MacDailyNews - Where Mac news comes first

 MacDailyNews Poll

5 Day Most Commented

Opinion Archive

Current Headlines

Latest Joy of Tech

  • Latest Joy of Tech!

MacNN

AppleInsider

Macworld UK

TUAW

MacRumors

Yahoo! Finance AAPL

iTunes Top 10 Albums

Mac OS X Downloads

Fri, Jan 09, 2009 - 08:57 AM EST  —  AAPL: 92.70 (+1.69, +1.86%)  |  NASDAQ: 1617.01 (+17.95, +1.12%)

Why can’t all iPhone apps be free?
Tuesday, July 01, 2008 - 04:02 PM EST

"Why can't all iPhone apps be free? Well, quite simply, because people are still willing to pay for them. Apple currently generates most of its revenue from up-front sales — whether it's for MacBooks, iTunes or iPhones. And the pay approach for mobile games, ring tones and videos has long been used by other tech purveyors... 'It is a historical business model,' notes Kevin Burden of ABI Research. Buyers are willing to pony up, though, because of the cachet of the Apple brand," Anita Hamilton writes for Time Magazine.

"Charging up-front for applications also gives Apple an edge with developers. "Part of getting developers to focus on your platform is making sure they will make money off of it," says Burden. While this arrangement forces consumers to shell out for programs they may use only once, the economics of the iPhone App Store are much more attractive for developers. Normally, wireless carriers control the pricing and selection of the apps available for their handsets, paying developers no more than 40% of the proceeds. Apple, on the other hand, will give app makers 70% of all sales," Hamilton writes.

"Few companies have figured out how to turn a profit by relying solely on mobile ads for revenue. Mobile marketing brought in less than $500 million in the U.S. in 2007; compare that to online advertising, which made $21 billion. For many developers, it's just not worth the risk," Hamilton writes.

Hamilton writes, "If Apple ever did decide to let all iPhone apps be free, it would be a radical departure from its typical way of doing business."

Full article here.

MacDailyNews Take: Before you bang something out for Time Magazine (and before you slap it online or on paper, Time) shouldn't you at least attempt to understand what you're writing about? It's simply not within Apple's purview to decide if other companies apps are for-pay, ad-supported, or just totally freeware. Apple cannot "decide to let all iPhone apps be free." Unless they're going to buy out every developer in the world first. Obviously, that'd be quite impractical. Developers already have the choice to pursue the business model they feel will work best for their app.

  • Social Web
  • E-mail






Always -- Free ground shipping with orders over $50 at the Apple Store.

Reader Feedback: ( = registered)

Jul 01, 08 - 03:07 pm Comment from: CYxodus

Why can't all Time issues be free? That's right, no one would read them anyway.

Jul 01, 08 - 03:14 pm Comment from: Spark

"Why can't all iPhone apps be free? Well, quite simply, because people are still willing to pay for them."

What a surprise that there are some people left willing to accept the concept that a person's time, talent and product should be paid for.

In the mind of the typical Time Mag writer, all things should be free.

Jul 01, 08 - 03:15 pm Comment from: HMCIV

I guess two of my favorite axioms still hold true.

Time = Money
Time is meaningless

Jul 01, 08 - 03:19 pm Comment from: neven

"And also, you should win things by watching!"

Jul 01, 08 - 03:26 pm Comment from: K

Next they will be wanting "free" health care

Jul 01, 08 - 03:27 pm Comment from: Pete

How come it never occurred to Anita Hamilton to ask the same question about PC apps, or operating systems?

In fact, why can't everything be free?

Jul 01, 08 - 03:28 pm Comment from: zomg

Why can't all iPhones be free? Well, quite simply, because people are still willing to pay for them.

Or, could it just be that things cost something to produce? Or, given that other things do cost money, people making their own things want to make some money to buy things they aren't making? Yes, it would be nice if everything was free. But this article was just a waste of time.

