Gene Munster, an analyst at the firm Piper Jaffray, conducted a survey recently amongst 20 iPhone developers at WWDC. The survey yielded some surprising results. Surprising and perhaps very welcome for us; perhaps very disappointing for Apple.
The survey showed that around 71% of the apps to be offered through the app store would be completely free of charge. Of those that were charged for, the average price would be $2.29. Whilst some of this may be the developers talking down the true costs of their soon to be released projects, it is unlikely to account for the massive shortfall from Apple’s expectations. A keynote at the conference seemed to indicate that they expected, and had budgeted for, an average price nearer $10.
The price is all important to Apple, who will profit through the app store on the basis of a percentage from each sale. If the developers and releasing apps through the app store for nothing, then Apple stand to gain, well, nothing in terms of direct commissions. They are essentially providing hosting, distribution and expensive bandwidth for absolutely free.
The app store will be successful whatever the price of the apps offered therein, and even if they were all free the associated benefits to the iPhone owners would outweigh any costs incurred in providing the service. Hopefully Apple will realize this
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