand things look different from his vantage point, but I just don't
see a healthy market in what he wrote - I see a dying one. With the climb
getting steeper and the asking prices getting higher, that just shrinks the
potential market for paid apps more and more. That helps a culture of not
buying apps (other than games) keep growing. To me, it seems clear where this
will end.

~~~
phil
You're mistaking the micro for the macro. Sure, the odds have gotten longer
and ticket prices might be higher -- but from the app buyer's perspective,
that's because there are just so many rides and they're so damn good. Can't
try 'em all!

------
danielrakh
As an iOS developer I speculate that it's not the price that hinders people
from downloading an App, it's the psychological barrier of paying for
something (regardless of the price) that they haven't experienced yet. Sure
reviews and screenshots help ease this tension as well as the standard $0.99
price tag, but I don't think it's enough. It would be really great if users
could download the App and play around with it for a couple of minutes to
"test drive" it and then be presented with an option to buy it.

~~~
cageface
This is a huge shortcoming of the current app store model, I agree. That Apple
hasn't done anything in this direction for years strengthens my suspicions
that they don't really care if the typical dev makes money on the store as
long as the big players earn and the users keep buying phones.

~~~
danielrakh
I agree. If not for the dev, they should do it for the sake of the user
experience. A "Try It Out" option would prevent customers from feeling duped
when they buy an App that they think looks good but turns out to not be of
their liking. Which right now contributes to the customer to be more hesitant
of purchasing the next app tomorrow.

~~~
tonyedgecombe
I suspect try it out would only reduce sales further, it adds a delay in the
process and gives the customer more chance to change his mind.

It might help for expensive software but for something that is a few dollars
I'd see it as a negative as a developer.

~~~
cageface
What's happened in practice is that the market is moving towards free apps +
IAP to make money. I think this tends to ruin most games but for a lot of
other categories I don't think it's a bad model.

~~~
draugadrotten
As a consumer, I like this model when it's done right. I like being able to
"test drive" an application and then paying for the app.

For example with a business app like Grafio, I want to test drive it to see if
it works for me. Then I can pay a significant price for the app - if I am
using it in a business setting my time is worth hundreds of dollars per hour
and the prices of apps are not really a significant expense. I would want
development of Grafio to extend further towards supporting my business needs,
which is Visio import/export, and I would gladly pay for that feature.

I dislike when the free app is missing important functionality (this defeats
the test drive aspect) and I dislike when the in-app is a subscription. I find
it obnoxious when apps have too many in-app purchases. It becomes an annoyance
to have to pay $1 to read, $1 to write, $1 to save. Just ask $3 for "full
functionality" from the start. Don't be silly.

I like when the app is fully functional and I can choose to pay different
amounts to support further development.

~~~
chj
As a developer, I also prefer to have test drive option. Some apps can't be
test drive (for example, casual games), but for productivity apps, it is a
must have feature and windows phone has it from day 1.

------
itry
The Site has an almost unreadable font for me. Its ugly when in normal size:

<http://browsershots.org/http://www.marco.org/>

(Check the Firefox 22 shots)

And gets worse when I increase the font size:

<http://i.imgur.com/jU1swoq.png>

Why is that?

~~~
swombat
It looks great here. Change your browser, or perhaps change your font
rendering settings if you're on Linux or Winblows?

------
robomartin
I experimented with one of my apps (www.TommyTeaches.com). I made the mistake
of releasing it as a paid app at first. It didn't do so well. I switched it to
free and it took off. Everyone at my kid's school got it and they let others
know. Through analytics I can see it is being used for long periods of time by
many kids every day. Tried the teaching approach with kids with mild learning
disabilities and it made a difference in a number of cases.

All of that is good, however the problem is that in order to be able to
justify completing the series I have to show revenue. Placing ads in apps for
3~5 year old kids is not an option. One thought was to place ads in screens
off the main game (Settings, etc.) to at least capture a minor revenue stream.
I have that build but haven't released it yet.

The problem with the expectation of everything being free is what it does to
the ability to innovate and explore. Apps don't cost zero to develop. As much
as it hurts me to think it, I am not sure I can justify attempting to innovate
at the early education market because there's virtually no money in it for the
vast majority of developers. Even paying for logo and graphic design is
impossible when your revenue is zero or near zero.

For me at least there seems to be far more traction and revenue in the
specialized utilities segment.

On the other hand, it is hard to pay the iOS software world attention when we
can charge $250 to $350 per hour for mechanical, electronics hardware and
software development in certain verticals.

~~~
swombat
Just a thought, without knowing your app very well or the usage the kids make
of it, but it sounds like some kind of new feature unlocked via an IAP may
make sense.

Right now it looks like you're releasing each content pack as a new app,
that's also free. There's your problem. Release content packs as IAP, give 3
away for free and charge $1 each for new content packs. There's your revenue
stream. If the app is really teaching the kid stuff, parents will probably
pony up and pay a few bucks now and then, since they care about their
children's education.

------
fbpcm
I put my first app into the App Store last July and had it selling for free
until 2 months ago when I set it to $1.99. People continued to buy it even
though I don't advertise it.

After that success (2 figure revenue!), I built another app and put it on the
App Store for $9.99. People are downloading that as well. I admit that I am
making more off of contract work, but based on my estimates the App Store
converts really well, even at >$5 and has the potential to be profitable with
paid apps.

(anecdotal evidence based on my sales of <http://free2goapp.com/download>)

~~~
gregorious_c
Do many people sell their app for free first, and then increase the price?
Interesting model. Can you provide some more specific data about the sales?
That sounds like a good idea to get some traction and reviews. Were people
upset at all with the price increase?

Congrats on the success!

------
wben
I have an app in the iOS photography category ranked about 100 in sales on
iPhone and iPad. My monthly sales are $6000.00 US (after apple's cut) selling
for 2.99. Not bad, I'm happy and all, but it's disappointing to think that
there are only 100 developers in the photography category making more than
6000.00/mo (assuming that they have only one app)

The user interface that iTunes provides on the phone, tablet and desktop is
super clunky and slow for exploring apps. Click, wait, click, wait. etc. Why
no tabbed browsing so users can load and look at 50 app descriptions in the
background?

~~~
rbritton
And don't forget that many of the top 100 are Apple, Adobe, and large
magazines.

------
facorreia
A very thorough analysis. I think it's lacking an important category, though:
the free apps that generate revenue by (usually compulsive) in-app selling, a
la Farmville. They seem to be common among the top grossing.

------
melling
Does selling an app at $2.99 vs $1.99 reduce app sales? I can see where that
might not affect sales in the US and Europe but what about Asia and other
emerging markets?

------
homosaur
Easy to say for the one man company.

------
youngerdryas
I have a very niche app that brings in a small but fairly consistent revenue
stream, whenever I hear crickets in the sales department I raise the price
from .99 to 4.99 and slowly come back down every week tripping the "app on
sale" wires. Usually works.

