The Emperor’s New Clothes
A lot has been written about the success of the App Store, over 50,000 apps available, 1.5 Billion downloads in its first year, talk about how it’s unprecedented etc. However I think it’s long past time for a reality check here. This is a no holds barred, deadly serious, but sometimes snarky look at the App Store. For those with short attention spans, here’s the 140 char summary of what follows:
http://twitter.com/PolarBearFarm/status/2880107386
It’s interesting to contrast the meaningless PR fluff around the App Store, with what was happening in Jailbreak, long before the App Store was around. This community was per device as successful in terms of number of downloads, and vastly more successful from a business viability perspective. There was significantly more innovation, and creativity in the app offerings. But just as importantly, it was very possible for us to run a real business even without any official development tools, with no seamless way to charge customers, and a potential market of roughly 1/50th the size of what exists today.
Given all those challenges in Jailbreak, you’d have though that the iTunes Store would take a good thing, fix the things which weren’t great, and introduce the world of iPhone Apps to a wider audience. Instead it has introduced factors which caused the bottom to fall out of the market, perhaps irreparably so.
Today, if someone offered me the choice between operating a business in a jailbreak style market (with exact same conditions as it was pre App Store) vs operating a business on the App Store, i’d pick jailbreak without question. Of course things have changed significantly since the App Store has been around, but the fact that a ‘hacking’ community had more business viably than the App Store, is a reflection of Apple’s failures here.
The sad reality of the App Store is that there is just no market there capable of supporting full time dedicated iPhone development companies. Everyone knows it, from the most establish games studios down to startups trying to build dedication companies around this platform:
Ian Lynch Smith of Freeverse: “The collapse of the initial pricing model of $10 and $5 games to 99-cent and $3 games has made everyone very cautious. We’re trying to keep our developments to three or four months at most.”
Jon Fortt of Fortune: “A casual observer surfing through the offerings on iTunes today could easily mistake it for a digital dollar store. Though the place is crowded with options, the app store bestseller list is dominated by 99-cent games like the Moron Test and Sally’s Spa — hardly the foundation of a new mobile economy.”
John Carmack of id Software: “If [iPhone] games could have a reasonable shelf life at $9.99, you will start seeing multi-million dollar development budgets as the market continues to grow. But if it turns out the only way you end up being successful on the iPhone is games that cost a couple dollars, you’re never going to achieve that parity with the other handhelds.”
You can then look at the strategy taken by EA recently, in creating offshoot 8lb Gorilla. Essentially forced into doing something because Apple have killed the viability of anything above $0.99. 8lb Gorilla is setup to churn out limited scale $0.99 games every few weeks. All in an attempt for EA to find some viable way to operate in a market they clearly feel a need to have a presence in. I have my doubts that this will work, even with the featuring Apple gives companies like this. This move by EA should horrify Apple. The alarm bells should be ringing, cause the ship is sinking.
These problems can be directly attributed to the market conditions Apple have created through either a total and utter lack of planning and incompetence when building the App Store, or an intentional strategy set out to suppress application prices, with the sole intent of helping to drive device sales.
What’s most concerning is when Tim Cook was asked specific questions around this in the latest financial results conference call. There was no acknowledgement of the real issues which exist around pricing, it was in fact dismissed, saying developers are just pricing based on elasticity analysis:
Charles Wolf - Needham & Company
Okay, well, let me ask a question about the App Store then. In terms of application prices, there appears to be a race to the bottom. I’ve noticed that there’s an increasing number of $0.99 offerings. Do you regard this as a concern and if so, are you taking any steps to enable consumers to separate quality apps from the garbage?
Timothy D. Cook
Charlie, we are always looking for ways to categorize apps differently and we do have some ideas in this area. As you know, today we do it by type of App and also have show popular apps and top-selling apps, et cetera. We realize there’s opportunity there for further improvement and are working on that. In terms of the price, the developer sets the price and so it’s up to the developer what to charge and I think what they are doing is they are doing what any good business person would do, is doing the elasticity analysis and deciding where to best set their price. I would think as the installed base grows more and more and more, it makes more and more sense to have a bit lower prices but that’s totally up to the developers and I am sure each of them may do that in a little different manner.
