iPhone app pricing model question? - iphone

I have heard there has been some studies of the apple app store for the iphone. It was a comparison between having a free application supported by ad vs a .99 cent application. .99 cents seems to be the sweet spot for a lot of the smaller applications. Anyone know where those studies were done? Are people having better success with .99 cents or the free ad supported applications?

Have a look at this link:
The Pinch Media numbers show that free
apps, as a category, tend to be used
6.6 times more often than paid apps (this figure incorporates both the
increased download popularity of free
apps and also the slightly decreased
frequency-of-use of free apps versus
paid apps). On average, free
applications are used heavily at first
but usage levels off quickly — the
average app lifetime is 12 runs.
So compared to a single paid app,
making an app free results in 6.6x
more app uses and at an average
lifetime of 12 runs/app = 80 sessions.
Remember that the paid app makes 70c.
So the question becomes “Can the
average free application make up 70c
in advertising revenue across 80 usage
sessions?”
Greg’s answer: “Hell No.” Assuming one
ad is shown per each session, this
requires a CPM of $8.75.
Unfortunately, typical CPMs are 50c –
$2.00, far below the point required to
match the paid app’s revenue. Unless
your app can serve 18 ads per session
(assuming a worst case 50c CPM), or
there’s some especially ’sticky’
property that makes users reliably use
your app repeatedly, Greg concludes
that charging for your app is
generally a good idea.
See link above for slides and additional info.

I personally hate when apps have ads in them.
I'd be more willing to pay a dollar than to deal with an ad every time I use it.

As is often the case, Jeff Atwood has the answer: Software Pricing: Are We Doing It Wrong?

Related

In app purchases and trial runs?

I am building an app for a client that will have 30 days of content for free, thereafter you are required to buy a subscription via in app store purchases.
However, I have read that you will get rejected if you have trials.
Don’t set time limits on any of the functionality of your app, either
for run times or life times. Applications that only run for a set
number of minutes per session, or that expire altogether after some
period of time, don’t recruit customers so much as leave a bad taste
in their mouths.
Finally, they also say "your app will be returned to you by the App Review Team for modification if it is found to have time limits".
This seems odd because I know the Guardian and all major newspaper apps have limited functionality.
The Guardian app is free but you get limited functionality?
The Daily app is free, but you have to pay for daily subscriptions
and has limited functionality for the period of your subscription.
The Times app is free, but is a free trial (of sorts) (plenty of
complaints about it)
There are other examples which seem to differ from Apple's policies.
Lets say you have an app that is free, but then you have to pay for subscriptions to gain access; however according to the rules this is considered limited functionality -- yet there are lots of newspaper apps that do exactly that.
I'm confused.
Can someone clarify the situation? Can apps have trials?
Thanks
It is difficult to clarify the situation because unfortunately the guidelines are not necessarily set in stone. They can and do vary on an app and publisher basis.
In the case of The Times and The Daily, both apps are produced by News Corp. It is perhaps safe to say that News Corp has a good deal more influence with Apple than a one-man development shop producing an iPhone game. Apple would be loath to admit it, but there are clear cases of popular apps on the store that don't conform to the guidelines, where they have tacitly made an exception.
So what I would say to you is this: be sensible. Don't have an app that quits automatically when your trial runs out. Think about what would be acceptable to users. It's very much a case of nothing ventured, nothing gained. Take a risk, submit your app with your limited trial, and see what happens.
With the Guardian app, we had to deliver an app where you always got at least some fresh content if you were using the free version. Subscribing opens up more content to the user.
I think, you are mixing up "content" and "functionality".
You can deliver content items (i.e. an magazine issue) for free or user has to pay for it — so the first n issues, or all issues in a certain timeframe, can be free, while the others need to be paid. But if an user purchased an content item before, you have to re-deliver it for free.
You can sell functionalities (i.e a search in the magazine's archive) as-well. But you cannot give it to the user for free for a certain time and them make him pay.
So the general rule is: What ever the user got from you — you cannot take it back from them and make them purchase it again.
There are plenty of free apps which provide limited functionality. They don't provide time limits though (or at least they shouldn't). I'm guessing it won't be as clear cut as accept or reject for Apple, because I did encounter an app which closes itself after 10 minutes, opening a web page to purchase it (closing an app is also against the Apple Human Interface Guidelines, as an app should never terminate itself).
The guidelines mention this is only allowed for specific types of content:
11.9 Apps containing content or services that expire after a limited time will be rejected, except for specific approved content (e.g. films, television programs, music, books)
11.15 Apps may only use auto-renewing subscriptions for periodicals (newspapers, magazines), business Apps (enterprise, productivity, professional creative, cloud storage), and media Apps (video, audio, voice), or the App will be rejected

