Sure, the iPhone 3GS is a powerful phone, with the hardware and software capable of rivaling the current set of handheld gaming consoles in the market. Despite that fact, it isn't likely that the platform will see apps drastically improve. At least, that's if the recent analysis of App Store pricing from App Cubby proves itself right.
According to the developer, the new unofficial price ceiling for Apple's download storefront is $5, down from the $10 that it was a few months before. That is a very drastic drop and one that puts software developers at a crossroads - do you keep your price at a premium level, risking slower sales, or try to run after volume?
The problem, however, is much bigger. Right at this moment, the average price in the App Store has gone down to $1.39 for games and $2.58 for all apps. At those prices (even at the $5 ceiling), there are virtually no developers willing to invest more than a few months working on a high-quality software, much less a high-end graphics game that won't run on older-generation iPhones (effectively eliminating a large amount of users).
It's a dilemma with no easy solution in sight. The main issue, according to App Cubby, is that pricing expectations among consumers are unrealistic. Spoiled by 99-cent apps, their attitudes do no favors for those who wish to gain attractive profits from their work. In a market where only $5 apps will ever have a fighting chance of hitting the Top 100, very few companies will be willing to invest serious money to produce serious software.
App Cubby proposes some strategies to help turn the situation around, although it will likely take some time before we begin seeing if anything can be made from it. It's an unfortunate situation, but one that will likely be resolved as the business model of mobile apps matures - which, obviously, isn't anytime soon.
Photo Credit: MarkJ
Soon the prices will go down to $0.99 just like it did at the time of iPhone 2G. One of the reason people buy iPhone apps is because they are cheap or freely available.
I pretty much expected this. There is a huge number of old iphone users which the developers have to think about. They can’t just ignore them and start creating new apps that won’t be compatible with iphone 2G and 3G.