Tag Archives: iTunes

Does Anti-Trust Pressure Force Apple, Palm To Play Nice?

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It’s going to be a very busy couple of weeks in mobile land. This week, Palm finally ships the Pre. We’ll finally see if it lives up to the hype. And then next week, Apple will have their World Wide Developer Conference, with many and varied rumors of new devices.

The most interesting news, though, going into this Mobile June Extravaganza is the announcement that the Palm Pre syncs with iTunes (it excludes DRM protected media and applications). The big question and speculation of course is: 1) Is Apple giving Palm permission? and 2) If  not, when will Apple shut down Palm’s media sync?

This “relationship” is only heightened by the two companies. Palm’s been poaching Apple developers, precipitated by former Apple and now Palm executive Jonathan Rubenstein, the brains behind the iPod and revitalized Mac. Apple’s Tim Cook, current COO, has publicly said, “We’re going to go after anybody” who rips off Apple’s technology. “We’ll use whatever weapons we have at our disposal.” (quote from Fortune Magazine, June 8, 2009, p88)

To say the least, the relationship is full of animosity.

Sure sounds like Palm is “hacking” Apple’s iTunes. After all, why would Apple help the company they are trying to simultaneously ignore/kill? If so, I would expect a “kill switch” built into an update of iTunes in the near future.

Given all this, though, I’d be surprised if Palm is doing this without permission. Palm’s making a big deal out of the iTunes media sync, as they should. And would you make a big deal out of a major feature that could be ended at any time? No way.

My guess is there’s a ghost in the room. With the Democrats in power, don’t be surprised if there’s more discussion of anti-trust issues. Apple, with close to 90% market share with iTunes and the iPod, has got to be thinking about protecting its back side. No better way to do that than let a competitor or two sync with your system.

And with Apple’s public comments about Palm, I wouldn’t be surprised if it is Apple’s hubris allowing this relationship to happen. After all, why should Apple worry about Palm syncing if, according to Apple, Palm will not be around to take advantage?

Lessons Learned: One Month in the iPhone AppStore

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My article here is the story leading up to and including FastFigures finance calculator’s first month in the iTunes AppStore. If you’re not interested in the story, feel free to jump to my conclusions at the bottom.

Pre-Amble

We started developing FastFigures Financial Calculator for iPhone and iPod Touch in November of 2008 with a team of two people. I developed the UI; Rick developed the engine and back-end. We spent some time through the summer reading and learning Objective-C (which would have gone a lot faster if the NDA wasn’t in place), but real development started in November after a contract job we were working on ended.

My intention was to develop an offline companion to our online version of FastFigures. I started with a list of about 100 of my current customers that requested the product for iPhone. By the time we shipped, that list grew to 250. I emailed with this community about every two weeks, soliciting feedback, getting input, learning how they have used our products so I could make FastFigures better than they expected and, hopefully, have a bunch of customers ready to go at launch.

Pre-Launch

In retrospect the smartest thing I did before launch was start a dialog with my customers. As mentioned we had about 250 people requesting our products for iPhone. This community gave me endless feedback regarding their most important calculator templates, the structure of the application and features that they needed to have. My goal was to never accept just a feature request but instead to always ask why they wanted that feature as well. In the process, I learned more in three months of development than I did in the first 12 years of running Infinity Softworks about my customers and how they use the product.

The second smartest thing I did was hire a designer. Kelly Beile (web site here) did a tremendous job of adding a professional look to both the application and our web site. This, I believe, is more important on iPhone that it has ever been on any other mobile device before.

One of the major pre-release issues was pricing. We have demanded and received upwards of $50 to $150 for our applications in the past and price sensitivity tests had shown dropping the price didn’t increase sales significantly. I knew we were going to have to re-think pricing for iPhone as  $10 is considered expensive in the AppStore. Again, we conducted a survey of these pre-release customers using a method perfected by Mark Paul at Synergy Consulting. (While nothing replaces hiring him, his books are here and here.)