iPhone app distribution in a club

I am a member of a gliding club with 150 members, and we want to have our own iPhone app. Requiring a member login, the app would be usable only by members of the club, and it would be used by an estimated 20-30 people.
Is it even possible to disribute such an app to non-jailbroken iPhones? According to my research:
It wouldn't be accepted on the App Store due to "limited audience".
Even if we were able and willing to pay $300 for the enterprise distribution model, Apple would likely not accept us as a company.
Ad hoc distribution would be fine for us except for the expiration time associated with apps distributed in the manner.
Are we at a dead end?
Thanks.
Edit: In case anyone is wondering why I didn't just ask Apple directly: I did, and their answer was, "We are unable to advise you with respect to the Apple Developer Program that best fits your needs."
I'm not 100% on your question.
But depending on your requirement, pretty much everything you need can be achieved as a web app, with the correct coding behind it i.e. CACHE MANIFEST you could make the app function similar to the a native app, available offline and can be saved to any iOS device through the browser.
Give me a shout if you need more information.
Hope it helps
Gary
You could always try to make the app a little more "global"? Perhaps offer some free stuff for Joe Bloggs to use, but tucked away you have your real motive... that way you can get it released legitimately.
I've seen some real disasters in the app store that shouldn't have made it, and I'm sure Apples screening isn't as intense as we might think. (example: that flash light application, when pressing a sequence of buttons it would enable free tethering).
Best of luck!
Yup. You seem to have all the options laid out pretty clearly, and there's no other way to do it. Except developing for android, and just distributing the application freely and without arbitrary restrictions.
Sorry.
Ad-hoc distribution would give you about 90 days expiration time, i think, whereas enterprise would give you a year. Though gaining enterprise status in the eyes of apple is easier said than done.
Even if we were able and willing to pay $300 for the enterprise distribution model, Apple would likely not accept us as a company.
You don't have to be a company to apply for the enterprise account, you just need to be an organisation with a DUNS number.

Do I have to support jailbroken iPhones?

