Microsoft slams Apple’s “dollar store” app pricing
Microsoft has told mobile app developers their products are worth more than 99 cents. It’s a clear knock at the pricing structure of Apple’s App store.
The comments came at the first “WinMoDevCamp”, a series of events around the world to give developers practical assistance and advice in producing applications for the Windows Marketplace for Mobile store which launches later this year.
TechFlash reports that the firm’s Loke Uei told developers that although they could set their own pricing, “you make more money selling applications than selling your application in a dollar store.”
In case anyone didn’t catch the reference to Apple’s store, Uei went on to appeal to developer egos: “Yes, consumers like to pay 99 cents for applications. But 99 cents, come on, I think your app is worth more than that.”
To demonstrate its emphasis on revenue rather than sales, Microsoft is running a competition to reward the developers of the most popular applications when its store launches. While the prize for free apps will (by definition) be for the most downloaded app, the paid app category will be judged on total revenue rather than the number of sales, rewarding those who get both the product and the pricing right.
The basic principle of what Uei says certainly holds true, though his example of a million-selling 99-cent app potentially selling 500,000 copies at $5.99 seems a bit optimistic. Given that there’s no marginal cost for mobile device apps (the production costs are the same whether you sell one copy or a million), it seems an ideal market for genuinely competitive pricing. And Microsoft may also be hoping the potential of charging higher prices may encourage developers to work on high-quality apps which buyers will find genuinely useful.
However, as the iPhone experience has shown, 99 cents is cheap enough that many users will be prepared to take a gamble on an app, or even buy an unsophisticated novelty app which they know they’ll only use a few times, and simply write off the expense. Ironically Microsoft does achieve its goal of increasing market share for Windows Mobile, it may find developers become much more interested in turning it into a dollar store.
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August 20th, 2009
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