The market for paid apps, and the sum of all compromises

Instapaper and The Magazine developer Marco Arment has an interesting piece up about the market for paid apps, and its viability, on

In most categories, if you either solve a new problem that a lot of people have, or solve an old problem in a new and better way, you can sell a paid app today just as well as you could in 2008. In fact, the market is much bigger now. But, as with any maturing market, you'll need to do more to get noticed since so many problems have already been solved so well.

Here are the problems as I see them, and they're not-coincidentally parallel to the problems associated with iOS gaming:

  1. Apple wants to keep things simple, so they compromise on features. Apple does not allow for trials or demos on the App Store, which means all purchases are, for all intents and purposes, up-front, as is, and (mostly) sight-unseen.

  2. Buyers want to avoid risk and paying any more money than they have to, so they compromise on buying apps they might otherwise enjoy. Since there are no trials, absent urgent and immediate need or factors like addiction or ego-gratification, most people won't spend any significant amount of money on apps.

  3. Developers need to sell apps, so given the previous two realities, they compromise on money by holding sales, dropping prices, or trying alternate business models.

So we end up with the sum of all those compromises: apps we can't try before we buy, so we don't buy them until they go on sale, their price drops, or a free alternative comes up, which means we (mostly) only get apps that can survive under those conditions.

There are things like brand and reputation, social influence, etc. that can alter that reality slightly—a new app for one of our favorite things, by a rockstar developer, that all our friends tell us we simply must buy now, now, now—but not enough to alter the general course of the App Store.

If you make another RSS reader or Twitter client, there are certainly a lot of people who could use it, but you'll need to compete with very mature, established apps.

You're also competing against the known with the unknown. How do I know if a new RSS or Twitter app is better for me than what I'm currently using, unless I take a risk on a paid app?

And that's only a silly $1 or $5. Now imagine a $50 app, or a $150 app. For those developers who do Jury-up, how do you help them succeed? Sure, the more niche the app, the smaller and more informed the customer base usually is, but what about new ideas, experimental ideas, ideas that help shape the future?

Arment is right in that there remains a lot of opportunity in the App Store, but until we get a way to reduce risk for buyers without forcing devaluation on developers, there's nowhere near the opportunity there could be, and should be.

(And yes, search and discoverability need to be fixed as well.)

Go read Arment's piece, and I'd also recommend Federico Viticci's take on MacStories.

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Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

The market for paid apps, and the sum of all compromises


Two strong points here, a recurring theme from your presence on podcasts:
1- make apps refundable or trailed.
2- improve availability to be found.
I'm with you on both these points. I'd sooner be willing to try some of these apps for a day or two, if I knew I could decide with a more informed mindset. Otherwise, my money is precious and I'm not willing to risk it. It's almost like an impulse buy is required with the App Store. Not much information can be taken from a few written articles. But hey, most software has always been like that..

I agree. Many if my purchases are delayed because of the unknown. I wait for a number of reviews or friends/colleagues recommendations before I take the leap. Sometimes I am happy with the outcome, other times no. A try before you buy program would be very helpful and will let consumers become more willing to try the unknown which may result in higher income for all involved. This is not needed for all developers or apps. Established companies with well known app franchises (I.e. angry birds) do not need to offer this as consumers know what they will get with the products. Many companies use the alternative method of offering free, less capable, versions of the app but I have found that typically it is one of the locked out features that sells the app as useful to me and I would not have known unless I purchased the full version. Try before you buy, that is the way to go.

I also dislike buying apps when I'm unsure how good they are. When new apps hit the store I usually wait until they've been out for a while to see what the reviews will be. I also like to wait for review sites to review the app after it has been out for a while and the reviewer has actually been using it for a period of time, rather than a quick write-up of a new release just because they were notified by someone (the dev?) that the new product is suddenly available in the App Store. As a means to further combat this problem I use AppZapp Pro, AppShopper, and Apps Gone Free to get the quality apps I want, or need, at a huge discount or for free.

Spending money multiple times to find one app that fulfills a need I have, or solves a problem I have, just to find the one app that actually does fulfill successfully, is expensive, time consuming, and frustrating. So I also believe the time for a free trial period is well over due. Having this option would allow us all to fulfill our needs and wants a lot more easily and quickly.

And lastly, I honestly have no problem paying a fair price for a quality product that that does a great job consistently and efficiently, and with a great UI. I already own some of these and they weren't cheap at all.

I'm not a big app buyer and don't plan to be but just a comment.

I think the app store needs significant organizational improvement, from the web, to itunes desktop to the phone. And i think that really hurts usability and i'd extrapolate sales.

I don't think you can buy on the web. You'd think think maybe there would be a simple way to buy on line, have it qued up in your account and then on your device a way to open the app store and download cued up purchases if you want to.

Itunes on the desktop Needs to be faster. I only use it for playing music 99% of the time. Piss poor performance mean i don't use it and that's a problem because searching itunes on a phone is worse. but first desktop itunes app searching It's lacks advanced searching so finding things is a pain in the ass. The store needs lists views so you can get as much info on the screen as possible. The tagging and identifying of apps need to be better so searches would be accurate. They need to ignore stuff nobody buying apps cares about like gross totals. That's not what consumers care about. Free, paid, popular, most recent are probably sufficient lists if you even need lists, since you can accomplish all that with better searching. Maybe one list of "trending" is sufficient and let people narrow down the rest through searching. It's also poorly organized in that it's really a mass of icons and banners, and drop down menus. It's organized as if they purposely ignored user comfort.

As for the app store on a phone. it's near unusable. The ONLY way i use it is to directly search for an app i know the name of already. Then i close it and stop using it. searching is horrible resulting in one app per page. Again, just like the desktop itunes app store interface lack of advance searching hurts it. People simply are not gonna give themselves carpal tunnel swiping one app at a time page results. Categories like "noteworthy" simply don't mean much to regular people. How is "noteworthy" distinguished from "what's hot." There's a category now on their called "under the sea." wtf is that for? Nothing against those games but who is out there searching for "apps that take place under the sea?" I mean it's a mess, organizationally, logically. How can i impulse buy if it's virtually impossible to find anything to buy. Oh one last thing. There truly needs to be a way to separate the mass of "games" apps from the rest. By search filters or settings. I know the writers of this site love iphone games and they are fine but there are many like me that simply don't want them in search results cause we aren't buying any of them. Cluttering results with games merely drives buries what they may be looking for in a sea of apps they don't want to look at forcing them to simply quit.

Even if i was the sort that bought apps a lot the myriad of apps store problems mean it's simply not worth my time to use it. It's simply much easier to randomly stumble across an app on a website like the free Yahoo Weather, search, download, close, and move on. Is that gonna get me to buy? Nope.

I agree I'm always hesitant to but expensive apps because I've been burned by so many cheap apps. I've purchased some expensive apps and felt I got every penny worth with those apps. The apps like omnifocus, 1password, bento4 and more are expensive apps, but are worth the investment. I believe these apps would benefit from the trial period. I wanted these apps for the longest, but just didn't want to be burn by a bad app. The app meetings is one of those apps I purchased, but the app didn't have the functions I needed. I think people will pay for the app if giving the trial to test to see if the app provide your needs. Great article!

I am starting my fourth month in the iVerse. I am used to a trial and freemium app marketplace. Some trials I liked, others I am glad I did not have to spend any money on. I have purchased several apps that I got to take out on a test run - either a full fledged app for a limited number of days/uses, or a limited service app that was unlocked when purchased. I'd be happy to do it again, but I do not see me even spending 99 cents on any app that I can't have a test drive with.
Dissatisfied in app land