The price sensitivity data showed a starting price of $9.99 maximized revenue but I was concerned that these customers were too familiar with our products and wouldn’t represent the broader world of iPhone users. After agonizing over this for over a week, I decided to adjust the pricing based on some additional factors and settled on $5.99. This decision is proving to be both a good one and a bad one, and I struggle with selling our applications so inexpensively to this day.

One mistake I did make in these early days was not spending enough time making sure the paperwork was in order. This cost us two days in the end — two critical days when we would be high on the What’s New list of applications.

Launch

As mentioned before, I planned on launching two versions of FastFigures, a web-based version called FastFigures Online and a version that runs without an Internet connection for iPhone and iPod Touch called FastFigures Mobile. Each product would work for a wide variety of potential customers: real estate, finance, investing, science and engineering, math, medical and more. I wrote the copy with our part-time marketer, Janet Lee Johnson based here in Portland, and got everything set up in the AppStore. We submitted to Apple on February 13, hoping for a February 18 release date but was rejected on February 17 with a very minor issue. It went back into review that same day and Apple signed off on February 22.

And this is where not understanding the process hurt us. First, I didn’t realize that there was some additional paperwork that needed to be completed. That was completed on the 23rd. Then, once everything is signed off, it takes 24 hours to show up in the AppStore. Finally on the 24th, I’m looking for the application in What’s New and can’t find it! Panic struck until I went to the second page of applications and saw it listed as released on February 18.

Apple launches your app on the earlier of their sign-off date (Feb 22 in this case) or our requested launch date (Feb 18). I didn’t think to change the desired launch date, figuring the date would be the date it actually appeared in the Store. Once I figured this out, I was able to adjust the date back to Feb 22 but by then it cost us two days of coverage on the front page of Apple’s iTunes AppStore.

The good news was we had these 250 people ready to go (not all of which purchased). This got us off to a great start and gave us product reviews and sales we wouldn’t have had otherwise. We started out at number 22 Top Paid Finance apps and stayed in the Top 25 for our first week. But once sales slowed down, it became apparent quickly that we would not be found in the AppStore. Adjustments needed to be made.

Month One

We were quickly learning that the noise level for iPhone applications was very loud. Janet was doing outreach to iPhone bloggers and others. We weren’t getting much of anywhere. In the meantime, it was clear that if I didn’t fix our search issues in the AppStore, we would just disappear. The free fall started the first week of March, just as we left the What’s New listing. On March 3, we were at 30 in Top Paid Finance apps. Four days later we were at #40; two days after that #45. We bottomed out at #50 on the 14th of March.

I was also watching a few search terms. For us, specifically, that was “calculator”, “finance calculator”, and “financial calculator”. We didn’t show up for any of these terms on March 2, when I made the first description change. Realizing that we needed to be less generic in description and capability, I renamed the application to FastFigures Financial Calculator. We showed up on all three the next day: #59, 19 and 6, respectively. A week later we had slipped to oblivion levels, however, at #74, 26 and 8. At this point, I changed the description again, to FastFigures Finance Calculator (finance calculator is searched for in Google far more often than financial calculator), which caused us to disappear from “calculator” and “financial calculator” searches. I made the last (and final) changes two days later, peppering the first description paragraph with the term “financial calculator”. That finally did it, getting us back on the list for all three and starting to see a climb up the ranks.

The beauty of low sales numbers is that I felt more comfortable experimenting. If we were doing great sales, I would have been hesitant to play with the search positions. We bottomed out on March 14, 1/3 of our original projections, and stayed close to this bottom per day until the 19th.

Meanwhile, those who purchased LOVED FastFigures. We had great reviews. On March 19, we passed 20 reviews in the U.S. Store, receiving 18-5 stars, 2-4 stars and a 2-star from reviewers.

Two things happened around March 19th that changed our fortunes. For one, we hit that magical 20 review level I’ve talked about before (link). Second, one of the products in the Finance category most similar to ours went free. There has been a lot of discussion on the web about free applications versus paid applications and that the two customers aren’t the same. And this competitive application proved that. It didn’t take the developer long to realize he made a mistake, changed back to paid but disappeared from the Top Paid list, surfacing down in the 70s. (He’s since recovered and is back in the Top 20 but with a price at $.99 instead of $5.99.)

