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WWDC survey suggests 70% of planned iPhone apps may be free

post #1 of 40
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If a survey of developers attending Apple's Worldwide Developers Conference this week is of any indication, the average cost of a third-party iPhone application will fall well below $3.00, with the vast majority being made available at no cost at all.

Piper Jaffray analyst Gene Munster, who appears to be the Wall Street analyst making the best use of his invitation to the annual conference, took some time Monday following Steve Jobs's opening keynote to chat with 20 Apple developers mingling amongst the crowd of 5,200.

He found that 50% of them were in attendance because they plan to focus solely on developing applications for iPhone and iPod touch, while the remaining 50% are doing the same in addition to writing software for Macs.

In a surprising revelation, half the iPhone developers said they were authoring what Munster calls "Enterprise apps." Specifically, the analyst said 15% of the apps will tap into the iPhone's location-based services, 10% will be entertainment oriented, 10% will specifically be video games, and another 15% will be other Enterprise-level apps.

"We see this as a positive indicator of the potential for Enterprise adoption of the iPhone," he said. "We found the average cost of iPhone apps on the App Store to be $2.29, with 71% being free."

This startling stat may alone explain why Apple has started to encourage developers to consider charging for some of their apps in the future. The company will receive 30% of the revenue from all applications sold over the App Store to help offset the costs of marketing and operating the download service, but won't receive any reimbursement for operational costs associated with serving up free software.

In speaking to iPhone developers, Munster also discovered that 70% of them have written applications for other mobile platforms, but approximately the same percentage of their iPhone-bound apps will not be made available for rival platforms.

In particular, those developers pointed to the iPhone's standout feature set, which will drive unique applications that cannot easily be ported to software on rival mobile phones.

"Ultimately, we believe this creates added value for the iPhone over and above other mobile platforms," Munster said. He added that all but one of the developers surveyed said that the iPhone developer tools made application development easier than they had expected, with the majority going out of their way to praise Apple for providing the most intuitive and easy to use mobile development platform they've ever experienced.
post #2 of 40
Its a small sample to start making assumptions with, but it's a start. I was surprised at the low price of some of the apps @ $9.99. I thought they would be more in the range of $14.99 - $19.99. So, a pleasant surprise then. Only 15% based on location aware phones. Has anybody else asked the question about the underlying privacy concerns with a location aware phone. Who can find out that information. Is there a historical log of where you have been? Can the boss check to see where you are, can the wife snoop to check where you have been?

I think those numbers will change over time to become 50- 50.

Pete
post #3 of 40
And for iPhone Apps, only 10 people participated in the survey !!
post #4 of 40
I think the reason for this is because a lot of the apps will be tied to other services. For instance, who would pay for an ebay app to participate in auctions?

I think a lot of people see the iPhone app as a way to further their online service or the Mac desktop app.
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post #5 of 40
Considering the quality of the apps featured at WWDC, it doesn't seem like much of a surprise that most of them are free. Most of the apps demoed were really just front ends for websites optimized for the iPhone.
post #6 of 40
The developer feedback on Apple's efforts to make it a top-notch development platform is encouraging! As for the apps that aren't just front-ends for existing web services, the pessimist in me wonders how many of those apps are free because they are going to be advertising supported?
post #7 of 40
Quote:
Originally Posted by caliminius View Post

Considering the quality of the apps featured at WWDC, it doesn't seem like much of a surprise that most of them are free. Most of the apps demoed were really just front ends for websites optimized for the iPhone.

Well, the guys selling the medical flash cards and such are going to be charging real money. If I were a doctor and I saw that CAT Scan app demoed, I think I would buy an iPhone and that app just for its own sake. And that is just one app and it showed a high level innovation and value add for the customer.
post #8 of 40
I was looking forward to no more than 25% free apps. I think it devalues the iPhone and creates 25 flavors of the same type of app. When people charge those that are successful have money to innovate and maintain their product, the free ones stagnate a lot of times.
post #9 of 40
I have a little something that I'm learning Cocoa so I can get started on. Thinking of a fairly low price, but not free. I'd kind of like to be able to switch over to this whole developer thing.

