Thoughts on Paid App Upgrades
Apple has created a habit for iPhone and iPad users to expect free updates for apps they use. Partly it was because AppStore is based on iTunes store structure, where there were no “updates” to songs or movies, partly because Apple is a hardware company and wants applications to be a low-cost or even free reason for users to purchase new devices.
During the first years of the App Store Apple managed to attract millions of new users to the platform. These people were looking for games and apps for their iPhones and iPads and brought in enough revenue for developers to build sustainable businesses.
Now it is different. With less people buying iOS devices for the first time and a common perception that a $4.99 app is expensive, most spending on the platform is in-app purchases in games or $0.99 simple apps that are cheap to produce and usually have no lasting value.
Building really good software is actually expensive. The amount of engineering and design for a serious app is already on par (and sometimes even bigger) with what it takes to build a full-featured desktop application. Back in 2000s software industry solved this issue by releasing products that cost $20–200 per license and annual upgrades with 30–60% discount from full price.
Mobile changed things a lot. Apple made a purchase, download, and installation of software a one-tap experience, removing complexity from the process. Naturally, millions of users started to purchase more software. This allowed developers to reduce prices while making revenues that became significant investments in really worthwhile apps.
Apple pushed this trend as well. Say, iWork for Mac, once sold for $129+, is available as a separate purchase of Pages, Numbers and Keynote at $19.99 each. Apple clearly showed that each application on the platform should be robust, sold for low cost and probably have a new version in 1–2 years for the same price to keep things simple for a customer. This changed the economy behind software development as well. Now developers have to care about users even more to retain them and provide good reasons to upgrade.
With iOS7 release many developers will use it as an excuse to squeeze out some extra revenue. While there is nothing wrong to charge for new software, some developers will definitely abuse the approach and release dummy updates as new applications for a separate price.
We at Readdle believe that when you ask a customer to pay for the upgrade, there should be good reason for that. It doesn’t have to do much with the iOS7 update rather it’s about the product. We would be happy to provide discounts for our existing customers, but the lack of the upgrade pricing on the AppStore is an issue. Still, Apple is clear on their vision, so we can only have workarounds like an introductory price during the first week.
To illustrate, it worked out well for our Calendars 5. More than 25% of previous version users upgraded in 72 hours, making the application #3 Top Paid app in 40+ countries on both iPad and iPhone charts. What’s more important, the feedback about the product is overwhelmingly positive. 10 months of development resulted in a good product which people are happy to pay for. And we have already started to work on free updates to make it even better.