Jul 01, 08 - 03:31 pm Comment from: grok

for a magazine that's bleeding like Kate Hepburn doing needlepoint, Time sure has a lot to say about Apple's business model

Jul 01, 08 - 03:34 pm Comment from: Bobby Skinner

Us programmers have to eat!

Jul 01, 08 - 03:48 pm Comment from: qka

... because as a software developer, I like to get paid for my work. It appears that the iTunes Store model probably does not support shareware - Apple letting the user download for free, and then sending money to the developer. Apple has costs, and wants to be compensated.

Jul 01, 08 - 03:48 pm Comment from: R2

The first two paragraphs imply that the majority of iPhone apps will cost $9.99 while only a few will be free. With the App Store unopened how does one know the ratio of free to paid apps?

And what if $9.99 tends to be the upper end for paid apps while most go for $1.99?

Developers can choose the price they want to sell their product based on market demand. If your paid app doesn't sell very well then you lower the price. If you want it to be free then it's free. Seems like a pretty good arrangement to me. Some people, myself included, would rather pay money for an ad-free mobile experience and that's why I want nothing to do with Android if they take that route.

Jul 01, 08 - 03:58 pm Comment from: Macintosh

Anita, you are an idiot.

In case you read this:

id•i•ot
noun informal
a stupid person.

Jul 01, 08 - 03:59 pm Comment from: jjjj

what did i read? There may be some 4,000 - FOUR THOUSAND APPS when the AppStore launches? If that's even close to the truth, it's outstanding.

Jul 01, 08 - 04:01 pm Comment from: Doom and Gloom

You poor babies.... Everything should be free and open source....

Jul 01, 08 - 04:01 pm Comment from: ../.

"Why can't all iPhone apps be free?"

Seriously! Does it need to be asked?

Jul 01, 08 - 04:01 pm Comment from: Gandalf

Why can't all media be free of adverts? Now that would be news.

Jul 01, 08 - 04:07 pm Comment from: TheConfuzed1

Now that's just stupid.

While we're on the subject, why can't all music and video be free? Or cars? Or homes? Or food?

Hell, I'm tired of paying for everything! Why can't it all be free?

Welcome to the world of economics.

Jul 01, 08 - 04:07 pm Comment from: better yet

why can't I be paid to use apps?

I mean come on get with it.

Jul 01, 08 - 04:07 pm Comment from: Cubert

grok,
I almost shit myself when I read your post. Thanks for the 5:00 pm-leaving work laugh.

Jul 01, 08 - 04:08 pm Comment from: Cubert

Now, back to the article.

This guy is a fool! Has he written a similar article about Crackberry's? Likely not. Also, the VAST majority of apps for the iPhone will be free.

Jul 01, 08 - 04:09 pm Comment from: Gomer37

I read somewhere that Bill Gates will send us a check for all our iPhone apps! Hmmmm... where did I put that e-mail?

Jul 01, 08 - 04:11 pm Comment from: luke255

<b>'It is a historical business model' <b>

It certainly is. Providing a product of value in exchange for currency. Historic. When will companies like Microsoft, Nintendo, Sony and Apple do away with this ridiculous practice and start ensuring all software for their platforms is available free of charge to everyone?

I'm glad someone was smart enough to bring this up...

Jul 01, 08 - 04:17 pm Comment from: MacIrish

@grok,
Thanks for the great post - what a visual!

Jul 01, 08 - 04:19 pm Comment from: Kevin

wow, this is one of the dumbest and worst thought out propositions i've ever read . . .

While we're at it, let's make gas free, food free, and clothing free too . . . why?? just because it's a departure from the historical business model and gas, food, and clothes would just fly off the shelves . . .

Idiot

Jul 01, 08 - 04:21 pm Comment from: Pffft

"Buyers are willing to pony up, though, because of the cachet of the Apple brand"

This is why Apple will continue to baffle the rest of the industry, which consistently puts affect before the cause. Apple's brand has cachet because people know from experience that what they're selling is worth something. You can't create that with advertising, and it would disappear quickly if Apple were to charge good money for lousy products. As long as the rest of the industry thinks that Apple's success comes from marketing tricks, Apple is in no danger of running into stiff competition.

