We seem to go through this every few months in the world of App Stores: developers get together and start discussing how the lack of iOS App Store options such as upgrades means that developers can’t make a living. This kicked off again last week when David Smith mentioned that the lack of upgrade pricing for the $200 Logic Pro X app from Apple meant that upgrades weren’t going to happen. The guys on the Accidental Tech Podcast picked it up and had a long conversation about it as well [1].

First thing I recommend is a marketing 101 class then we can discuss this again.

The problem with app pricing has almost nothing to do with pricing. (Surprise!) The problem is distribution. And this also happens to be one aspect of the iOS ecosystem that everyone loves.

In the iOS world, there is only one place to buy apps: the App Store. Because there is only one place to buy apps, everyone goes there to find them. Because everyone goes there to find them and the contents are exactly the same for every app (a description, some keywords and a few pictures), it is nearly impossible to differentiate your product.

Saturday I walked in the grocery store looking for mustard. When I got to that shelf I found 10 different varieties from 7 different companies. Which did I buy? The cheapest one. Why? Because none of the brands were differentiated to me.

For 99% of us, there is no differentiation in the App Store. One company’s calculator is just like another company’s calculator. Sure, there are reviews to read and maybe you heard about a product on a blog somewhere, but most haven’t.

This is a vicious cycle. The lack of differentiation means the price drops, which means the money available to market an app drops, which means it is harder to differentiate.

What could help? Trials could help. That would allow someone to download an app and see the difference first hand, not just trust a screenshot. Apple has been clear, though. They prefer freemium. Getting out of the App Store itself can help. Building enough value to charge a subscription could help.

Productivity apps can’t survive and bring the long-term value customers demand at $2.99 or $4.99. At the end of the day, though, the app stores, whether Apple, Google or the like, are not going to solve our problem [2]. The only thing that will is rethinking the products so we can get out of the app stores and differentiate.

—

[1] Listening to Marco Arment talk about this problem is frustrating. The guy has an incredible personal brand, like Loren Brichter, and the things he touch get instant echo in the iOS chamber. Would The Magazine had been such a success if I had built it? No way. His personal echo chamber made that happen. (Note that I am not complaining in the least about his ability to do this. If anything I’m a little jealous.) [My apologies to Loren for misspelling his name in the original footnote.]

Update: I want to clarify that I meant it helps Marco’s app get initial interest, not that it guarantees success over the long-term.

[2] Are there App Store problems? Of course, and things Apple can do to fix them.

David Smith on the problem with in app purchases:

There seems to be a culture developing around designing games and apps that are intended to intentionally mislead and coerce customers into making more and more purchases.

My most basic concern with this revenue model (and how it is currently being applied) is how it can become dishonest and intentionally misleading to customers. I don’t think anyone would contend that making a customer feel cheated or regretful of their purchases would be a good thing. The nature of many of the techniques currently employed is to create environments where customers make impulse decisions in the moment that they would not make with more context.

In it he refers to an article that talks openly about the tricks developers are using to get people to buy more with in app purchases. It is also worth referring to this post on how Nielsen’s usability heuristics are manipulated across the Internet to do the same kinds of things, primarily with mailing lists. (Example: Click the box to not be emailed.)

He’s right, of course. Using people in this way is damaging over time. People come to not trust that company to do right by them. Credit card companies have played this game for years, making us read pages of documents to keep our information private, navigate tricky language, and then do it every year instead of once. And look how much we trust the finance industry these days!

It would be nice if just these companies developed a bad reputation but it doesn’t work that way. The problem is all of us who write code are affected by these games played by app makers. When customers stop trusting one, they stop trusting all of us.

Infinity Softworks received this support email this weekend, and by all accounts this is a fairly mild one:

Not what I expected. I needed actual Financial calculator not just the problem solving feature. I’d like either my money back or the option to have a calculator as option. I will voice my opinion regarding this. Very disappointed. Kind of pissed.

The author doesn’t trust us. We’ve been tarred and feathered by gimmicks and tricks of companies past. The author feels that we have misled and the only recourse will be to get vocal about it.

Never mind that it is probably a simple misunderstanding.