So this should be a piece of cake, right? To me, that would be an economy where iPhone applications of all price levels can be freely and fairly evaluated by customers, ranked and reviewed for the benefit of others, and marketed collaboratively by Apple and developers so that the maximum number of interested customers is exposed to any particular app.ДЄny single solution that makes progress towards this is one of the ideal solutions. Instead of focusing on a single solution, itвЂ™s both more practical and less daunting to focus on an ideal outcome. There is no simple solution to these pricing problems, but I think this is a good thing. Attempting to understand the App Store, and how customers relate to it, is the first step in speculating about what tweaks might be made to improve the situation for everybody. IвЂ™m just trying to call things as they are. IвЂ™m not looking for pity or for artificially inflated prices, and I donвЂ™t believe Paul Kafasis or Craig Hockenberry is, either. LetвЂ™s make some great products, and letвЂ™s make some money.

I recognize the incredible opportunities the iPhone brings both to developers and to customers. I have watched as colleagues who scrutinize the situation have been dismissed by some commenters as вЂњwhiners.вЂќ So let me head that off right now: IвЂ™m not whining. The more 99-cent applications there are in the App Store, and the more Apple promotes and rewards 99-cent pricing, the harder it becomes to develop a product that will stand out and can be marketed at a sustainable price. The problem in a nutshell is that itвЂ™s difficult to develop a complex, premium application that earns enough to pay back its development costs and provide developers a decent living. These low prices change expectations across the board, and leave customers wondering what they could possibly be getting with a Snapper to justify the much higher price. At the time, Wal-Mart had six different push mowers for less than $200, while the cheapest Snapper listed for $350. Walmart sells customers disposable goods at the cheapest possible price. In todayвЂ™s article, The App Store Effect, he compares the pricing environment of the App Store to Wal-Mart, where premium products are difficult to sell because low price is overwhelmingly the most important feature of any product. I also agree with much of what Paul Kafasis, who has been writing regularly for the OвЂ™Reilly Inside iPhone blog, has to say on the subject. Unless you have a white hot title, selling 10-15K units a day for a few weeks isnвЂ™t going to happen. In particular, I agree with Craig Hockenberry, who suggests that the complexity and ultimately the greatness of applications is limited if Apple encourages bargain-basement prices across the board.Д«ut what happens when we start talking about bigger projects: something that takes 6 or even 9 man months? ThatвЂ™s either $150K or $225K in development costs with a break even at 215K or 322K units. IPhone applications are too cheap, and changes are needed to encourage the development of premium applications that sell for a fair price.

I have mostly stayed quiet about iPhone application pricing, but for some reason I now feel compelled to add my voice to the choir: I have opinions about product pricing, and have not hesitated to share them in the past. I have myself experimented with selling a dirt-cheap and dead-simple application, Shush, in the App Store. These prices are trending cheaper and cheaper, such that even products of considerable complexity are often available for just $1 or $2. There has been much debate in the iPhone developer community about the price of applications for sale in AppleвЂ™s App Store.

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