We're days away from submitting our first app to the appstore and
last night I was horrified to hear that it does not work on
jailbroken devices. I got a few seconds with the device and saw the OS version, and free memory available (36MB, I guess that's low).
Should I care?
Presumably jailbreak users can buy the app and write scathing reviews.
If so and jailbroken iPhones are common, then the iPhoneJB becomes a de facto shadow-platform that I'm obliged to support.
EDIT
I got some ball park figures, sounds like I should care about the new de facto shadow platform. So either I can try reducing memory requirements and cross my fingers, or get out the credit card and go get me another iPhone to jailbreak.
With around 2.3 million jailbroken iPhones, it is a significant portion of the market. I have a jailbroken iPhone, but most of my apps are from the App Store. I vote yes.
This is a similar issue to what many web developers run into: should they support Internet Explorer 6? While as of this writing 14.9% of the market still uses IE6, many web developers choose not to support it because it is difficult and takes too much time. My own experience was that supporting IE6 caused 50% of my work; that's obviously not a good trade-off.
As Jergason mentioned, there are 2.3 million jailbroken iPhones. Obviously that's a large market. But compare that with the 30 million iPhones total sold as of March 2009. You could probably find better numbers to compare, but assuming those numbers are roughly accurate, less than 10% of the market is jailbroken. Look at how much work, money, etc. it's going to take to support jailbroken phones. I don't know how much work it would take, but when it comes to money, my guess is that simply the cost of getting a jailbroken iPhone to test on will be more than 10% of your revenue (iPhone dev tends to be a small-scale operation, but I don't know the nature of your product so I could be way off-base here).
So my vote is neither yes nor no: do the research and get more detailed stats than I've provided here. When you have your information, don't spend a larger percentage of your revenue supporting a segment of the market than that segment is as a percentage of the whole.
Of course you don't have to support anyone you don't want to! Ultimately, as others have noted, it's a business decision.
In my experience, you'll spend a disproportionate amount of time supporting users with jailbroken handsets. I spent more than twenty hours tracking down one problem that only affected jailbroken phones and even then only found the solution entirely by accident.
Having said that, some of my most enthusiastic (or at least vocal!) users have jailbroken handsets.
At the time of writing, about 25% of users of my free version have a jailbroken handset and 10% for the paid version.
In the end I try to support all users but I do put a higher priority on users with vanilla handsets. I'd draw the line at users of cracked versions, but I have no reason to suspect that's the case.
Incidenally, technically you'd be in breach of your iPhone Developer Program agreement if you used a jailbroken handset. And 36Mb sounds like a lot of available memory for anything other than a 3GS.
The accepted answer to this question seems fine, but I thought I'd add one more (technical) issue to consider.
If you don't at least test your app on jailbroken devices, you may not be aware of some security vulnerabilities. If your app contains any kind of sensitive information, you might want to make sure it can't be easily accessed on a jailbroken device. This might include protecting users' data, or protecting the corporate data on the back end.
Jailbroken phones allow a user to ssh into the phone, and browse any file on the filesystem. The sandbox is nullified (App Store apps will still be limited to their own sandboxes, but non App Store apps will be able to read and write the sandboxes of other apps, including App Store apps).
NSUserDefaults used to store sensitive information, for example, are easily exploited on a jailbroken device.
Even the keychain can be subverted on jailbroken phones.
It would be nice if you didn't have to worry about this, but at least through iOS 6, you really do need to worry about it. So far, Apple has not been able to (or maybe doesn't want to) completely prevent jailbreaking, so it's a real-world vulnerability. Ignoring it is probably not doing your clients or users any favors.
Do your market research. Do you expect to sell to alot of users with jail broken iPhones? Then you need to decide how important that revenue is to you...

Is there a risk that Apple will not accept me as an applied iPhone Developer (with paid membership)?

What does it mean that I have to "apply"? Can day say: "No, we don't like your nose. Do something else!"? Did they do that in the past?
I've been investing now two full months worth about 20.000 USD on learning for iPhone programming, and I didn't apply yet...
I've never heard of them rejecting an application for developer license. But I've heard plenty of stories of them rejecting code. That's the much larger risk with Apple's stranglehold on the iPhone marketplace.
There is no reason for them not to accept you as a iPhone developer. There is no situation that I know of where they have denied the application provisioning for testing out on the iPhone. They can and will deny your app submission to the app store in some cases. Usually those cases include:
Using copyrighted assets which you do not have a license for
Competing with one of their apps (mail client was the only one I know of)
No value added (yet another "flashlight" app - pretty rare)
Opening the iPhone to scripting attack through download.
Does not conform to their UI guides
The last of these is the trickiest. A friend of mine had his app rejected because he used a UI widget in an unexpected way. This is pretty subjective IMO but they did tell him exactly why they denied it and accepted it when he fixed the issue.
Also about the 20,000, I can't agree here. In addition to learning and bettering yourself as a programmer, you are assuming that you would be paid for every off hour you spend learning - not very realistic.
Apple has a right to not accept your app at their wish, so you have to take a risk.
Yes they could. That's the risk behind developing for any tightly locked down environment.
Of course in practice they are unlikely to reject you for no reason.
And you're already taking a gigantic risk by investing $20k into iPhone development. I can't help wondering if this is a saturated market, although there have been a few well publicised success stories, everybody and his dog are now working on a bejeweled clone, and lets face it, even people who buy iphones are going to be looking a reduction in spending on pointless trivia soon with the market the way it is

How much does it cost to develop an iPhone application? [closed]

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How much can a developer charge for an iPhone app like Twitterrific?
I want to know this because I need such an application with the same functionality for a new community website. I can do Ruby but have no experience with Objective-C. So it would be interesting for me if I should start reading books about iPhone programming or outsource the work to a iPhone programmer.
I'm one of the developers for Twitterrific and to be honest, I can't tell you how many hours have gone into the product. I can tell you everyone who upvoted the estimate of 160 hours for development and 40 hours for design is fricken' high. (I'd use another phrase, but this is my first post on Stack Overflow, so I'm being good.)
Twitterrific has had 4 major releases beginning with the iOS 1.0 (Jailbreak.) That's a lot of code, much of which is in the bit bucket (we refactor a lot with each major release.)
One thing that would be interesting to look at is the amount of time that we had to work on the iPad version. Apple set a product release date that gave us 60 days to do the development. (That was later extended by a week.)
We started the iPad development from scratch, but a lot of our underlying code (mostly models) was re-used. The development was done by two experienced iOS developers. One of them has even written a book: http://appdevmanual.com :-)
With such a short schedule, we worked some pretty long hours. Let's be conservative and say it's 10 hours per day for 6 days a week. That 60 hours for 9 weeks gives us 540 hours. With two developers, that's pretty close to 1,100 hours. Our rate for clients is $150 per hour giving $165,000 just for new code. Remember also that we were reusing a bunch existing code: I'm going to lowball the value of that code at $35,000 giving a total development cost of $200,000.
Anyone who's done serious iPhone development can tell you there's a lot of design work involved with any project. We had two designers working on that aspect of the product. They worked their asses off dealing with completely new interaction mechanics. Don't forget they didn't have any hardware to touch, either (LOTS of printouts!) Combined they spent at least 25 hours per week on the project. So 225 hours at $150/hr is about $34,000.
There are also other costs that many developer neglect to take into account: project management, testing, equipment. Again, if we lowball that figure at $16,000 we're at $250,000. This number falls in line with Jonathan Wight's (#schwa) $50-150K estimate with the 22 day Obama app.
Take another hit, dude.
Now if you want to build backend services for your app, that number's going to go up even more. Everyone seems surprised that Instagram chewed through $500K in venture funding to build a new frontend and backend. I'm not.
The Barack Obama app took 22 days to develop from first code to release. Three developers (although not all of them were full time). 10 people total. Figure 500-1000 man hours. Contracting rates are $100-150/hr. Figure $50000-$150000. Compare your app to Obama.app and scale accordingly.
There are ways of paying less to get an application, developed than paying the going rate, but very often you get what you pay for - inexperienced developers who leave you with a mess of spaghetti code that's impossible to maintain, or experienced developers with whom you have to communicate across a cultural and language gap.
Developing an app like Twitterific is not easy. It's an extraordinarily polished app with a lot of attention to detail that most people - indeed many developers - would fail to notice or realize the effort behind. You may be able to get a Twitter iPhone client written for $3500 or $5000 by going offshore or by being willing to "work with inexperienced developers", but you're not going to get Twitterific for that, and it's doubtful you'd get even a halfway decent application for that amount.
And you likely will end up spending a lot of time managing the process, going back and forth on requirements, and fighting to get what you really want instead of what they want to give you.
There's also a risk with "cut-rate" development, whether it's offshore or just using inexperienced developers - you may very well end up with something you can't use, or something that gets 1 star ratings because it crashes or behaves erratically. You might find the occasional underpriced gem of a developer, but they won't stay underpriced for long given the sheer demand in this market right now.
By virtue of my books and blog, people often reach out to me when they need help with their iPhone applications. I get, on average, 4 or 5 inquiries a month from people asking for help fixing applications they had developed either over-seas or by inexperienced developers here in the States. In most cases, I end up having to tell them they'd be better off throwing their code out and starting over with a developer who knows what they're doing rather than trying to fix the code they bought on the cheap. If they insist on trying to "fix" what they have, I decline the work.
I am a very good iPhone app developer, and I charge over $150 per hour for my services. I have a ton of experience building iPhone apps and their server side components. I have also been called in on several occasions to fix offshore developed apps. Here's my take.
Design costs money, good design costs lots of money. Expect several designer weeks of work per app screen. Offshore teams do not do design.
Server development and infrastructure is critical if the app is to succeed. A slow server response, or an overloaded server will hamper your app, and crimp sales and satisfaction. The server side of the equation will cost the most and take the most time to develop. Those who offshore their server development will find that quality and uptime are both terrible, in my experience.
App development if done right takes time too. A professional developer will ensure all HIG rules are followed, the app is properly structured and contains no known errors, it performs well, and it passes the app store validations. Offshore teams just cut code.
I'm just about to release a shopping app for a client. The design work was done by 2 client in-house designers over 2 weeks, quick because they had all the image assets already. Think 2 people x 10 days x 8 hours = ~$24,000. The server side had to be modified to provide data for the iPhone app. We used their in-house team and in-house platform and in-house API, 2 developers, 4 weeks, or about $50,000 and that's because they already have a web shop and API. Cost them about $400,000 to get there (excluding platform). And I wrote the app side in 3 weeks, given that a lot of my code is duplicated from previous projects, another ~$25,000, the cheapest app I ever did.
Total spent: ~$100,000, and that's insanely cheap!
And they will give this away for free so clients will buy from their store from their iPhones.
For your app, Peter, if you have the servers and the APIs and the design, I'd guess at $30,000 to $60,000 depending on complexity. If you do not have the design, double it. If you do not have the APIs, double again...
I am an account exec at a web and mobile development company and hear this question everyday. Unfortunately, iPhone apps are not cheap. You can expect around $100 per hour if you are staying on US soil. I have seen some offshore Indian developers out there for as low as $20 per hour. It all depends on the number and complexity of the functions you wish the app to perform. Simple one function apps are normally around 4-5k. They are so expensive because you are paying a team of people a healthy hourly wage and any type of raw prototyping, development, and coding takes time. Apps can exceed 60-100k pretty easily. Southwest Airlines making an app with a full ecommerce platform that allows you to buy tickets over your phone is an example. All of that porting into their IT is a big job.
And offshoring the project is definitely not always a better option. If you do so you better know who you are dealing with. Do not get me wrong there folks over there who do a bad ass job for a way better deal, but they are not that easy to find. Those guys could fuck around for 5 months on a simple project that would take 6 weeks here, or just not complete it at all and hand it over half finished. I have seen this scenario many times where we finish the work. The project management becomes a challenge. It can be difficult to communicate exactly what you want the app to do.
River of News for the iPad took about 400 hours of development to get to version 1.0 and I don't know how many hours my designer spent (20-50?). At US labor rates that's at least $40,000. But that sort of tight development was only possible because it was a one man operation. There is an enormous amount of overhead added when you separate the person writing the code from the person deciding what the product is going to do.
If you are going to send it offshore you'd better know exactly what you want. With the language and time difference it's very hard to do iterative design where you are exploring what is possible.
Appsamuck iPhone tutorials is aiming for 31 days of tutorials ending in 31 small apps developed for the iPhone all the source code for which is available to download. They also provide a commercial service to build apps!
If you want to know if you can do the coding, well at least you can download the code and see if anything there is helpful for your needs. On the flip side you can also get a quote from them for developing the app for you, so you can try both sides of the coin, outsource and in-house. Of course it all depends on how much time you have too! It's certainly worth a look!
(OK, after my last disastrous attempt to try and post a useful piece of help, I went off hunting around!)
I am the developer for Coupious mobile coupons iPhone app and with the amount of time that I spent on that application (v1.0 - v1.5), it was probably a $15,000 - $20,000 investment. However, to be fair, I do admit that I was the only developer working on it and when I started the project, I had never seen or used Objective-C before. Despite that, three months later, it was released so the numbers are probably a little skewed because there was a fair amount of learning going on as well as coding.
However, iPhone competent developers run in the range of $80-$150 depending on their skill and time with the platform. I would say that for a simple application, an app would probably run 2K-5K, a medium complexity app would run 5K-15K and a fairly complex app running 15K-30K. Game applications could be even more.
The reason it is so high is that the skill is fairly specialized and not everyone is able to do it
I hate to admit how little I've done an iPhone app for, but I can tell you I won't be doing that again. The guy who said that "simple, one function apps can be done .. [by solo developers]... for $5K" is correct; however, that is still lowball, and presumes almost no project design, graphic design or network backend work.
The rates that were quoted above are what you would expect to pay US developers; however, I do know some people who have been able to get their apps built for as little as $4,000 by using offshore developers.
Here is a blog post from a group that did this: http://www.lolerapps.com/why-outsourcing-iphone-apps-was-a-no-brainer-for-us
Also, Carla White wrote a fantastic eBook about the process she used to outsource her app called "Inside Secrets to an iPhone App". She talks about how she got a great deal because she was willing to work with a team that was still learning iPhone app development.
So, there are alternatives to the higher price developers discussed above.