AppStore is what makes the iPhone so intriguing right now. It's a lot harder to get started out on the Mac, even though of course I am actually studying that because they are so closely related. Apple are welcome to 30% for all the advantages of delivery, transactions, anti-piracy and advertising that they are establishing.

In other words: back to Xcode.
post #10 of 40
In other news, a survey of 3 random people off the street reveals 100% of people are female.
post #11 of 40
Quote:
Originally Posted by fuyutsuki View Post

I have a little something that I'm learning Cocoa so I can get started on. Thinking of a fairly low price, but not free. I'd kind of like to be able to switch over to this whole developer thing.

AppStore is what makes the iPhone so intriguing right now. It's a lot harder to get started out on the Mac, even though of course I am actually studying that … because they are so closely related. Apple are welcome to 30% for all the advantages of delivery, transactions, anti-piracy and advertising that they are establishing.

In other words: back to Xcode.

If this turns out well, Apple may consider using this to sell Mac software.

Good for you for charging something for your software. Your time and effort is a valuable resource.

I wonder how many people will continue development of software for the hacked iPhones given that their is an App store with a lot of free software.
post #12 of 40
Quote:
Originally Posted by AppleInsider View Post

"We found the average cost of iPhone apps on the App Store to be $2.29, with 71% being free."

This kind of statement usually bugs me. Who cares what the average selling price of all the apps available is? If there are 10 really popular apps that cost $10 and most people want/need 3-5 of them, it doesn't matter if there are 10,000 other free apps out there--each user would be spending $30 to $50 on apps.
An average app cost means nothing until you can make it an average of apps downloaded. Obviously that data will not exist for a month or so, but the $2.29 means absolutely nothing.
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post #13 of 40
Quote:
Originally Posted by EagerDragon View Post

I was looking forward to no more than 25% free apps. I think it devalues the iPhone and creates 25 flavors of the same type of app. When people charge those that are successful have money to innovate and maintain their product, the free ones stagnate a lot of times.

Perhaps if an app is not up to Apple quality standards or if they have 2,000 weather apps, they will be kicked back to the developer or rejected? It's really up to the consumer to determine which apps will fail or succeed.

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post #14 of 40
So what's the future of Web Apps now?

I have so many Web Apps bookmarked on my iPhone home-screens that I can't imagine being able to actually fit them all on an 8 or 16GB iPhone (along with my music, et al.)

I think I'd want many of those apps to remain Web Apps and not become App Store versions...

Who's going to make Web Apps anymore?... Anyone?....
post #15 of 40
I still have my original Palm Pilot (US Robotics/ Made in the USA). I remember when development began for that platform. It was great to have a lot of free applications available to plug holes in the platform. As the platform matured, developers became more savy at programming and began writing some very cool applications for which they charged for. I believe that this is the way this platform will begin and eventually transform into a great profit generator for Apple. Bottom line is that we want free apps. Its a great way to encourage development.
post #16 of 40
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post #17 of 40
Quote:
Originally Posted by YodaMac View Post

So what's the future of Web Apps now?

I have so many Web Apps bookmarked on my iPhone home-screens that I can't imagine being able to actually fit them all on an 8 or 16GB iPhone (along with my music, et al.)

I think I'd want many of those apps to remain Web Apps and not become App Store versions...

Who's going to make Web Apps anymore?... Anyone?....

Web apps were always a stopgap measure.

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post #18 of 40
Quote:
Originally Posted by EagerDragon View Post

I was looking forward to no more than 25% free apps. I think it devalues the iPhone and creates 25 flavors of the same type of app. When people charge those that are successful have money to innovate and maintain their product, the free ones stagnate a lot of times.

