One of the greatest things about the iPhone App Store is that the barrier to entry is pretty low. This means anyone with some solid coding skills and a good idea can hop in. Apple takes care of the hosting, the credit card authorization and even some of the marketing.
But this is also one of the downfalls of the App Store. It is too easy to create something that is a) not fun or useful or b) a copy of someone else’s work, done on the cheap and sold at a lower price.
The lower-quality apps are usually fettered out in the comments and ratings on the App Store, however. Even if an app sounds interesting, low ratings usually dissuade users from jumping in. This begins a downward spiral that bad games rarely get out of, even after updates.
The bigger problem is the copying of applications. Take for instance,2across, the crossword puzzle app from Eliza Block (iTunes link). When it came out, there was only one other crossword puzzle application. There was plenty of market for both of them. Now it appears that there are 10-30 apps in the marketplace. Some of them look cobbled together from other platforms, or from scratch but very quickly. They are also cheap, some ‘selling’ for free and being supported by ads. Add to this the larger companies who see a success and jump in with similar apps and app functionality with their larger marketing budgets and it isn’t such a boon for independent developers anymore.
Eliza has taken to making a free, partially disabled (only three sources can be used) version of her application. She’s also upgrading her application to work in different languages and reach a wider audience.
This won’t help much with the crossword game market saturated. Her game gets great reviews but so do lots of others. Obviously, she’s not making the kind of money she made when she had a virtual monopoly on the space.
A pricing model is starting to develop seen by the maturity of the market.
- $5.99 – 9.99 – This is where applications usually start.
- $4.99? – If a new competitor enters a market, apps developers often lower their prices to differentiate themselves.
- $1.99 – $3.99 – Once price wars start and other competition enter the market, companies need to stay low to survive
- $.99 – Developers are forced into this lowest price group if they still want to make money.? The majority of paid apps are in this lowest group.? Developers aren’t terribly happy about this.
- Free/ad supported – Some developers just give a partially disabled version of their app away hoping to entice users to upgrade to a more expensive version later.? Other companies try to eek out some money with Google Adsense.? While this is a low upfront money maker, if the game is popular and lends itself well to ads, there is a long stream of micropayments that could last years.
So what to do?? Eliza is already at work on her second game, one that she thinks will be copied less because it won’t have as diverse an audience. Security through obscurity?
Innovation is an obvious answer.? There aren’t many others.?
In this case there is a silver lining/happy ending: She got a “very exciting” job offer from Apple which commences in 2009.