“Leave it to a company as cocky as Microsoft to dictate prices in a sector over which it has no control,” Rick Aristotle Munarriz writes for The Motley Fool.
“The software giant wants mobile software developers to forget the $0.99 price point that Apple’s App Store is championing, as it gears up for the fall launch of its Windows Marketplace for Mobile,” Munarriz writes.
MacDailyNews Take: Is Apple’s App Store really “championing” the 99-cent price point or did prices just gravitate to that base point? Plenty of apps are free (like ours) and plenty of others cost – and are worth – more than 99-cents, too. Apple provides the App Store, the developers set their own prices.
Munarriz continues, “‘You make more money selling applications than selling your application in a dollar store,’ Loke Uei Tan — a member of Microsoft’s Mobile Developer Experience team — told developers this week. ‘Ninety-nine cents? Come on. I think your app is worth more than that.’ He may be right, but that doesn’t matter.”
“Kidding developers about the notion of jacking up prices is preposterous,” Munarriz writes. “Microsoft may not see what it likes when it peers into Apple’s App Store, but it’s really only looking at the grim reality of software pricing’s future.”
Full article here.
MacDailyNews Take: Since Apple makes the bulk of their money on hardware, they can continue to drive down software prices (look at what they did to MSFT on OS pricing) until Microsoft’s look even more outrageous than they do now (if that’s even possible). Microsoft will never be able to make up that loss with mice and obscenely faulty Xbox units (Xbox 360 failure rate is 54.2%). Apple’s turning Microsoft’s gold into lead.
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
This is a hoot. Is it not the developer who sets the price of his app?
Furthermore where and what is the hardware units in consumer hands that this pricier software will be used on?
Seriously M$ is losing it’s sanity.
When Snow Leopard and Windows 7 hit the street I’m expecting Apple to bash MS over the cost to upgrade and the pain to upgrade in new rounds of Mac vs PC ads.
What a ridiculous assertion that Apple is “championing” 99¢ apps. Some developers have made a decision price their apps at that low prices hopes to gain high volume acceptance, but their a plenty of pricier apps. Apple, would actually benefit if the same quantity of apps were purchased at higher prices.
Geez, what a hash I made out that last post. Please excuse spelling and grammer; I think you know what I mean.
It’s okay, Spark. I just assumed you were borrowing someone’s Blackberry with a physical keyboard and typing with a catcher’s mitt on.
tz writes, “Is it not the developer who sets the price of his app?” Exactly so. The only thing Apple sets is its “cut”.
What Apple has created is a free market. Bejeweled at $2.99 is not worth it to me (though I’d grab it at $.99), but ooTunes *is* worth $3.99 to me to give me access to some overseas radio streams. That Pandora and Bloomberg are free is just a gift.
I paid $100 for TomTom. I could have bought 100 99 cent apps instead but I bought what I wanted. Show me the value – and I’ll show you the money. I loaded it on 4 iPhones so now I’m down to $25 per.
I also agree that the current pricing for the typical app is way below their true value. I have no problem paying more for quality software and support the dev who created said software. Hopefully things will change and they get what they’re entitled too. Because without them the iPhone is a dead platform.
Sell a million 99¢ apps or 60 $5 apps.
Decisions, decisions.
Even if those X-Boxes were 100% defect-free and perfect (as hardware) in every way, they’d still be losing MS money. There isn’t a single MS hardware product (other than perhaps mice and keyboards) that is NOT a loss leader for some other software product. MS is a software company, and their X-Box hardware is sold so that they can make money on licensing for games (for third-party developers) and on their own games division. If Apple’s App Store continues to encourage game developers to lower the pricing and expand the market, Apple won’t care about that, developers will for sure see benefits from greater volume, and MS will suffer, watching their margins evaporate.
Is it easier to get 99¢ from 1 million customers or $99 from 1% of 1 million customers?
= same revenue
At 99¢ you can establish your software base and grow!
Big Als MBP was writing as I was calculating!
If MS wrote Office for the iPhone/iTablet how much would the apps sell for – 99c each (Word, Excel, PPoint, Access, Outlook) totalling $4.95? No wonder MS is worried!
This *wisdom* from M$ follows right on the heels of their statement that the term “netbook” is defined by their license agreement with OEM’s… See Microsoft and the great netbook price-fixing scam of 2009 from Infoworld.
Microsoft has obviously never taken an economics course; they’ve never heard of the price-demand curve.
Even Hollywood finally learned about it years ago, when they reduced the price of videos from $100+ to $20-, and saw demand explode.
The 60 cents that a developer gets for each sale of a 99 cent product on the App Store may not be that bad compared to what you might get out of the old boxed software approach after considering the additional costs and the pirating.
I disagree with the MDN take. Apple is directly “driving down software prices.” Developers are able to charge more for the software that is worth more as judged by the consumer. The nice thing about the App Store is that the barrier to entry is low. That promotes competition and naturally results in lower prices. But the developer can still make decent money relative to the amount of work that is put into a product, if it is worthy.
Correction:
I disagree with the MDN take. Apple is *not* directly “driving down software prices.”