I'm curious to see if any sort of rating system is implemented precisely for this reason. If I have a choice of 10 apps that do the roughly the same thing, I really don't want to have to beta them all.
post #19 of 40
Yeah but 100% of games won't.
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post #20 of 40
anyone know where i can find a list of upcoming apps (besides the one's at wwdc)? interested in seeing what is going to be out there. saw this video on some upcoming products
(http://youtube.com/watch?v=irXCMdRprfw) but am looking for more info. any thoughts?
post #21 of 40
I don't have an iPhone yet, but maybe I'm missing something here. When I go to the Apps Store on Apple's web site via desktop computer I don't see any prices for any of the apps. Are they listed only if viewed on an iPhone/iTouch?

Also it would be nice to see the size of the file that will be installed on the iPhone/iTouch. Maybe this is also only shown when viewed by iPhone/iTouch.
post #22 of 40
Quote:
Originally Posted by EagerDragon View Post

I was looking forward to no more than 25% free apps. I think it devalues the iPhone and creates 25 flavors of the same type of app. When people charge those that are successful have money to innovate and maintain their product, the free ones stagnate a lot of times.

One thing a lot of people are forgetting is how terribly *easy* it is to make apps for iPhone.

- If it only takes 15 minutes to make an app for the iPhone and you are instantly distributing it to millions of users, is it really worth 20 bucks?

- If there is no cardboard box to print, no CD to press, and no distribution network to manage, is it fair to charge even 10 bucks?

- If there is no software company with dozens of employees, office space, expense money and trips to conventions but rather just one person in front of a computer, is it really worth even 5 bucks?

The answer to all above is probably not (just in case you were wondering).

Another way to look at it, is that if a multi-hundred-million dollar movie made by thousands of workers employed in hundreds of companies over a multi-year development cycle is only worth 10 bucks in iTunes, what makes you think that yet another rip-off of Tetris or Doom is worth any more?

food for thought.
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post #23 of 40
Quote:
Originally Posted by Virgil-TB2 View Post

One thing a lot of people are forgetting is how terribly *easy* it is to make apps for iPhone.

- If it only takes 15 minutes to make an app for the iPhone and you are instantly distributing it to millions of users, is it really worth 20 bucks?

- If there is no cardboard box to print, no CD to press, and no distribution network to manage, is it fair to charge even 10 bucks?

- If there is no software company with dozens of employees, office space, expense money and trips to conventions but rather just one person in front of a computer, is it really worth even 5 bucks?

The answer to all above is probably not (just in case you were wondering).

Another way to look at it, is that if a multi-hundred-million dollar movie made by thousands of workers employed in hundreds of companies over a multi-year development cycle is only worth 10 bucks in iTunes, what makes you think that yet another rip-off of Tetris or Doom is worth any more?

food for thought.

Good point, however my fear is that there will be 22 free Tetris and 60 versions of Doom, etc, etc.

Next thing you know you are scrolling thru thousands of apps and basically have to beta test them to figure out which suck and which are nice.

A voting system would help, but I am not sure it will work that well due to the volume of testing that need to occur with the huge number of free apps.

Maybe I will stick to the for pay apps.
post #24 of 40
Quote:
Originally Posted by EagerDragon View Post

Good point, however my fear is that there will be 22 free Tetris and 60 versions of Doom, etc, etc.

Next thing you know you are scrolling thru thousands of apps and basically have to beta test them to figure out which suck and which are nice.

A voting system would help, but I am not sure it will work that well due to the volume of testing that need to occur with the huge number of free apps.

Maybe I will stick to the for pay apps.

talking about doom does the iphone have a real file system so you can run user WADs?

also a FPS with no keyboard or joystick?
post #25 of 40
Quote:
Originally Posted by Virgil-TB2 View Post

Another way to look at it, is that if a multi-hundred-million dollar movie made by thousands of workers employed in hundreds of companies over a multi-year development cycle is only worth 10 bucks in iTunes, what makes you think that yet another rip-off of Tetris or Doom is worth any more?

The value of things doesn't reside in the effort to complete them, but the value of the finished product.

For instance, if a million people spent a year digging the worlds largest hole, and then immediately filling it back up, would you pay $30 billion for it? No, you would pay based on the utility of the productin this case, an empty plot of land like any other.

Movies cost $10 because millions of people buy them.