Jul 01, 08 - 04:24 pm Comment from: Billy Madison

"Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul."

Jul 01, 08 - 04:29 pm Comment from: Think

Why can't someone mow my grass for free?

They want to move more and more to a socialist/communist government.

They can't learn from history that it just doesn't work.

Russia- 1918 to 1970s. Everybody works for the government and the government will provide everything.

You want to stand in a line for toilet paper?
Another line for beer? Oh sorry, we just ran out today. Come back next week.
Another line for crappy potatoes?

Ya know, I think I'm gonna take it easy at work this week, cause the government don't pay me enough. His buddies see him get away with it and then they all do it.

Vodka supplies go down. Now the lines for that are twice as long.

Jul 01, 08 - 04:34 pm Comment from: Think

Journalists think if they write it, it can come true.

It just has too!

Really.

Like managers who give an artist the worst picture ever and say, "You can Photoshop that right?"

Jul 01, 08 - 04:54 pm Comment from: DanielM

Ms Hamilton

Obvious it's probably been a while since you bought new software, but I gather that most or your research is conducted on Googling and visiting Facebook.

Imagine going to Macy's and only having to pay for many of their goodies but the rest were free. What a rip off that would be. Since your mag has ads in it, it should be free too. Or better yet those that advertise in your mag should give their products for free too.

Better yet, Time should start hiring more intelligent writers so we didn't have to read such dribble. Now that would be a great bargain

Jul 01, 08 - 04:55 pm Comment from: alansky

Why can't everything be free? Why can't everybody be nice? Why doesn't money grow on trees? Oh my... I think it's time for my meds again...

Jul 01, 08 - 05:48 pm Comment from: Name

The itunes store does allow for free apps (no charge for the creator or the downloader). I'm sure we'll see ports of popular freeware to ipod touch/iphone.

Jul 01, 08 - 06:24 pm Comment from: shen

"The itunes store does allow for free apps (no charge for the creator or the downloader). I'm sure we'll see ports of popular freeware to ipod touch/iphone."

yeah, but greedy Apple still charges 30% don't they!

and 30% of nothing is..... carry the 2..... ummm.....

wait, doesn't the software update have a scientific calculator? right, i will get back to you on that amount in about.... 2 weeks.

Jul 01, 08 - 06:42 pm Comment from: Botvinnik

"for a magazine that's bleeding like Kate Hepburn doing needlepoint"
god thats great Grok

Jul 01, 08 - 08:48 pm Comment from: mike

"I guess two of my favorite axioms still hold true.

Time = Money
Time is meaningless"

Time is only Money if you have a job. Some people (eg. MDN posters) may not.

Why would Time be meaningless? That's a stupid saying.

Unless of course, you just pulled it out of your ass to make a childish comment about the article.

Jul 01, 08 - 10:37 pm Comment from: Mr. Reeee

Shit, I ALWAYS work for free.

Come to think of it, what's this thing called money?
I've heard it mentioned from time to time…

Jul 01, 08 - 11:15 pm Comment from: tc60045

@qka -- couldn't a developer offer in AppStore
- limited version (time or features) for free
- full version for a price

My parents have Time mag in their bathroom, which I always thought was fitting: if you run out of TP, Time mag is a second rate alternative...

Jul 02, 08 - 12:35 am Comment from: Docbop

You like to get paid when you go to work don't you, you have bills to pay, so do developers. Also to do professional apps take time, people for all phases of development, and gear to test on.

It amazes me how so many thing anything that can reside on a computer should be free. Music, movies, software, just because you can't touch or see the bits doesn't mean they don' t have value.

Jul 02, 08 - 12:59 am Comment from: Joe

Eh, ad revenue on the web did not always make this much money, in the past it was a losing mans game.