These comments infuriated me. It shows that Apple, at the highest level, has a total and utter lack of understanding of the issues which exist around App Store pricing and the consequences of that. The biggest problem with the App Store is not a categorisation problem, it’s more than clear that the App Store in its current implementation forces virtually all app prices to the $0.99 price point. There is no debate, there’s no elasticity analysis required, it’s the price point virtually all applications are pushed to. It’s unsustainable for all serious developers, and it’s killing investment in innovation and creativity, it’s killing the platform.
How could Apple get this so wrong? How have they managed to kill any REAL creativity and innovation on a platform which is clearly one of the best around, from both a user perspective, and a technical development perspective. A platform with proven business viability before Apple had even entered the scene.
Any developer who has experienced the business side of the App Store, iTunes Connect, the app submission process, is well aware that there is virtually zero care and attention to detail taken, it barely works for its intended purpose, and that lack of care and attention even creeps into the customer facing App Store. Put simply, the whole thing is entirely unprofessional, bordering on incompetent, and Apple should be highly embarrassed by it. The astounding thing is that this is so at odds with what most people expect from Apple: it’s certainly a far cry from the usual obsessive attention to detail in most of its consumer facing products.
There are so many fundamental flaws in the App Store design which i’ve written about previously, and filed bug reports a LONG time ago on. These have simply killed the viability of the iPhone platform for serious businesses. I won’t rehash all those flaws in this post, you’ll find them in my other posts.
There are two options to fix this as I see it:
1. Close the iTunes App Store storefont and simply give developers an API for payment processing and binary delivery using iTunes Accounts. That way Apple rankings, featuring, and organisation don’t influence the market at all, making for a truly free market.
OR
2. Fix the App Store like a LOT of developers have been politely requesting since last year! I’m not buying the “App Store is new” argument anymore, it’s not. Apple have the resources to be able to make the most important changes needed in a matter of weeks, what they lack is the will and direction to do so.
I’ve lost all hope that the App Store will actually see the real changes is needs. As it stands it’s poorly planned, poorly managed, poorly executed, and it’s an embarrassment to Apple. They should be ashamed to be associated with it.
As with many other serious iPhone developers recently, we’ve made the hard decision to kill all but one project in progress, and stop investing any resources in creating new applications. We’ll continue to sell and fully support our existing iPhone offerings, however we’re already moving to platforms which show signs of real viability.
It’s a shame, the iPhone showed so much promise, it’s such a fun technical platform to develop for, but Apple have simply setup a market in a way which kills real businesses.
Layton Duncan
July 29th, 2009 at 12:01 pm
It’s obvious that the iPhone is just a hobbyist platform that isn’t designed for serious developers. Apple doesn’t seem to mind because they are raking in the money 30 cents at a time. It adds up on their end. To us, it’s pennies spread out over tens of thousands of applications.
July 29th, 2009 at 3:13 pm
I’ve come to about the same conclusion as you have - that the iPhone is no longer a viable platform to develop for (solely due to the app store hassles). Unfortunately, for most non-US/non-European developers, the app store is still the only viable venue for featuring their products due to the fact that BlackBerry, and Android have limitations on who can use their respective app stores. Maybe Palm will change things when their app catalogue comes online. One can only hope …
July 29th, 2009 at 11:57 pm
The problem is that there is a discrepancy between what Apple want to achieve via the App Store and what professional (as opposed to hobbyist) developers want. Apple are obviously interested in the revenue-side of the store but they also have an interest in getting people to buy as many applications as they can, regardless of price, so that people become locked in to the platform. They know that people are more likely to blow 99c on an application than $5 or $10 so they are happy to take 30c per sale rather than $1.50 or $3. The low price point also means that there is marginally less need to provide try-before-you-buy applications which further ties people in.
I’d like to see Apple do a couple of things:
1. Allow users to review the Top x listings by number of sales (current), total revenue and/or ratings.
2. Automatically shift applications that have not been updated in the last few months to the end of searches unless they have a certain average rating and/or number of sales This would mean that current, actively developed applications are more prominently displayed and those application that were written during the early gold-rush days and then abandoned are not.
