

How to price your iPhone app out of existence - boucher
http://www.losingfight.com/blog/2008/11/15/how-to-price-your-iphone-app-out-of-existence/

======
mattmaroon
His comments on undercutting Sega are exactly incorrect. You, a random
developer, have little expenses and can stand to make $50k off of an app.
Sega, on the other hand, has a ton of expenses, spends probably millions just
to make a Super Monkey Ball, and can't afford that.

------
ryanwaggoner
He may be right but I would have liked to see a deeper understanding of price
elasticity of demand, as well as some data to back up some of his claims.

~~~
drusenko
right, i'm not sure why the author feels like he has a god-given right to make
$50,000/year no matter what kind of iphone app he/she develops.

go ask any of the top 10 iphone application developers -- i don't think any of
them are having trouble with the 50k/year barrier. the marketplace will be the
same as the web: the majority of attention goes to a small number of sites.
just because i put out a website of marginal value and charge $9.99 doesn't
automatically mean i'll be making $50k/year -- the issue is a lot more
difficult than that.

~~~
briansmith
He didn't say that he has a right to make $50,000 year no matter what. He said
that if you are not going to make $50,000 a year then your company is not
going to survive, so you need to find a way to make at least that much money.

How much money the top 10 developers make is inconsequential to all the other
developers that aren't in the top 10. The top 10 will always be filled mass-
market applications. Most developers aren't developing applications with mass-
market appeal.

~~~
natrius
He's still assuming that maintaining one app will consume a person's entire
capacity for the lifetime of the app.

One app does not have to be your sole source of income.

------
DenisM
What the appstore needs is not higher prices, it needs fewer developers: if
there are 20 apps doing X then each only makes enough money to get by, but if
there were 2 apps doing X they both could invest into making new features.
What we need is a serious recession with a healthy round of bakrupcies and
mergers.

~~~
briansmith
More people losing their jobs means more people with free time to build an
iPhone app while they look for a new new job. Plus, a poor economy lowers the
market for these unnecessary goods. So it is likely the result of a serious
recession is more competition for fewer customers.

Apple could reduce the number of iPhone developers by charging more for the
SDK, or by charging a larger transaction fee. I wouldn't be surprised if Apple
did increase the costs substantially sometime soon. In particular, I wouldn't
be surprised to see the standard transaction fee increase substantially, with
tiered percentages based on price and/or volume (e.g. start $1 flat
transaction fee + 30% of the price for the first 1,000 copies, then reduce the
percentage gradually for each 10^nth copy).

~~~
DenisM

      More people losing their jobs means more people with free
      time to build an iPhone app while they look for a new new job
    

It could swing either way, I agree.

------
DenisM
The other post by the same author is a lot better:
[http://www.losingfight.com/blog/2008/11/07/can-you-make-a-
li...](http://www.losingfight.com/blog/2008/11/07/can-you-make-a-living-off-
an-iphone-app/)

------
vaksel
I don't think its possible to raise the prices. I mean sure you are supposed
to compete on things other than price...but most iPhone apps aren't rocket
science. Anything you can come up with, can get copied very quickly. So why
would someone pay $9.99 for your app, when they can pay $.99 for an app that
has all your features, on top of whatever else they come up with

~~~
briansmith
If you build a good app for $20.00 then somebody might clone it for $2.00.
But, will they survive on their clone? Probably not, if they are living in a
rich country. You just need to outlast these cheap knock-offs until their
developers get bored and move onto something else. It might be a constant
stream of knock-offs, but the longer you last, the better the reputation you
build. Reputation is worth a _lot_ , especially with people whose lives don't
revolve around software development.

A good developer in SW Asia, SE Asia, Africa, or Eastern Europe will always
have an advantage over you regarding price. $10,000 or $20,000 a year goes a
long way in those places (I lived in Thailand for $1K a month without even
trying to be cheap). But, that is the case with other parts of the software
market and somehow Asian, African, and Eastern European companies haven't
taken over the while software development market yet. Probably in the long
term they will, but that is years off.

~~~
HeyLaughingBoy
Right, but the same could be said about the USA. My monthly burn is _much_
higher than $1000 :-( BUT, living in rural Minnesota as I do, it really isn't
hard to lower your living cost below $1000 if you want to and are single (When
I lived in the city of Minneapolis, my monthly bills including mortgage
totalled probably around $1,500). Being American and living here in the US
gives me a huge advantage on understanding our culture and being able to
design a UI that appeals to Americans and to be able to support them that a
smart Thai doesn't have.

I am seriously thinking of getting into iPhone development even though I've
only seen one once :-) Why? Because I already design & build mobile Bluetooth
hardware and I can see many apps where the mobility of an iPhone would result
in a great product. I don't care about consumer apps, but there are tons of
small business applications that have been waiting for this kind of
connectivity in your pocket!