Think to the future dumb ass things change. Here is my favorite saying of the WEEK:

The only certainty in life is CHANGE

Jul 02, 08 - 01:58 am Comment from: Petey

All apps are not free because businesses have developed them.

These businesses need to make money to survive, if they don't make money they close down and people become employed, lose their homes.

Basic laws of economy.

I would love for everything to be free, but in the real world this will never ever happen.

Must be a slow news day eh MDN? - this is a non subject, you might as well have asked why do we breathe air or why do we have skin - pretty crap article and not exactly news is it?

Jul 02, 08 - 02:03 am Comment from: Petey

I DEMAND that Time Magazine be given away for FREE and that its' 'writers' should not be paid at all.

Jul 02, 08 - 02:16 am Comment from: Dopple

Free dont pay the bills.

Jul 02, 08 - 03:01 am Comment from: yet another steve via iPodDailyNews

I will give my software away for free, the day my mortgage is free, I can feed my kid for free, gas and cars are free, my tools are free, etc. etc.

OMFG what a stupid question.

In fact, when you find a piece of software useful, you're better off if it isn't free (or too cheap.) Why? Because you want the person/organization behind it improving it as their day job, not their hobby.

btw, ad-supported ain't free either... internet ads are getting more and more annoying and look how many (myself included) will gladly PAY for tv shows without ads.

Jul 02, 08 - 05:23 am Comment from: Macpaul

Good grief, what does it take to be a journalist these days? I'll tell you what, I'll happily write programs for free if I can go to the grocery store and get my food for free, and watch tv for free. Heck, let's just do away with money and let everything be free!

Jul 02, 08 - 06:22 am Comment from: clyde

All apps can be free...if you jail break your iPhone or iTouch. I'll have to see what Apple's offering July 11th and decide whether or not I want to restore my iTouch (I like saying it that way just to make all of the purists cringe.) and go back inside Apple's walled garden or continue to play outside of the fence.

Price, availability and ease of use is what I'll be looking at, and I bet a lot of other people as well. I'm just glad to have choices.

Jul 02, 08 - 07:31 am Comment from: Ha, ha, ha

But two apps and the next app of equal or lesser value is free. Happy now?

Jul 02, 08 - 07:56 am Comment from: Mr. Peabody

They're also not free because the iPhone is not a smart phone - it's a hand held computer with cellular capabilities, and as a computer we're undoubtedly going to see a wide range of software products coming out that will include everything from high-end apps to shareware to freeware - depending on the goals and services being offered by the developer. I think the days of goofy so-called "smartphones" is beginning to come to an end. Oooo, I can take pictures and upload them - Oooo, I can actually upload my pictures - Oooo, I can "browse" the internet, even though it's nearly useless and doesn't conform to any standard browser interface.

Nope, now and/or soon I will be using my full blown personal financial manager, now I am using a real web browser, awesome games and lots more coming soon, remote controlling high-end production software tools like ProTools, video editing coming soon, and all of this along with the best implemented set of standard PDA-like tools of any PDA or so-called "smartphone".

Just like the vast majority of computer using/making drones have never gotten the whole Apple thing, the same will go for a long time for the idea that: You're not holding a phone stupid - You're holding a computer!

Jul 02, 08 - 01:45 pm Comment from: KingMel

If I recall correctly, Apple stated that it will host freeware iPhone apps at no charge (despite the fact that it costs Apple to do so). So Apple is doing the right thing by consumers and the prices for apps will vary by the laws of supply and demand.

Shareware approaches may be implemented eventually, but Apple has a history of starting with the simple approach and adding functionality incrementally, and only when it makes sense.

Reader feedback page 1 of 1 pages:

Always -- Free ground shipping with orders over $50 at the Apple Store.

Add Your Feedback:

Register or Login

Name:

Email: (optional)

Emoticons | Allowed HTML Tags

Remember my info   Notify me of follow-up comments?

Please enter the "MDN Magic Word" you see in the image below: