One of the most common questions from new iPhone developers releasing their first application is what price they should sell their application for. Well, my answer is simple: go big or go free.
And here’s why.
If you decide to sell your application, I don’t believe $0.99 is the best price in most cases. Usually, the $0.99 applications are perceived as being simple, not very well done and cheap-looking. Users will question how much time and effort was really put into such a cheap app. Once the user has passed the invisible barrier between free and paid, the difference between $0.99 and $1.99 isn’t a major one for them, but it could be a significant difference for you, the developer.
While going from $0.99 to free may mean going from 100 sales/day to 5,000 downloads/day, going from $1.99 to $0.99 may increase your sales as little as 10%. So, if your app is currently priced at $1.99 and you average 100 sales/day, if you were to go from $1.99 to $0.99 you would earn $77/day instead of $140/day (after Apple has deducted their commission). And, if your application isn’t
crappy of poor quality, don’t be afraid to charge even more, you would be surprised by how much money you could be missing out on by not doing it. Don’t get me wrong, I have a few $0.99 applications myself, but it’s because I don’t think they are worth more than that or because that’s the price tag people are generally expecting for those kind of applications.
On the other hand, free applications, if well marketed, can pull huge numbers. My application iShotty was downloaded about 80,000 times because it was free and didn’t cost a dime to try it out; there was no risk involved. Keep in mind that free applications with a good retainer rate can generate significant income from ads.
So, if you want to distribute a very cheap application, give it away for free, and find different revenue streams for it. Otherwise, don’t be afraid to charge what your iPhone app is really worth.