Meanwhile, our sales started to grow. Was it a better search position? The reviews? This other app disappearing? Increased sales increasing our Top Paid Finance App position that made us more findable and thus increased our sales? I have no idea which factor but the combination was working for us.

From March 19 to March  27 we quadrupled our daily sales and went from Top Paid Finance position #40 to our highest position at #18. Since then we have stayed between 20 and 23 Top Paid Finance Apps and our search positions kept getting better. FastFigures Finance Calculator is now at #25 for “calculator”, #6 for “finance calculator” and #4 for “financial calculator”. Best yet, we seem to have leveled out at a new baseline for sales and can work to increase them from here with outreach to our potential vertical market customers in finance, investment, business and real estate.

itunes_position1

Road Ahead

Obviously, we want to continue increasing sales as we are still 1/3 of breakeven. I now have enough data to predict the unit sales for a particular position in the Top Paid Finance apps. I can even tell what my competitors are selling every day. I do know that my daily targets for FastFigures Finance Calculator are attainable.

I do feel hemmed in on price, though. When I decided to release at $5.99, Mark Paul advised me to release at $9.99 as the data indicated. He argued that it would be hard to raise the price. He’s right but not for the reason he said. Now that I’m happy with our sales baseline, I don’t want to raise the price because I’m concerned about how it will negatively impact sales. (Reports I’ve read say any price increase will drop sales at least 25%). This issue — and the low AppStore prices in general — have forced me to re-think how we deliver the product. I decided to keep the existing, low $5.99 price and offer additional capabilities and power user features a la carte.

A second change is that it has become clear that we needed to separate scientific from finance from medical versions of the product. (My customers advised me of this, by the way, and I initially ignored them.) It is just too hard to be found in the AppStore with a broad product. So we’ll go niche and give our customers an alternative way to get the all-inclusive calculator.

Conclusions

A few conclusions based on my first month in the AppStore:

  • Reviews: If you don’t have 20 people ready to buy and review when you launch in a single AppStore country, don’t bother. The reviews are critical to any application’s success.
  • Professionalism: Having a professional design and web site help make the sale. Also, producing a series of videos help make the case since there are no trial versions.
  • Quality: Hire a designer and go for a high-quality look. It’s expected.
  • Process: Get the paperwork done early. Make sure you understand the entire process.
  • Monetizing: Think more broadly about your application than just a single product. Can you develop similar products that the same customers will need and connect them somehow? Can you sell add-ons? Can you derive income from a web/mobile combination?
  • Saturation: The AppStore is saturated. Getting press for your application is very hard. There are very few instant-riches stories. They are clearly the exception to the rule.
  • Pricing: Certain prices are too cheap for certain customers. And free is always too cheap for customers that would normally pay. Do your pricing research and embrace the data.
  • Niches: Focus on doing well with a single product in an individual AppStore category. If you are making an application that appeals to students and to travelers, think about making it two apps: one that would do well in the Travel category and one that would do well in the Education category.

Some conclusions regarding Top Paid and Search:

  • Country-Specific: Top Paid and Search results are different for each country’s AppStore.
  • Getting Sales: When it comes to numbers, there are only three that will impact your customer’s purchase decision: Top Paid position for your respective category, ranking for Search terms, and the number of reviews. Figure out how to rank high in all three.
  • Top Paid Ranking: Top Paid position for a specific category is critical. In the iTunes Store it’s Top 20 (and it’s not obvious how to see more). In the AppStore on the iPhone, it’s Top 25 and easy to see another 25. If you are beyond 50, you won’t be found at all.
  • Top Paid Position: I believe — but can’t confirm — that Top Paid is based on more than just raw numbers of sales in a given country’s AppStore. Clearly there are other factors at work and maybe based on some rolling average.
  • Search Position: Search positioning is based on some combination of number of reviews, review star ratings, sales and search terms.
  • Search Terms: Search is word-based. The AppStore search does not know that “finance” and “financial” are the same.

Can you make money in the AppStore? Yes. But the competition is fearce and it’s very hard to differentiate your product from others. My suggestion: Spend plenty of time up-front figuring out how to get above the noise with factors you can control.