July 30th, 2009 at 3:30 am
[...] from their lengthy tirade in their official blog, Polar Bear Farm have given this a lot of thought. The post reveals their ongoing frustration with [...]
July 30th, 2009 at 9:57 am
I am not an app developer, I am a web dev who is in the process of creating a review site based on iPhone games. I am quite frankly stunned at how Apple is behaving regarding you guys (devs).
Serious dev companies are the bread and butter of this platform, I know that I would pay $30 for a game of the same calibre as those released on DSi and PSP. This translates over to non game apps also, maybe not $30 but certainly $10 - $15.
The sad truth is that the App store has become the eBay of the software market. The ones who hold the reigns get rich, the ones who create poor apps clog the market and the ones who are creative and create amazing apps get trodden on and spat out.
Apple better wake up from their ignorance or someone else, i.e. Sony, Palm, Blackberry, google etc… will beat the crap out of them, just like Microsoft did in the PC market. I too have a financial interest in the app store having decent functionality and can’t believe that Apple could be so short sighted.
July 30th, 2009 at 1:35 pm
Wait, it gets worse.
We were told that apps on the iPhone were a special case because of security/performance concerns to it being a telephone device, and thus a special SDK/AppStore regime was needed. So why is the iPod Touch — a device without telephony — also subject to the AppStore regulations and schemes?
Simple answer: because it allows Apple to own the entire process. If you want to create an app for an iDevice, you HAVE to sell it through Apple. They take their cut, they control what’s for sale, they block anything that even hints of competition, they dictate what technologies an app can use at any given time. A developer’s iDevice business model is ENTIRELY dependent on Apple’s whims.
And soon we’ll have an iTablet. Probably without telephony capability, but who knows. And guess what? It’s almost certain that it will use the AppStore and be subject to the exact same restrictions as the other iDevices. Another COMPLETELY closed system, with a race to the bottom of the market for consumer dollars. Yes, you too can spend a year developing an app that will cost 99 cents, and which will compete against the mindshare and marketing clutter of a thousand iFart apps…
Oh, wait. You won’t do that, because it would be stupid. Instead, you’ll be forced to spend a few weeks on some crummy app because that’s all the market will reward. And that’s all you can risk when there’s no certainty that your app will be “published”.
Now extrapolate. What are the odds that some form of Mac OS X will also use the AppStore soon? Sure, it will be incremental: at first it will be an opt-in system, and Apple will sell it as a way to “guarantee customer security” or somesuch, and they’ll sell it as a way for Mac developers to make money, but what it means is that Apple will control the Mac application market as well.
Does this seem far fetched? If so, I suggest you look at Apple’s priorities over the last few years, and compare how much time they’ve spent on AppStore and iPhone OS, relative to Mac OS X development. Developers are now an asset to be harvested.
July 30th, 2009 at 3:18 pm
[...] And they should. It’s a disgrace. Apple semi-fanboy that I am, they should be ashamed. See also DF on this post. Posted by bfp in Blog This, Rants, Geek | [...]
July 30th, 2009 at 5:13 pm
[...] like lepers. I’ve experienced the process of submitting an app first-hand, and completely concur with PolarBearFarm that the experience is [...]
July 30th, 2009 at 5:37 pm
Great article. Agree 100%.
July 30th, 2009 at 5:45 pm
[...] in a timely manner (if at all). I’m not yet considering abandoning the platform (as others have — we only just got here), but I’m annoyed. Not sure if says very good things or bad [...]
July 30th, 2009 at 6:25 pm
I looked at my touch the other day and found I had almost 50 apps installed. 13 were free. at least two cost 30 dollars.
I would be very happy if apple released a touch with a 7″ screen or so.
And also happy to see the arbitrary whimsical decision process stopped. I am an end user not a developer but I know I am not going to see the potential realised for this device if every app is 99c
July 31st, 2009 at 1:01 am
A tiered store would help solve some of the pricing issues. Having a different Top 10 list for $1-5, $5-10, $10-20, and $20 above priced apps would help get quality (but pricy) apps some better recognition. As it is now, anything above $10 has almost no chance of getting into the Top 10, as the list is quantitative and not qualitative.