OK, let me try to understand the advice(?) here : according to M$, it’s great if I can find a cheap-o laptop for $699 and save some $ instead of buying a Mac laptop, but I should be paying MORE than 99¢ when buying any mobile app (i.e., stay away from those cheap Apple iPhone apps)??
Me thinks the BORG is speaking out of both sides of their collective mouth.
Microsoft cocky?
Now you MAC astroturfers have stepped over the line. What’s next? Declare Microsoft an arrogant bully? I’ve had it. I’m going home.
Your potential. Our passion.™
P.S. The Microsoft guy is right. 99¢ for burp and fart apps is way too low. That stuff is gold; besides, Windows Marketplace for Mobile will charge $29.99 for their hemorrhoid app. And it’s subsidized with ads from Preparation H. It’s called innovation, MAC dorks.
I think it is better to sell 100,000 or 1,000,000 at 99-cents, and get 70% of that revenue, than to sell 10 at $9.99 at the Microsoft Store. How can a developer sell anything and make money to a user base that does not even exist yet (for the new “Zune HD” Windows Mobile) or is fragmented into dozens of small segments (based on existing hardware limitations)?
Spark. I love hash!
@IPhoner
Having also purchased the TomTom app how do I load it on to my wife’s iPhone as well? Do spill the beans.
ZT … welcome BACK!
Most excellent!
It’s brilliant. The apps gravitated to 99¢ by market forces — developers make more money with a high volume / low price approach. But only on a platform with 50 million units in the wild. The crazy part is that it will end up reinforcing iPhone dominance:
Who wants to buy a different platform if apps cost more than iPhone apps?
Who wants to develop for a different platform if they can only charge 99¢ and there aren’t enough users to generate the volumes needed at that price-point.
I might buy the complete MS Office suite for my mac if it were 99c. Then it’d have value.
Ah shit, that exchange between ‘Spark’ and ‘Metryq’ hit my squirrelly spot and I can’t stop giggling. I hate that.
‘MacDorks’. YES! Been way too long and I love it when ZT uses that!
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Uhm, I think the writer is being metaphorical, and not literal. When Apple “champions” something, the writer means that they are creating a platform where 99 cent apps can not only survive but also thrive.
“What a ridiculous assertion that Apple is “championing” 99¢ apps. Some developers have made a decision price their apps at that low prices..”
And what’s funny is if it were not for this bit of fiction, there would be no story.
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Again, 99¢ apps aren’t necessarily a bad thing. For example, I certainly wouldn’t pay more than 99¢ for a tip calculator or a digital whoopie cushion. And since those are quick and easy to write, the store is full of them.
Part of the problem with the store is that there really is no way to show customers that your App is worth more than 99¢ via the store. This means that developers of Apps worth more than 99¢ have to come up with creative ways of marketing their Apps. For most people, that means trying to get on Apple’s “Hot 100” list. Unfortunately, what’s the best way to get on the “Hot 100” list? Lower your price to 99¢.
I think a lot of people are like me, if it’s cheap, I buy more things. That helps everyone selling apps, all benefit from people being able to purchase lots of different ones rather than deciding which ONE to buy.
And at 99 cents it’s less risky to buy an app you aren’t sure you’re going to like. You give it a try for a couple weeks—it’s only 99 cents. The seller gets their money and if you end up never using it, it’s no big deal.
Well Zune Thang, I know we have our differences but you are irght, calling Microsoft cocky is really an oxymoron. You might give a pinky wave to a micro softie, but it certainly is not worthy of any phallic attributes.
At least there is a bright side, you are going home. Please be careful letting the door hit your ass on the way out, your Zune can only take so much abuse.
P.S. I am sure that hammerhoid app will be really useful to all the Zune users out there.
[I might buy the complete MS Office suite for my mac if it were 99¢.]
Yeah. If it included a 2 dollar instant rebate.
Oh, and what sparkplug said about cheap laptops and high-priced MS software, proves that ballmer is fscking nuts.
So, how will Lauren and mom feel about Microsoft telling developers to hike their prices? They are schizophrenic and they must be clinically put away – what are MS shareholders doing? When do they get out of their stupor 🙁
Remember an article from few years back as the ‘Net/Web was getting started
Was about like this one – what’s a good price to charge, etc
Forget the writer, but it went something like …
“I’d be happy with 5¢ per sale – from 1/2 the People in China”
BC
hey Zunie —
Remember this :
The only thing Micro$oft could ever make that wouldn’t suck …
would be vacuum cleaners !!
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If Microsoft is trying to convince iPhone developers to hike their prices above 99 cents, it can only mean one thing: Microsoft is planning to make all the apps in the Windows Marketplace for Mobile cost 99 cents or less.
“Come on. I think your app is worth more than that. (Now make it more expensive already so we can get to undercutting the App Store)”
MS has two problems with mobile crap. (Of course they have more problems)
1: You can create a nice looking app for iPhone in one day, that same app would be ugly on Windows and it would take more than two weeks of development. So nobody can offer Windows Mobile apps for $0.99 (Don’t forget, those people also have to debug their registry and BSODs)
2: How are people going to pay for those apps? In Zune points?