Watershed Moment

Ever since Apple announced iOS 7 at WWDC, developers have been coming to grips with what the new operating system will mean for them. There’s little doubt iOS 7 represents a huge opportunity for developers to get their updated products in front of massive numbers of new users almost overnight. But there’s another opportunity here for developers, one that’s been largely ignored up until now – paid upgrades. To be more precise, all new, iOS 7 paid versions of existing applications.

I’m sure many users are expecting developers of popular applications to simply update interface elements, compile some code and easily drop a brand spanking new version of their app onto the App Store for free. There’s little doubt that the majority of iOS 7 updates to existing apps will be free (which will please Apple), but I suspect there will be a surprising number of developers who will use the launch of the new operating system to completely re-boot their app, and why not? The visual and interactive paradigms iOS 7 mark a natural breaking off point and a perfect opportunity to re-coup costs. Some existing paid apps might even adopt an iOS 7 only strategy which means they’ll have no choice but to charge again.

As any developer knows, software doesn’t magically grow on trees. Significant reworks of existing apps can represent hundreds of hours of development time and depending on the complexity of the apps in question, require much more than simply updating graphics. Taking full advantage of new APIs, designing new interactions and more can represent a healthy investment, time is money after all. At what point in the update process does a developer decide she needs to charge for it? How many users will be alienated by charging again? Will these users be offset by the *huge* influx of new people Apple brings to the table with the launch of the new OS?

Perhaps a better way to answer the question might be, how willing would you be to re-purchase your favorite apps if they are optimized for iOS 7? Look at your device’s home screen and go down the list of apps you use most and ask yourself if you could live without it once you upgrade. I think that most users (at least those that matter to developers) would answer that they would gladly pay again if it means having the latest and greatest version of their favorite apps, at least I would hope so.

With the full-priced launch of Logic Pro X, it’s now pretty clear Apple won’t be implementing a paid upgrade mechanism in the App Store. Developers are forced into either giving free upgrades for life, nickel-and-diming users with in-app purchases or occasionally launching new, paid versions of their apps. At the Iconfactory, we typically offer new paid version of our apps (xScope, Twitterrific) about every 18 months with many free upgrades in between. Though there are always users who will complain about having to pay for all-new versions, the vast majority know that in order for an app to survive and flourish, they occasionally have to do their part and support its development. Hopefully the upcoming wave of apps updated for iOS 7, both free and paid, will help people fall in love with their apps all over again.

UPDATE: Just when you thought there was hope, a new report out indicates that the average price of apps in the App Store is now at an all-time low of just $0.19. Consumers continue to expect world-class software experiences in exchange for basically nothing. The author says that the freemium model may be a “wiser business move” in the long run but I disagree. It is much harder to recoup the cost of development if you have to postpone revenue much beyond launch of your product, especially if you cannot even guarantee success. If the trend continues, I don’t see how developers can make a living on the App Store.

Comments

  1. Zak Auerbach says:

    I love paying for upgrades, and I love supporting developers. My problem is not with developers charging but more with the fact that there will be a period of 1-2 weeks after the launch were tons of apps will be updated for iOS 7 and suddenly require a paid “upgrade.” While individually I wouldn’t have an issue paying for any of the apps that I use daily as they would be organically updated over the course of a year or two, the fact that many of these upgrades will happen over such a short period of time is seriously hard on my wallet. I’ve spent hundreds of dollars (probably close to $700-800) on software just on the iOS and Mac App store. If a third of those suddenly had paid updates all at once I wouldn’t be able to afford it immediately and would have to triage.

  2. Russ Harlan says:

    I am excited to see what’s next in iOS 7 from quality app makers like IconFactory and I’m happy to compensate for the utility and delight good apps provide. Keep the faith, Ged. Your pricing strategy has been spot on so far.

  3. To the previous commenter: spreading it out won’t change the amount you pay, it’ll just make it *seem* less. So if you prefer to spread it out, you prefer to lie to yourself. What’s wrong with some level of budgeting?

  4. Bren says:

    @Chris That’s a daft comment. General snide Internet remark *sigh*

    My understanding of what Zach’s is saying, and correct me if I am wrong here is that you build your software library over years (first iOS device was 1st Gen iPod touch). He’s happy to pay for good software but it’s been done over a long period of time. Then, all of a sudden, every app wants a paid upgrade on the day iOS comes out. It isn’t cheap and is a perfectly valid point. He’s not saying they shouldn’t charge – just that it will hurt if they do. All developers, at once.

  5. Chris Long says:

    hang in there, ged. you guys make some of THE BEST software around. i support iconfactory’s efforts 100%, and will inevitably buy nearly anything/everything you release, because i know that your pricing is fair and your products are top-notch.

  6. Craig Hunter says:

    I’m not seeing the logic where iOS 7 brings a huge influx of new users. It will carry over 90+ % of existing iOS 6 users in a short amount of time, and of course the market will probably continue to grow at the usual pace and bring in the normal amount of new users per month. But how is iOS 7 going to bring in a massive amount of new-to-iOS users? I don’t see that happening. Please elaborate.

  7. azulum says:

    That 19¢ per app figure omits IAP, which means that apps like Paper by 53 and Letterpress by Atebits are counted as free, when in actuality, they are trial versions. This is the way the market is moving. Some apps, admittedly, shouldn’t follow this direction. But IAP is far better than having a Lite and Pro version in the store, and it can give some devs a way to add functionality to their apps that would be unlockable by new and existing users alike.

  8. Kit says:

    As a developer, I always hope that people want to spend more money on my software, but as a user, I rarely do so. (I guess I “don’t matter to developers”. That’s probably fair!)

    I don’t even do all the free upgrades I’m entitled to. I’ve been bitten too many times by broken updates, feature removals, completely changed UIs that I don’t have time to relearn, and destruction or corruption of my data. If something works, I stick with it, especially on iOS where downgrades are basically impossible.

    When my hardware dies and I have to buy new devices that won’t run the old iOS (and won’t run the old version of your apps), then I’ll buy the new version, if I liked it before.

    There’s 2 kinds of apps I have. One is the “almost free ($3 or less)”. Why would I pay money to risk breaking the app? Cheapo apps are the most likely to be broken after an upgrade, and least likely to be fixed afterwards because I’m just one user (with a weird config, often) out of millions. These developers don’t care about me, which is understandable, so I can’t justify caring to try upgrading.

    The other kind of app are those I spent $30+ on. These are fantastic apps, and not likely be broken by an upgrade, but then, they were fantastic back when I spent $30 on them. Why do I need to change anything? To me, that’s a sunk cost, and every week I get more use out of it is wonderful value. Furthermore, the $30 apps are typically the ones that don’t just use the built-in iOS controls, anyway, because they have an amazing team building everything from scratch, so these don’t look out of place on iOS 7 at all. One of my favorites actually looks far more at home on iOS 7 than iOS 4-6, even though it was designed years ago!

    Now, if developers decide that iOS 7 is a great time to update the UI and also change functionality in a way that I want, that’s great, and I’d definitely consider buying those. But as a user, I’d consider it (new UI, new feature set) to be a new app purchase, not just an upgrade. It’s not an automatic decision for me. You have to sell me on the features and UI like you did before. I said “Yes” to the old UI and features, not the app name. When you change everything except the name, you’re asking for a new sale. You’re asking me to pay the full price again, for something which I’m not even sure is equal in quality to the existing one.

    And ha, I can tell what kind of person you are by the phrase “the latest and greatest version of their favorite apps”. You’re one of those guys who loves novelty! But for me, in very few cases do I think the latest version of anything is the greatest version of it. No matter how many millions of dollars they poured into the design of the new version, sometimes it’s just not an improvement. I’d rather have a classic air-cooled Porsche 964 than the latest 911, even if money was no object. Every engineer in Stuttgart can surely tell me 100 technical improvements in the latest model, but the old 964 is just … better. I have a shiny 2012 Mac here (from work) but I’m writing this on my old 2009 Mac because it’s a better machine. :-)

  9. Hamranhansenhansen says:

    I hope all iOS 7 -ready apps are entirely new paid upgrades so that I can easily avoid them in the same way I’m avoiding iOS 7.

  10. Stephen says:

    Is it possible to offer an In App Purchase for a coupon or redeem code for the v2 app in the v1 app?

  11. Stirlo says:

    I love supporting good developers and software, but only last week a dev tried to put in a monthly charge for a very simple (and replaceable) app so that he “could re tool for ios7.”
    The app was already working perfectly on the beta, and once he Spammed all the users asking now much we would be happy to pay monthly, I quickly worked out that this app was not worth it, and the functions could be replicated with other apps quite simply..

    OTOH a true revamp or upgrade and large hours of work do deserve some money, it will be interesting to see how devs and users respond if theres perception of Exploting existing users or “greed”

  12. @CraigHunter:

    > how is iOS 7 going to bring in a massive amount of new-to-iOS users? I don’t see that happening.

    New iOS = new iPhone(s). New iPhone = a million or two people buying it over the course of a weekend, and launching the App Store and go see what apps they can buy.

    Marco Arment has spoken about the huge sales boosts he’s had in the past when a new iPhone comes out. It’s a thing.

  13. Mike says:

    “Some existing paid apps might even adopt an iOS 7 only strategy which means they’ll have no choice but to charge again.”

    How so?

  14. Ged says:

    Craig, with the new OS comes new hardware. It also will lure people from other platforms such as Android back to the fold. This isn’t just a revision in the iOS user interface, this is a revolution. Its launch will be a huge draw for both old and new users alike. Couple with new hardware (multiple handsets if rumors are true) and you have the makings of one of the most successful sales days for App Store developers in five years.

  15. Ged says:

    Mike,

    If I want my code base to focus completely on iOS 7 API’s and break backward compatibility with iOS 5 and 6 then I might choose to re-boot my app for 7 with a new SKU in the App Store while leaving the old version in the store for prior users. Doing this for a paid app means users will have to pay again to own it. Granted, if the dev doesn’t care about backward compatibility, then they could simply release the new version to replace the old and users wouldn’t have to pay again, it’s true. Hope this helps clarify.

  16. 1Password did this to us not that long ago. Forced me to upgrade my 14$ 1Password Pro (iOS) to a 7.99$ 1Password. Depending on how much I use it, I really don’t mind at all. However, less used stuff and Games, unless there was a massive new feature or an expansion to game content, I doubt I would. Unless the cost was negligible.

  17. Bourne says:

    I almost never post comments on the Internet! But, this one … oh man!

    I’d say Apple should also charge us for iOS 7 upgrade! I mean, look at it. These little apps like Twitterrific or the other one (which I never even heard of!) with a few hundred lines of codes want $$ then why not Apple with their millions if not more lines of codes, eh?!!

    In any case, as I said, I never bothered with either of your apps and after reading your thoughts called “Watershed Moment”, I will never even consider them with iOS 7, 8, 9, …

  18. Roxy says:

    I have like over 200+ apps on my iPhone and iPad. And, I actively use about 90 something!

    Your apps are not included though. Sorry. LOL

    To answer your concerns, yes I would pay but ONLY if developer supports both iOS6 as well as iOS7.

    That means, any enhancements / security patches and etc must be available for both iOS not one and no excuses. Then again, IT developers know best how to make one! LOL

    With that said, I know for sure a number of my very fav apps will be deleted thanks to iOS7, ie; clock / alarm, transit based apps and a few more.

    Yours also probably would not be needed by your current customers. So, I’d suggest you come up with some new ideas to make $$ instead of same old same old and charging more .99 or more. LOL

  19. CRagan says:

    Fragmentation = bad for older devices

    I am one of those people that hangs onto devices for a while and repurposes old devices as new ones replace them. That being said, there is already a great deal of fragmentation for my original iPad and iPod touch. It is safe to say that as time goes on these devices are becoming somewhat useless due to a lack of support. This begs the question, are iOS devices worth a long haul investment? My honest answer is no.

    Continue to develop for new hardware and wait for users to catch up. Worrying about conversion in the iOS market is a waste of effort.

  20. Ian says:

    “they could simply release the new version to replace the old and users wouldn’t have to pay again”

    This is what I would like to do with my app but I’m worried about not being able to update screenshots in the store. It seems like the (understandable) change in App Store policy has pushed us towards paid upgrades or am I missing something?

  21. Allan Nyholm Nielsen says:

    Gedeon, I want to quote you “As any developer knows, software doesn’t magically grow on trees.” Almost the same can said about the user, such as myself although said this way “As any user knows, money doesn’t grow on trees.” We are all users one way or the other but of course without you developers we wouldn’t have the apps we do. So hats of to all the developers – which are also users :)

    As one commenter here said about the amount of money spent on software on both iOS and Mac, I’ve also spent that much over time(give or take). I’m not complaining about not having the money to buy a $30 app or whatever the price – because I could have just not done so.

    I will buy some apps again whilst others are going to have to be set to disabled and never be bought again. 1Password is one app I will probably buy once more.

    Also Gedeon, thanks for all the icons the Iconfactory has put out over the years.

  22. Anonymous says:

    My kids own over 100 different games! And, we thank Lord you are NOT a game developer! Imagine that!

    Sir, do you believe people print $$ to feed software developers every time there’s a new OS update?!!

  23. Ged says:

    Anonymous, if you can’t afford to pony up $2-$5 once every 12-18 months for a piece of software you use every day, then I respectfully submit you should ditch your iPhone. Software developers need to make a living just like you do. Do you honestly think we can afford to simply *donate* hundreds, sometimes thousands of hours of our time and without being compensated for it? That’s not how the world works and I really don’t know how this attitude became common place for those who purchase apps.

  24. The question is quite easy to answer.
    If an upgrade brings new unique functions, then yes. If it’s just a compatibility update (UI update is a compatibility update), then no.

  25. And oh, forgot to mention. I have done some UI work on a couple of apps in the App Store. And the UI upgrades to iOS7 is considered free compatibility updates on all of them.

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