Would be nice if the Big boys can compete for the Top Premium App spot, and let low priced apps compete amongst themselves.
July 31st, 2009 at 2:47 am
[...] Layton Duncan: A lot has been written about the success of the App Store, over 50,000 apps available, 1.5 Billion downloads in its first year, talk about how it’s unprecedented etc. However I think it’s long past time for a reality check here. This is a no holds barred, deadly serious, but sometimes snarky look at the App Store. [...]
July 31st, 2009 at 7:54 pm
I’ve been developing for the iPhone since the App Store opened, and my experience is very different; for me it works almost perfectly. I’ve never had any problems with supplying apps (4 so far), with all of them, including updates, taking a few days at the most for making it into the store.
Additionally, none of the other stores enable me to be a small developer and charge money: Android store is horrible from a legal standpoint (I’m personally responsible for any demands by customers wanting to have their money back; I have to do a tax declaration in every country I sell in and in the US, for each separate state, since I am legally the one selling, not Google (very fun trying to do this from Europe); I have to set the price in SEK which means almost no users understand what the application costs; all of this makes it impossible as a one-man operation to use Android, unfortunately), Palm’s haven’t really been available yet, and at least when I initially looked at the demands they had similar issues as Android; Windows Mobile is too new for me to have considered.
So, essentially, for a small operation like myself, Apple’s solution is by far the best. Without it there is no way I would have been able to sell anything like I have.
But: For a larger operation there are of course issues such as investing a lot of money without being sure the application will make it into the store, and if you are developing an application which might be problematic from Apple’s point of view I realize there is a need for far more transparency Also, having different top lists depending on price is a good idea, definitely.
In short, my experience is much better than yours, but I do see where you are coming from, even though I also think that the fundamental problem is that it is difficult to showcase 50,000 applications; no matter what, only a few of those will be visible.
August 1st, 2009 at 11:19 am
Hi Layton, I couldn’t agree with you more. Great post. I think there is a third option to improve the situation. Instead of relying on the Apple to fix their App Store why don’t people start building tools that help people promote their applications outside of the App Store.
It is not a perfect solution because you will still rely on Apple for payment processing and have to go through their god awful approval process but if developers had tools to promote their applications across the web then maybe the pricing model might change and the apps worth more than $.99 could charge more than $.99.
This is one of our motivations behind starting http://appsto.re we want to be able to give developers tools to promote their applications. We only just launched last week but we have lots of plans. By the way I am a big fan of your facematch app, http://appsto.re/facematch. Please get in touch if you want to talk more on how to help iPhone devs patrick at appsto.re.
August 1st, 2009 at 2:36 pm
The FCC has sent Apple (and AT&T and Google) a “Please Explain” letter. Pretty much entirely awesome.
August 2nd, 2009 at 1:37 am
Well, the FCC finally got bored of suing Howerd Stern for letting people bite each other on air. Now they’re moving on to this. Might be interesting.
August 3rd, 2009 at 10:54 am
I’m not particularly informed on the issue, so I’m curious, how has “Apple killed the viability of anything above $0.99″?
Honestly, if it is because that is what customers want to buy, it is characteristic of the market rather than any nefarious plan on Apple’s behalf. Why exactly should Apple protect the developer community from the effects of a competitive market, against the interests of their [real] customers?
Of course, it is not a fair market as long as Apple maintains the tight grip on the market that they do. But it makes me smirk just a little bit when developers who have quite happily bought into the Apple ‘lifestyle’ (trendy, over-priced, vendor dictated) are surprised that they are treated no differently.
August 3rd, 2009 at 10:21 pm
[...] time and money into creating iPhone apps. (Steven Frank, Justin Williams, Craig Hockenberry, and Layton Duncan have written must-read essays about troubles developing for the iPhone, focusing on the App Store [...]
August 6th, 2009 at 5:04 am
[...] the app store from the iTunes music store, they need to reimplement the approval process. Clean up iTunes Connect. Provide a more scalable approval process that doesn’t piss developers off because they have [...]
August 6th, 2009 at 5:30 am
[...] the much advertised success, Apple actually hasn’t gotten the AppStore quite right. See here, here and here for some very well reasoned complaints and observations from developers on how the [...]