Cause and effect: Apple's upheaval of the Mac app market

Cause and effect: Apple's upheaval of the Mac app market

The Mac App Store has been a boon to many Mac developers since it opened for business in 2011 - more than ten thousand Mac apps are available for download, and any one of the millions of customers who have an Apple ID can buy apps. But it's come with some consequences that have fundamentally altered the way that many developers conduct business, and it's not all for the better.

Why we needed the Mac App Store

Apple previewed the Mac App Store in 2010 at its "Back to the Mac" event, when it gave invitees a look at OS X Lion for the first time. At the time, Steve Jobs sketched out in broad strokes what Apple planned to do with the store: To offer Mac owners the same experience they were already accustomed to with the iOS devices, but on the Mac.

Mac App Store intro

Jobs said that the Mac App Store wasn't there to replace other ways of download software, though it was clear that Apple's intention was to compete.

"It's going to be the best place to discover apps, just like it is on the iPhone and the iPad," said Jobs. "It won't be the only place, but we think it'll be the best place."

The Mac App Store opened with a bang in January, 2011. Within 24 hours a million apps had been downloaded; later that year Apple reported that 100 million apps had been downloaded. It is, by any measure, a success.

And it came at a time when many Mac app developers were desperately looking for a better way to sell their wares.

Apple retail stores were one of the very few places that OS X developers had a reliable place to set boxes on store shelves, unless they had the resources to produce cross-platform products that could also be put on the shelves of retailers who sold PC boxes, like Best Buy. Even then, retail sales were a sketchy proposition: publishers ran the risk of having to take back unsold inventory, for example.

As Apple ramped up iOS product sales, they learned that iPhone and iPod buyers were more interested in purchasing accessories to go along with their new acquisitions - cases, headphones, and so on - and those began to squeeze out the software on Apple retail store shelves. By the end of 2010, it looked dire for many Mac software publishers, so the Mac App Store was a lifeline.

Unintended (or perhaps intended) consequences

As I said at the outset, the Mac App has been great for many developers. I've had developers tell me that without it, they would have either gone out of business or (horrors!) would have had to start developing for other platforms in order to survive. The Mac App Store has brought an entire population of Mac users to third-party apps, many of whom may never have found the software otherwise. It's easy to click on a Dock icon and use your Apple ID to buy software. It can be scary for the average user to fork over their credit card info on a web site they've never seen before.

But as the influence of the Mac App Store has grown, Apple's changed the playing field.

One prominent example of that was in 2011, when Apple told Mac App Store developers that their apps needed to be "sandboxed." Sandboxed apps can't make any changes to the operating system and can't change the way other apps work. If something goes wrong with a sandboxed app - if it crashes - only it is affected. Other apps and the operating system will keep working as if nothing happened.

This has excluded an entire class of applications from being able to be distributed on the Mac App Store: Rogue Amoeba's excellent Audio Hijack Pro, for example, records any audio from any app, but because of the way it works, can't operate in a sandbox environment. Smile Software's fantastic time-saver TextExpander 4 similarly didn't make the cut.

Developers in a bind with sandboxing have two choices - either get their software in line with Apple's system requirements, thus sacrificing features and functionality, or just distribute the software themselves, hoping that customers will find them.

In some cases, it's also required developers to exclude specific features from the Mac App Store versions of their products. Bare Bones Software's text editor BBEdit is available in the Mac App Store, but only without command line tools that are included with the version downloadable from their web site. Bare Bones' workaround was to offer a separate installer for download. Other developers have not been as fortunate.

For Apple, sandboxing is a matter of security. Apple doesn't want Mac App Store developers to have the ability to make changes to the operating system kernel or to the way other apps work, because they're concerned such access can cause system instability, or at the worst can be abused and exploited. Apple wants Mac App Store customers to be assured that they're not going to risk any problems down the road with their apps. It's hard to argue with that, but as a result it's prevented some developers from offering products of great value to Mac App Store customers.

