By March 7, 2008

Why The iPhone Application Store Will Create An Avalanche of Applications

One of the announcements to come out of the iPhone SDK press conference was the creation of the “App Store”, a place for developers to display and hawk their wares for both fun and profit.

In fact, the App Store is the only place where they can do so, which is bound to be a point of contention between Apple and the “information wants to be free” crowd.

Even so, I tend to think this is a good thing. Why? Well, one big problem software authors face is exposure. It’s not enough to create a cool application. People have to know about it, find it, and download it. And in many cases simply getting paid for your work is a major hassle as well.

The App Store makes all of that happen.

Users can search for applications, find applications added, see the “top 50″, and more. Directly from their iPhone.

Which then leads to that whole “getting paid” part. Smaller developers in particular have problems in that regard, often having to outsource the e-comerce portion of their business to someone else. Or worse, simply hope for PayPal or Amazon “donations”.

Apple’s method handles that. They split the revenues with the developer, giving them 70% of the take. Apple, in turn, takes care of the promotion, e-commerce, hosting, downloads, handling updates, and credit card fees. If the author wants the application to be free, Apple’s doesn’t take a dime

And then there’s the “sharing” issue.

Any shareware software author will tell you that payment rates are abysmal. Not because people aren’t using their software, they are. They’re just not paying for it. One Apple game developer had more people sign up for their game’s online component using a single serial number found on a “crackz” site than paid for the game in the first place.

But the iPhone model changes that too.

All software is purchased directly from the App Store and downloaded to the phone, or purchased off iTunes and “side-loaded” when the phone is synced. It wasn’t stated as such in the meeting, but I wouldn’t be surprised if each copy was signed and encrypted to the users iTunes account, just like Apple does with purchased music and movies.

If this mechanism works, and is enforceable, it then means that every copy used is a paid copy.

A point that has rather profound implications.

For one thing, it tends to lower prices for the consumer. Look at the proliferation of $5 iPod games for example. Similar games for old-school PDA’s often cost twenty or thirty bucks. Why? Again, because of “sharing”. Each user who paid supported a dozen or more parasites who didn’t.

But when every user pays, it’s easy for the developer to drop prices down to 25% of that, or even 10%, and still make more money than they did previously.

Which in turn makes more sales possible. A user is more likely to blow $5 on some game or utility that sounds useful or cool, than a twenty or more. When everyone pays, one can indeed “make it up in volume”.

30 day “trials” are more problematic under such a system, but as just one possibility game developers could also provide a free version that only has the first three levels, and then giving the user the ability to purchase the full version (Doom anyone?).

Online comments and rating systems can also provide needed feedback.

Even just being on the store can provide a measure of assurance, as Apple will work to ensure that malware and malicious code doesn’t make it’s way into the system, and from there onto your phone. In fact, each developer “signs” his application digitally.

Apple even has a corporate version of the system, allowing companies to create and download software created for internal use. During the press conference, one company demonstrated an application that accesses a drug database, pulling up information and even photos for proper identification.

In fact, this solves so many problems that one wonders if can be used… elsewhere.

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Continued in Apple’s Application Store: Not Just For iPhones?.

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Comments

  1. Alex says:

    Further to your comment about the apps being like itunes music/movies should i assume that it’ll have a similar degree of flexibility, as a current ipod touch owner and definite iPhone (hardware) version 2 buyer would any apps be in a library that would sync with my iphone and would they be able to work on multiple devices (5?) like songs.

  2. Luis Alejandro Masanti says:

    I have the same question about the “5 devices”.
    Or, maybe, “family packs” (charged to a sole account), and/or iPhone/iPod touch combos.