~~~
briansmith
While you _could_ get by making $1000 a month in Minnesota, that isn't
sustainable for the long term since you could just go get a programming job
where you earn over $1000 a week. If you aren't making $100,000 a year
developing your application then you are losing a lot of money once you factor
in opportunity cost.

Regarding competition from our foreign friends: I think we are both thinking
the same way here. Right now, we don't really have to worry about ultra-cheap
competition too much. Eventually, I think we will--the cultural advantages you
speak of are a short-term advantage, not a long-term one. My Thai friends
already know a lot about Western culture because they deal with us all day
long in Thailand. Whatever they don't know, they can learn. But, almost none
of my Thai friends could afford to buy an iPhone right now; even if they
could, they work 80 hours a week at their job so they wouldn't have time to
develop anything for it. But, slowly, all of that is changing.

~~~
HeyLaughingBoy
Yup. The $1,000/month comment is only to show that it can be done, not that
I'd want to only have that level of income. But it provides flexibility by
letting you start small. I need to keep my day job for a while because it will
be a long hard slog before my side business can come remotely close to
providing me the income I need :-(

The stuff I build is industrial monitoring devices, so I purchase off the
shelf Bluetooth-serial interfaces and incorporate them into my products.
Google the Sena (Parani) and Roving Networks products. They are easy to use
and reliable. Being able to monitor a process without needing to run cable to
it is a killer app waiting to happen!

------
ajkirwin
This post seems to gloss over the point about VALUE.

Sure, sell your app for $9.99 if you want. But it'd better be worth it.

And almost all of the apps ON the app store are little quick pieces of fluff,
barely even worth 99 cents.

Even the better pieces of software are mostly timesavers or memory aids, games
notwithstanding.

The problem seems to stem from the fact that there is this expection to spend
a few weeks and crank out an app, then live on it for a year, when I just
don't think this could be the case.

iPhone apps just aren't as big or useful as desktop apps. I'm not saying there
aren't useful apps, but come on, you're not gonna see Photoshop or Visual
Studio or.. World or Warcraft for the iPhone any time soon.

And this doesn't even get into the fact that a lot of apps I could use can be
replicated just by opening the browser and going to a website. And that one
app I WOULD buy, I can't, without jailbreaking. (Ah, Podcaster. C'est la vie.
And that app is only 4.99 too.)

~~~
cpr
What do you all think of our graphing calculator app, Grafly
(<http://grafly.com>)? Is it worth $9.99? We think it is, in that there's
nothing like it on any other platform at any price.

Like all the "please rate my web site" posts, I'm interested in what HN
denizens think.

Thanks.

~~~
potatolicious
I'm sorry to say, but I don't perceive it to be useful at all. I'm probably in
your target demographic - college student in engineering, and I have to tell
you that anyone who's going to be doing any sort of work with graphing
calculators would prefer to buy one than use their iPhone. Here's why:

\- Physical buttons: when you're chewing through problems you absolutely MUST
have physical buttons with tactile feedback. Like the calculator app on the
iPhone (the default one) the buttons are way too small to even begin operating
quickly.

\- Battery life. My exams are often 3-4 hours long, and an iPhone would not be
allowed as a legal calculator. Even if it were, the iPhone would have trouble
holding a charge through the entire exam.

I just don't see much of a market for it. At a lower price point maybe - I see
this app as being useful for possibly one-off equations, but nobody who needs
this sort of software will use this app as their primary graphing calculator.

Now, what I _would_ gladly pay for is a graphing calculator software that
comes with a USB keypad. I have my graphing calculator with me always, but
sometimes it's slow and the screen sucks. It would be wonderful to have the
friendly physical user interface of the calculator and the power of the PC.

~~~
cpr
Thanks for that feedback!

The physical buttons argument is a good one.

I don't think the battery life issue is a real one--when you're not actively
calculating a new graph, the app is doing very little. I suppose we should
actually benchmark using it for 3-4 hours at a time. Can't argue about legal
calculators.

Though saying "friendly [physical] UI" seems like an oxymoron to me--physical
graphing calculators have some of the worst graphics I've ever seen.

------
mellow
I don't think I have a ceiling on the price I would pay for an iPhone
business/productivity app. I would pay hundreds of £/$/€ if the app made me
that much in return.

~~~
Balsamic
Target market comes into play in this case. Businesses make decisions this
way, individuals don't.

~~~
LPTS
smart ones do.

------
zack
i bought beejiveIM for $16, it kicks ass and is worth every penny

