App Prices Are on the Rise, But Is That a Bad Thing?

We go through a lot of apps here at Mac.Appstorm. We review a ton of applications and we research and test even more. A fair amount of time is spent on trolling the App Store as well as the web searching for applications worth a review.

I’ve become increasingly more aware that I’ve developed a bias toward paid applications. I don’t think I’m alone with this viewpoint. I see people in my circle more interested in paying for apps now than more than ever. What does this mean? Is the market maturing?

A Paying Bias

When the iOS App Store was launched there was some dissent about the low pricing of the applications. The argument for a $0.99 application was that it would, with the help of Apple’s ecosystem, sell on a much larger scale than otherwise possible. More people would be enticed to try out the application at that price as well. For the most part I’d say it’s pretty evident that that idea was true. A lot of developers have done very well selling $0.99 applications.

When the Mac App Store launched the pricing wasn’t as big of an issue as there was already some precedence to application pricing in that world. But, there were plenty of free options available as well. It’s hard to say exactly what a developer’s strategy would have been with a free app, but possibly to get some notoriety in a new marketplace (6Wunderkinder used Wunderlist to build up to the premium Wunderkit).

As I mentioned earlier, I’ve noticed a recent bias with myself concerning paid applications. I know it’s not always correct, but they feel like the safer bet to me. If an application is free I’m immediately skeptical. What’s the catch? Ad bombardment? Half the functionality? There has to be something. Sometimes there is no catch, but most of the time there is. It’s fairly difficult to find a truly free application (fully functional, no ads, etc.) that isn’t connected to some other overarching service (i.e. DropBox, Google, Facebook). I’m just not that interested in all that comes along with a so-called free app so I typically avoid them.

Prices are Going Up

Along with realizing my own feelings about this I’ve also noticed the prices of applications going up in general. Like I said, we spend a lot of time researching apps and I am definitely finding fewer free ones and fewer of the super cheap ones. Gene Munster with Piper Jaffray released a report this summer that clearly illustrates the increase in app store prices. There was a dip in overall pricing in 2010, but 2011 saw a 14% increase. I think the market and the consumers are maturing.

I don’t think I’m the only one with the paid app bias and I think that developers are very well aware of it. When I research an application I’ll search for it both in the App Store and throughout the web. I’ve noticed some instances of app price contradictions. I’d read about an application from a few months ago mentioning one price and then go to the App Store and see another. There could be several other factors involved here of course, but the instances I’ve seen lately are always price increases. Either from free to paid or a raise in the cost.

Final Thoughts

This definitely isn’t a bad thing. I think a vast majority of the prices developers are asking for their apps are completely reasonable. In fact, there are probably still many instances where apps are actually underpriced. What I think has happened is that people have realized the value in applications and the developers are rightfully capitalizing on it.

It’s really more of a shift in the direction the App Stores should be in. I think we’d all (developers excluded) love a world where we could download any app we wanted and not pay a dime, but that’s not how a retail market works. People are becoming increasingly more willing to pay for the apps they want and need and that’s great for the entire ecosystem. Developers get what they deserve and continue to innovate and we as consumers are happy to compensate them for it. That’s the way it’s supposed to be and it’s cool to see us moving in that direction.

Does it still bother me a bit when I see an app I want to review has gone from free to paid? A little. But in the end I think it’s better for everyone. Consumers get better apps and the developers get compensated for them. Everyone wins.