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.


Add Yours
  • Not a bad thing at all. These dev need to be paid for the hard work. Selling apps at .99 is taking a loss. You are hoping for quantity sales to make up for it. I get so tired of people bitching about apps costing $2.99 etc. etc. If you cant afford $3.00 you need a serious life evaluation.

    These people work hard and should be compensated. If an app does what I need it too and does it well with good support. I’m buying.

    • I don’t think the price itself is a big deal. I think ALL app store apps need trial or demo versions, though. Sure, $3 isn’t much, but when you shell out $3 several times for apps that end up being duds, it makes you hesitant about buying again, rather the price is $1 or $50. It’s tough to judge how good an app is, even based on ratings. I’ve seen free apps with low ratings turn out to be amazing, and i’ve seen $5-10 apps with high ratings that i thought were horrible and useless.

      • Agreed with you on this one.

      • Yep, agree. And no problem with low-cost apps, but I’ll never buy any application without trial version that costs more than $30.

  • I suspect some of that rise in cost is covering Apple’s cut as they funnel apps through their doors (app store, iTunes) a là middleman model. Not necessarily a bad thing, but added to continued rising costs elsewhere, when we pay more for an app/upgrade, we should realize not all of that increase, maybe none, is going to the developer.

  • Part of this is developers, like me, are realizing that this can become a great way to make a living. I have found more success charging over $1.

  • What peeves me is that Apple has and continues to ignore the concept of trail/evaluation versions of apps. There should be a dedicated area/button on every app’s description page for letting you download its evaluation version (if the developer has made one) and that app should automatically be patched to be the full version if you decide to buy the app, so you don’t end up with duplicates in your applications folder like you do now.

    That’s just one of the things that annoy me about the MAS. It’s overall just the bare minimum of an app distribution platform with no effort put into it to meet the expectations of so-called power users.

    • The lack of a mechanism for trial versions hugely annoys me too and I hope Apple sort that out.

      But some developers do provide trial versions of their apps outside of the MAS and this is what strongly biases my purchasing. I always try to buy from a developer who has provided a trial version and shun developers who have not. For example, this is why I don’t buy Reeder even though it is clearly the most popular app in its category.

  • Second on that thought in the article. Even if I come up with an app that I know I won’t use it much, I end up buying it’s paid version when there is also a free version because I’ve that bias as well.

    I always say to myself that the free version will not be the full experience & also I can understand the developers hard work during development since I will be one soon.

    Actually an AppStorm writer, your own David Appleyard’s book about iOS, iPhone App Entrepreneur, explains the pricing of an app really well. If an app is going to priced rather than distributing it for free, gets that price by it’s audience as well as the hard work spent on it during it’s development.

    Apps that will be used by a greatly large group can be .99 $ because eventually they will sell in great amounts and earn a lot. But more special apps can be higher in price like 3$ or even more since their users would be not willing but should pay that price because they really need to use that app.

  • Interesting. I feel like I (and most of my friends) lean toward free apps. I used to pay for apps more often, but those 99¢ apps add up. And I found that a lot of the time free apps get the job done… or I just don’t need or use certain apps enough to warrant paying for em.

    Tweetbot, Saver and NowPlayer are the only paid apps I ever really used a ton. The list of paid apps I regret and wish I could get a refund for is insanely long though.