Why are iPhone Apps getting more expensive?
By Dave Parrack
Developers and consumers alike are still figuring out the iPhone App Store. The applications being made available are slowly improving in quality, and buyers are qualifying their purchases more, not just buying the latest app to find its way on to the marketplace. And pricing is also changing, with a lot of newly-released apps increasing in price.
The iPhone App Store has a mixture of free and commercial software available on it. Whether it’s to be given away at no charge, or how it’s priced, is entirely up to the developer behind the product. And this has lead to a diverse range of prices. But there are trends to be seen.
VentureBeat recently published an article talking about how many new apps seem to be heading for the $9.99 range, a massive increase from the current average. Is this change a result of the developers wanting to make a fast buck, or is it more a sign of a maturing marketplace where software is priced at the correct level to sell in large quantities while still allowing for profit?
Most paid apps currently cost just 99-cents - cheap enough to prompt most people to part with their cash and take a gamble that they’re buying a dud. And the quality of the 99-cent app can vary wildly, with some offering a quick thrill while others are worth much more money than is being asked.
Developers are now realizing that while pricing apps at 99-cents means millions of sales, it also keeps the profit margins stupidly low. And some apps can cost a fortune to develop. This is especially true of the new wave of games, which aren’t simple affairs but are full games with well-known and well-respected names such as SimCity, Need For Speed, and Tetris.
The iPhone is gaining a lot of support as a games platform, with some judging it in the same light as the Nintendo DS and Sony PSP. But while games on those handheld consoles can cost up to $50, iPhone apps very rarely venture above $10, which makes them incredible value for money.
There does seem to be evidence of a trend towards a higher price point on the way for iPhone apps, with $9.99 looking to be the new sweet spot that rides the line between popularity and profitability. But when the developers are starting to spend serious amounts of money bringing these apps to market, it’s probably more than justified.
Related:
Entry was posted
on Sunday, November 23rd, 2008 at 6:24 pm
under 
Print This Post
Read more entries by Dave Parrack.
Stumble It!
November 24th, 2008
What a load of crap.
No way in hell will the IPhone ever be a handheld. or compete in that market.
The people getting a DS are mostly young kids even my 3 year old plays a ds. and there is no way I would even buy a teen an Iphone for a game consol.
The Iphone popularity has nothing to do with the games.
November 25th, 2008
it actually has ALOT to do with the games. you obviouslly share a different personal opinion of what YOU would use it for. But every single person i knwo with an iphone/ipod touch is all about the games. in fact many people i know have bought one SINCE i had one after seeing me play the games
you are very out of the loop. look into the jailbreak scene. soooo many people get the iphones to jailbreak them. and when they do its games galore. but this is a different issue. but you my friend are very, very wrong.
November 25th, 2008
This is an interesting post. You know the JD Powers report said that business people found the iPhone to be great phone. The most popular app’s are still the free app’s and I think they will be for a long time. We make an app that is an LBS application which allows you to use SMS to send your location to anyone like like. And it’s free our reviews are high
and we just released our first update.
The growth on the LBS application are going to be huge and we love being on the front of it. No social networking to use this application.
I think plenty of people are not jailbreaking the phone and using it for business.
Come check us out - http://www.zhiing.com
Connie