Apps, while taking less effort to create, cost $20 because only thousands of people buy them.
post #26 of 40
I can see a fairly large number of shareware/commercial developers delivering free apps that tie in with their current Mac apps. I use the "pedias" (like Bookpedia) to keep track of my books, CDs & DVDs and I would be surprised if they don't deliver a free iPhone/touch version to link the Mac and iPhone/touch. Another example would be Bento - a simple database that would link well with the iPhone/touch.

Other companies, like banks, might also provide free iPhone/touch apps for their customers. Something I believe will be a smart move over the next year or two.

I'm also going to be interesting in what comes out in the free to $5 range as stand alone apps. I believe that there will be a lot of creativity out there and we're in for an exciting year.
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post #27 of 40
Quote:
Originally Posted by mh71 View Post

Well, the guys selling the medical flash cards and such are going to be charging real money. If I were a doctor and I saw that CAT Scan app demoed, I think I would buy an iPhone and that app just for its own sake. And that is just one app and it showed a high level innovation and value add for the customer.

Other medical apps are free/donationware:

http://www.osirix-viewer.com/MobileOsiriXPreview.mov

I'm just a patient, but have kept copies of my x-rays, CT Scans and PET/CT Scans on my MacBook since I found the site.
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post #28 of 40
Quote:
Originally Posted by ascii View Post

In other news, a survey of 3 random people off the street reveals 100% of people are female.

awesome.
post #29 of 40
Quote:
Originally Posted by Joe_the_dragon View Post

talking about doom does the iphone have a real file system so you can run user WADs?

also a FPS with no keyboard or joystick?

No idea
post #30 of 40
Quote:
Originally Posted by mh71 View Post

Well, the guys selling the medical flash cards and such are going to be charging real money. If I were a doctor and I saw that CAT Scan app demoed, I think I would buy an iPhone and that app just for its own sake. And that is just one app and it showed a high level innovation and value add for the customer.

*Ahem*

I am a doctor. One remote-viewing PACS application on a 3.5" screen will likely be inadequate for true radiology needs.

However, I will be buying one on July 11th!
post #31 of 40
Quote:
Originally Posted by EagerDragon View Post

If this turns out well, Apple may consider using this to sell Mac software.

Good for you for charging something for your software. Your time and effort is a valuable resource.

Someone new to the development process is not likely to make something of value the first time around. The value of the work will likely go up with experience.

Quote:
Originally Posted by Ireland View Post

Yeah but 100% of games won't.

I'm sure there will be at least some free games.

Quote:
Originally Posted by GQB View Post

I'm curious to see if any sort of rating system is implemented precisely for this reason. If I have a choice of 10 apps that do the roughly the same thing, I really don't want to have to beta them all.

I think it's likely. iTunes already supports user submitted ratings for music and videos.

I think it would be nice if Apple had offered a way to do demoware, try it for 30 days and if you want to use it for longer, pay for it.
post #32 of 40
Quote:
Originally Posted by EagerDragon View Post

I wonder how many people will continue development of software for the hacked iPhones given that their is an App store with a lot of free software.

I would say quite e few. There are apps that Apple isn't allowing for good reason, such as VoIP on the carrier's network and torrent apps. Plus, there are always those who always conform to non-conformity.


Quote:
Originally Posted by YodaMac View Post

I have so many Web Apps bookmarked on my iPhone home-screens that I can't imagine being able to actually fit them all on an 8 or 16GB iPhone (along with my music, et al.)

Add them up? How many do you have. I only 2.83GB in my 3rd-party applications folder among 83 items. Though there are plenty of other files for the apps stored in /Library and ~/Library. Plus, I have removed unneeded language localizations and PPC code from them.

Still, that is only an average of 34MB per app. iPhone apps will be considerably smaller. Most will be well under the 10MB limit that allows them to be downloaded over the carrier's network. At 10MB each that is 124 apps per GB.
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post #33 of 40
Quote:
Originally Posted by EagerDragon View Post

I was looking forward to no more than 25% free apps. I think it devalues the iPhone and creates 25 flavors of the same type of app. When people charge those that are successful have money to innovate and maintain their product, the free ones stagnate a lot of times.

