iPad App Pricing
In the wake of the introduction of the iPad, I’ve been thinking about iPad software pricing. Apple is strongly encouraging developers to make a single binary that runs on both the iPad and the iPhone, so called “universal” applications. What that means is that while the user experience is enhanced because a user won’t need to buy both versions of an application, it means pricing is going be very tricky.
During the iPad keynote, Apple showed off some very nice looking versions of the iWork products. Apple has set the price point of these applications at $9.99. That’s a price point a lot of iPhone apps tried to start at during the opening of the App Store. Most notably Twitterrific Premium from The Iconfactory, Dark Slide Premium from Connected Flow and Trip Cubby from App Cubby, all of which now sell for much less than that. With this “race to the bottom” on the App Store, customers cry foul over incredible applications that are priced “too high” at $3.
Apple has also said that existing iPhone applications will run on the iPad and that they will be able to be “blown up” in size to be full screen. From reports I’ve heard and my own experience in the simulator, this doesn’t look very good. Developers will want to have an iPad specific interface built into their app. The amount of work to get an iPad app’s UI to have the great polish it should have is going to exceed that of the iPhone. This will mean higher development costs. Presumably with higher development costs, higher prices will come with it. The rub is that these universal applications are going to be subjected to the same price pressures from the iPhone side of the market because users will buying a single binary.
Being the optimist that I am, I see this as a potential turning point in iPhone app prices to try and raise them from the floor. I also hope this means a lot less “toy” applications being built for the iPad. At that point, the realist in me steps in and realizes it’s still a gold rush from the developers side, so be prepared for “Fart for iPad extreme edition”. As well, be prepared that the app store buying public are still going to be upset at any price.
One suggestion I’ve heard is to sell the universal app at an iPhone market price point and have in-app purchases to unlock iPad specific functionality. This is a reasonable idea, but I still think a developer would want an iPad specific UI even on first launch on the iPad, so the extra costs problem remains. You also risk backlash from the market of iPad only users.
Maybe the long term answer is to buck Apple’s suggestion and create an iPhone version and an iPad version, both with separate price points. While that will be an increased cost for an owner of both platforms, it will hopefully foster more sustainable development for the iPad. The current iPhone market is certainly not sustainable from the development point of view unless you’re in the small percentage in the top 100 lists or on the front page of the App Store.