The trouble with upgrades

Another consequence of the Mac App Store has been a downward movement in app pricing. It has become convention for some Mac App Store to follow the trend of the App Store - to price their software lower in the Mac App Store than it would be available otherwise. Apple itself has led the charge by pricing some of its pro applications significantly less than they cost in boxes. Aperture, its pro photo software, for example, is priced at $79.99 from the Mac App Store. When it debuted as boxed software, it cost $199. Final Cut Pro X costs $299.99 on the Mac App Store, the same price that Apple charged Final Cut Pro users to upgrade to Final Cut Studio in 2009 (though Final Cut Pro X separates the previously-bundled Motion and Compressor apps, both of which are separate $49.99 downloads from the Mac App Store).

Like the iOS App Store, the Mac App Store provides no mechanism for developers to charge less if a customer is going from one major revision of an app to another. That puts developers that sell software outside of the Mac App Store at a disadvantage. Mac developers routinely offer upgrade discounts to incent customers to pay for a major release. Without a mechanism to do so in the Mac App Store, customers are, in essence, being penalized for using that ecosystem. But the downward pressure of Mac App Store pricing often proves an irresistible lure for budget-conscious consumers.

Developers have responded with compromises. Most frequently, they'll time a new release on the Mac App Store with a temporary reduction in the price - something to incent Mac App Store customers to pay for a new release, maybe matching the upgrade price for customers buying the software from their web site. It even gives new customers a reason to download the app. After all, who doesn't love a sale?

But Mac App Store customers who don't act during that window lose that savings, putting them at a disadvantage for using the store to begin with.

This issue recently bubbled to the surface again thanks to The Omni Group, developers of OmniFocus, OmniGraffle and other utilities for Mac and iPad. In August, the Omni Group announced the release of a new tool called OmniKeyMaster.

The utility gathers Mac App Store versions of The Omni Group's apps that are already installed on your hard drive, and generates equivalent licenses from The Omni Group's own store. As a result, you could buy an upgrade from The Omni Group instead of having to pay for an entirely fresh copy from the Mac App Store.

Unfortunately, Apple stopped them in their tracks. Ken Case, The Omni Group's CEO, posted a blog entry earlier this week announcing that they wouldn't be able to do what they said they could after all.

So long as we continue to sell our apps through the Mac App Store, we are not allowed to distribute updates through other channels to apps which were purchased from the App Store.

We still feel upgrade pricing is important for customers purchasing serious productivity software, since the initial value received from purchasing an app like OmniGraffle or OmniPlan is much different from the incremental value of upgrading that app from version 5.0 to version 6.0. We will continue to ask Apple to support upgrade pricing in the App Store, and I would encourage others to do the same—but until that happens, upgrade pricing will only be available to customers who buy our apps direct from our online store.

The Omni Group has historically eschewed price adjustments on their software from the Mac App Store; OmniKeyMaster seemed like a compromise to be able to attend the needs of their customers while still allowing them their preferred method of buying software.

The immovable object meets the irresistible force

Apple shows no signs of changing its tune on upgrades or sandboxing or other issues that affect developers' ability to make and sell Mac software. While Apple isn't forcing developers to use the Mac App Store, there's a very strong incentive for developers to come on board.

And by doing so, developers have no choice but to play by Apple's rules.

Otherwise, it's back to the old way: set up a web site and hope that advertising, positive reviews and word of mouth is sufficient to get the word out about your product enough for it to be successful.

In some cases, as with Pixelmator, developers have decided to throw their lot with Apple exclusively. But that's not a possibility for some developers who have created businesses outside the Mac App Store that they're not willing to sacrifice.

I sympathize with developers who find themselves in this position: they're forced to walk a tightrope between how they did business and how they can do business in the future. For now, for some of them, there's no choice but to work outside the bounds of the Mac App Store all together. Maybe that will be enough - after all, millions of Macs are being sold every year, and many of those are being sold to people who have never used a Mac before. Those are fresh customers for everyone who makes Mac products. Others have found compromises they can live with, even if it complicates their development and support.

The majority of new Mac buyers will find the Mac App Store enough for their needs. And for as long as developers try to strike a balance between the Mac App Store and the old way of distributing software, there's likely to be friction. This issue will come up time and time again. This friction will increase over time as more and more new Mac users adopt the Mac App Store as their preferred method of software acquisition.

Eventually, the old guard will need to adapt. Apple isn't looking in its rear view mirror. Neither should they.

Peter Cohen

Managing Editor of iMore, Mac and gaming specialist and all-around technologist. Follow him on Twitter @flargh

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Cause and effect: Apple's upheaval of the Mac app market

13 Comments

I like sandboxing. I think that it is another tool to ensure the device remains stable. Not exactly the wild west some people like, but it is consistent with Apple's image of a builder of solid, reliable devices.

Unfortunately the pricing issue is consistent with Apple appearing overbearing, uncompromising to a fault and greedy. The App Store is a great point of entry for 1 stop software shopping. But it lacks the basics that you mentioned regarding upgrade prices and even trials. Such things should be a cakewalk within the app store as Apple knows who you are and what versions you've purchased. This info should make upgrade pricing simple....almost Apple-like. It just makes Apple look like a bunch of arses for being so obstinate on such things.

Great overview btw Peter.

I'm uncertain why no one has considered pushing for Apple to make in-app purchases a mechanism for upgrades. It would seem like a natural location for someone who wants to upgrade to the next version and wouldn't be nearly as complicated.

Person pays in-app upgrade fee, Apple gets their cut, customer gets access to next gen version.. everyone happy. This way you don't see a slew of 'upgrades' in the App store. Which I think might be part of the reason for avoiding it.

Then again.. I think making Apps more affordable was probably a main reason for no upgrades. I believe this was very intentional.

The main reason is of course developers would abuse the privilege. Instead of fixing bugs in the apps they sell, they would sell "upgrades" that did the same thing. Even if bugs were free, minor feature changes and re-thinks would all cost money. The end user that didn't want to pony up the dinero all the time would be left with buggy, out of date software that didn't perform as expected or was obsoleted the next time Apple updated the underlying OS. Since the OS is updated yearly, this would be tantamount to paying yearly subscriptions for your software.

It would all go south very quickly. Despite what you read on tech blogs, most developers are pretty far from sainthood.

I am going to cut to the chase and tell you how very VERY wrong you are. I used to think that way before I started doing software development for a living and started really seeing how that time is done.
Sorry but you are paying for support and added features. Time is not cheap. My time is worth around a $125-150 an hour. That is pretty much the break even point for the company I work for if we charge you for custom coding. Now that $150 an hour covers things like QA time and what not that is not something we bill for. We bill for how many hours it will take a dev (aka someone like me) to get it done and hand it off to QA. Depending on how complex it is there can be a few back and forth with QA fixing all the bugs as QAs job is to go a lot deeper and test more odd ball cases.

It is pretty clear you are NOT a developer nor has a good understanding how development work or time. What looks like a fairly simple feature often times weeks to even months worth of time in it. Bug fixes hate to tell you this take time to fix. Often times a lot of time because first we have to track down exactly what is causing it which can be even more complex if it is a rare case. I have spent better part of a few days tracking down a few bugs which resulted in an entire 2 lines of code to fix but it took me that amount of time to figure out exactly what and where those 2 lines of coded needed to be. Plus god knows how much test code was put in there just to see exactly what was going on.

Yes I sound rather mad because yeah I do this for a living and have a much better understanding of what is going on under the hood.

Remember developer time is not cheap. Developers starting salary is around 60k per year plus benefits. So after to factor in everything a single start developer is going to cost a company around 85k a year and that is just covering paying for employee salary, benefits and taxes. So on top of that 85k a year a company has to pay for any equipment, software, and training for the employee which yeas add several more thousands per year to the employee. I have multiple computers, multiple mobile devices and god knows how much in software my company has to pay for just me.

Apple system hurts developers. Sorry but updates are part of the picture. Security fixes are one thing but bug fixes yeah older version we do not touch unless it is a major issue.

Sum it up. If you want stuff fix and those "minor" features have huge chunks of money and time invested in them and yes they need to be paid for.

Wait a minute, what you're describing as "minor feature changes and re-thinks" is exactly what a lot of apps do as paid updates today, and that wouldn't be any different in an in-app purchase scheme. If you don't want it, don't buy it… kind of like how I used to only update Quicken when absolutely necessary for a new architecture or OS, because the annual updates weren't worth it (could say the same about Parallels today, I guess).

On iOS, the App Store has kind of destroyed productivity apps for the iPad, because the only thing making money is freemium games, and that's convinced users that apps should be free, and that even $5 is a rip off. This would be a disaster on the Mac, because productivity apps often can't be adapted to an in-app purchase scheme. You couldn't, for example, sell a bare-bones app and then use I-AP to unlock features like printing or export, because Apple's guidelines explicitly prohibit using I-AP to sell features provided by the OS (see iOS App Store Review Guidelines, section 11.8). You also can't sell an app that's subscription-based (hello, Adobe Creative Cloud!) or time-bombed so it turns back into a trial after a certain time without payment, because that's again forbidden by the Guidelines (section 11.9).

Be careful what you wish for: expecting apps to be cheap up-front and freely updated forever is not sustainable for developers, and what you'll get instead is no apps at all.

Just like users, developers squawk a lot when Apple changes the rules or changes the game but they usually come around in the end... because they have to. I've used Apple products since 1982 and have squawked enough times myself, like when the switch from PPC to Intel happened.

Back in 2000 I sold a piece of software for BeOS at $5.00 a pop. The company that handled the credit card sales jacked up their fees so much that I ended up making nothing after I gave the developer his 50% cut. I would've welcomed a 30% fee, although there was a centralized marketplace at the time.

Sandboxing: A good thing. While it does limit flexibility or outright prevent some apps from functioning every decision has been made through the lens of security. That cool app that injects some feature into another app is potentially a vector for a security breach. Being too open can be a Pandora's Box.

Paid Upgrades : Probably not going to happen. It simply adds another layer of complexity. Omni is a great company but no one is going to confuse them for a company that sells cheap software. $80 for a task manager? Does buying the next upgrade for $50 really lessen the blow or does the intelligent just realize that whether they pay $80 upfront and $40 the next go around it's the same as if they just paid a more reasonable $60 for each version. Under one scenario you have to deal with paid upgrades and under the other you do not. Simplicity should rule the roost here.

I don't see any real problem with any of the "limitations" of the App store. The whole idea is simpler. No upgrades, no upgrade pricing, safer software and lower prices due to the higher volume. Developers make the same or more money. Users pay lower prices. Apple gets a valuable addition to it's OS and a more varied software library. This is a classic win-win-win.

The only ones complaining really are people like Omni group who are just rapacious a-holes that want to have their cake and eat it too. Their programs were the darlings of the Mac world before iOS and the App store and the new pricing models came about, and now they are on the outs because of their outrageous pricing behaviour. They disagree that programs should be affordable for the end user and are determined to fight the trend all by themselves. They want higher volume as *well* as higher prices. In short, they are just plain old greedy.

All I have to say is good luck with that! I don't know very many career Mac professionals where I work that haven't sought to drop their products like a hot potato whereas, as I said, previously you couldn't seriously call yourself a mac person if you didn't use Omni-Graffle. I hope Omni group dies a slow, painful death.

Maybe I am being overly simplistic, but it seems to me that devs could have a method of emailing a personalized discount code to registered users for 30-40% off upgrades through the App Store, kind of like Starbucks does to users for songs and apps.

Personally, I find that for "consumption" apps, they don't have to do much, so cheap makes sense. But for tool and "creation" apps, you get what you pay for, and the devs deserve to get a fair price for their hard work. In the Windows world, try using the discount aisle photography programs compared with Photoshop Elements....

As time goes by, I am increasingly looking for apps for OS X and iOS that go beyond the free offerrings that often find their way to the top of lists in the stores.

This is not because paying for something means that you get something better but more often than not it is because nothing is ever truly free and I am aware that very often my use / content or personal details are very often sold to third parties, either directly or indirectly to advertisers. Furthermore, with Reader, Google has demonstrated that it is not just Applications that have failed to get traction, like Wave or Buzz, that can be mothballed into oblivion.

So, like many others, I am increasingly buying applications / paying for services that now replace the free apps and services that I first adopted when I took up with iPhone, iPad and MacBook.

The issue of upgrades is also somewhat unsettling. I am happy to help keep businesses going by paying for upgrades but Apple's approach to this seems a little intransigent. The outcome of this is that with paid apps like Omni Group products, if there is an out of App Store option, then I will buy it there. With cheaper apps, I tend to rely on the App Store for the advantages that come with upgrades / notifications. I commend Omni's approach to beta, upgrades and hope that Apple finds a new way of handling this increasingly thorny issue.