Yeah that is called the free market in an emergent sector of the economy.

I don't see how that devalues the iPhone. That's like saying free gas devalues a Mercedes.
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post #34 of 40
Quote:
Originally Posted by NanoAkron View Post

*Ahem*

I am a doctor. One remote-viewing PACS application on a 3.5" screen will likely be inadequate for true radiology needs.

However, I will be buying one on July 11th!

I only have a lowly 5G iPod, and no experience with an iPod Touch, but can you send the video out to a larger more useful display and use the Touch or iPhone as the manipulating device?
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post #35 of 40
70% of iPhone Apps to be free, Developers keep 70% of revenues. It was fate.
post #36 of 40
Quote:
Originally Posted by Wiggin View Post

The developer feedback on Apple's efforts to make it a top-notch development platform is encouraging! As for the apps that aren't just front-ends for existing web services, the pessimist in me wonders how many of those apps are free because they are going to be advertising supported?


Bullshit. Let me give you my feedback. 21,000 developers have not been approved yet and my company is one of them. We have thousands of customers and have developed for Macs for years now but that hasn't mattered at all.

We're very pissed off at Apple and so are many other developers. What is the purpose of limiting developers ? There is none, it is a stupid idea. They don't limit the number of developers for Mac. Most other companies would do anything to get developers to their platform.

Apple is not making a top notch developer platform, they have pissed off 21,000 would be iPhone developers who will be glad to develop for Google's Android instead. Apps will make or break the iPhone's future success and so far Apple is making dumb decisions like limiting developers and only selling via iTunes.
post #37 of 40
Quote:
Originally Posted by enzomedici View Post

Bullshit. Let me give you my feedback. 21,000 developers have not been approved yet and my company is one of them. We have thousands of customers and have developed for Macs for years now but that hasn't mattered at all.

We're very pissed off at Apple and so are many other developers. What is the purpose of limiting developers ? There is none, it is a stupid idea. They don't limit the number of developers for Mac. Most other companies would do anything to get developers to their platform.

It's a beta test. They said they had 4000 beta testers. There is a point where they can't just take all comers, when it's not a finished product.
post #38 of 40
Quote:
Originally Posted by MacGregor View Post

I only have a lowly 5G iPod, and no experience with an iPod Touch, but can you send the video out to a larger more useful display and use the Touch or iPhone as the manipulating device?

That would be up to the inventiveness of the developer community... as a matter of fact, you might even find yourself up to the challenge!

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post #39 of 40
Quote:
Originally Posted by enzomedici View Post

Bullshit. Let me give you my feedback. 21,000 developers have not been approved yet and my company is one of them. We have thousands of customers and have developed for Macs for years now but that hasn't mattered at all.

We're very pissed off at Apple and so are many other developers. What is the purpose of limiting developers ? There is none, it is a stupid idea. They don't limit the number of developers for Mac. Most other companies would do anything to get developers to their platform.

Apple is not making a top notch developer platform, they have pissed off 21,000 would be iPhone developers who will be glad to develop for Google's Android instead. Apps will make or break the iPhone's future success and so far Apple is making dumb decisions like limiting developers and only selling via iTunes.

Let's put a little perspective on things. There are reasons very valid reasons not to open up the flood gates. The most important of which to keep poorly developed apps that go against the SDK rules from showing up in droves. And yes, these are the mostly likely to come if there are no check and balances.

Moving on, between the SDK keynote release and announcement of the App Store program and the WWDC event where Jobs announced they have 4000 beta tests in the program is only about 93 days. If Apple approved, tested and verified apps and organizations on every signel one of those days that means that are approving about 43 companies' plans and their apps every day. That is a lot in itself.

You have the free SDK, which is already on its 7th beta in 3 months. Apple will be opening up the App Store to more developers. Just continue to make you app more refined until you're excepted.
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post #40 of 40
Does it really matter what percentage of apps are free?
What really matters is the cost of useful apps that people will actually obtain and use.

For instance, just about all dashboard widgets are free. But 99.9% of them are complete crap so who cares that they are free.
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