The iPhone Ecosystem

Ok, Im ramping up big time for iPhone Development. Just bought the new iPod Touch, and Im excited to develop for it. Very nice device for only $229. They have improved it a lot in a year. And with the low resistance of the iPhone store, I really like the idea of it. So Im in the process of designing a couple programs and coding them up in Objective-C, which is new to me too.

But a Post over at JustAnotheriPhoneBlog and other posts Ive seen by a lot of bloggers and forum members got me wondering even more so than I already am… And with so many 1 star ratings in the iPhone store expecting lower prices on Applications it just makes me question what is going on. And yes a lot of those are people that don’t know any better as that is all they’ve known for a mobile market and a lot are younger kids, so a little different demographic than we’re used too, but…

http://justanotheriphoneblog.com/wordpress/2008/09/04/dinner-dash-comes-to-iphone-makes-bad-price-choice-imho/

Basically I’ll repeat my thoughts and add a few more. It appears that these people very quickly have decided that just because of the current prices on the iPhone App Store, people expect it. I would expect some of the bloggers to know better(the ones that have been around the other mobile markets for sure), or at least think it through a little more instead of jumping on the ‘I need everything for 99 cents parade’, but…

Some questions and thoughts I have, that I will only be able to answer if the AppStore actually discloses more information or I get in the market or have connections that are in it… and as time passes…

1. This idea that if you lower the price from $10 to $1 you will sell way more than 10x the sales has not worked in the Windows Mobile World(a lot including me have tried it). Maybe with the way the current AppStore is setup right now it does, but I would have to see it to believe it. And will it last…

2. All these big companies are riding the early waves on the App Store. I hope it can continue but will we continue to see this kind of traffic once the App Store is older to justify the pricing for this high volume. And now once the game/app ages, they have no where to go with price to keep seeing any return…

Most of the bigger companies are dipping their toe in the water. We saw them all come and go on WM as well. Hopefully its a working lasting ecosystem and they stay, and hopefully Microsoft does some things to create a better market too… I know Im on record as saying that about 2008-2009 is when mass adoption and the mobile software market and ‘smartphone’ type market in general will explode… We can only hope it is!

3. I still expect to see a leveling back up on prices at some point. Its nice of you to think a ‘Single Song’ file is worth the same as 200-500++ hours of Development(which is billable at anywhere from $40-$150+ an hour in the real world), but Im sure at these low prices we are going to have a LOT of people dropping back out of the market because of no ROI. Right now you have a lot of the excited Hobbyist types(and obviously some with a lot of talent) that have flooded this, but … (They have come in and back out on ALL of the other Mobile markets too).

If all these companies making the big games dont get sales numbers at prices like they get on Desktop and console games, do you think that investment on new games will stay around…

4. Are applications that are the same Exact code as on the Desktop even worth $10 less on iPhone? Why? Because they have to compete with the Music Files? Diner Dash, which is the program that was being talked about in the post, isn’t a FREE desktop program, the real version still costs I believe $19.99…

And just to get a foot hold in this new market is it worth cannabalizing sales on your Bread-and-Butter platforms. Desktops and Consoles still represent much bigger markets. But when people see the game on iPhone for $5 they arent going to be willing to pay the $20 price on the desktop for it… 

Which is made even more confusing because a lot of the these games on the iPhone so far are cut down versions of the real games. So yes, then they are worth less..

5. Another flaw in the idea, is that if you look at the current iPhone Store the good shelf life of the current applications has been like 2-3 months or less… Look, some of the best games have already been dropped to low low prices as others have came in. So you may sell a ton in those 2 months but even if you are a top designed game, even at $10 it may be hard to get your ROI in that short of time…

6. You have to sell a TON of 99 cent Programs with your 70 cent cut a month to make a pay check that you can pay a mortgage with… Im sure the adoption rate is loads higher but expecting to sell 3-4000 copies of a percieved cheap app, with all the uninformed users ‘1 staring’ your application for any reason makes it harder. Compound that with the shelf life problem and the lack of better sorting in the store to find applications and it makes it difficult to get word out to sell that many every month.

7. And people are seeing this 13 Million device sold number. Well a large percentage of those still never enter or use the AppStore. Im sure the percentage is way higher right now than on WM, but the number of existing WM devices out there is way higher too.. So dont kid yourself that anything but the best applications will ever hit anywhere near the 1 million sold number….Man I hope Im wrong, but…

So I expect the ecosystem will change, the AppStore is in its infancy and I will be surprised if it can maintain in it current state. So please Apple do Sub-Categories so you can find say a “Puzzle Game”, and please only allow purchases to review an applicaton(the price complainers arent helping anyone in the long run), but yeah keeping the prices low are bringing adoption rates up in this early start. Right now some of the best games and programs Ive found have been by accident when searching for completely unrelated topics in the search. Getting Lucky is a bad way to have to find what you really want…

And the no trial thing is forcing the prices down too, but is that good…? I think that will burn thousands of people to not even waste the $2-10 bucks after they get burned a few times, because the review system is so inconsistant so you never know what to believe or how good an application you are getting until you have already dropped money on it..

But I will say  I dont see any application with any quality really being worth just 99 cents. You should and Im guessing will be comparing them to the prices of Albums on the Store, not just a single Music File…

Right now the way the iPhone ecosystem kind of works it reminds me of a gumball type machine with the prizes inside. I’ll go in and mill around hoping to find something and plug in my change and crank the wheel. What will I get? 

Guess I need to do my shopping on the Desktop.. But then isn’t the point to not have to.

 

Can’t wait to find out how right or wrong I am…