Go big or go free: how to price your iPhone application
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.
Related posts:
Analytic tools for your iPhone application sales
Free Codes for the US State Nicknames app
iPhone Application Sketch Book Review
How to build an iPhone application in 20 minutes
What will change with the new App Store?
Tags: Apple, Applications, iPhone application, Making money
This entry was posted on Tuesday, September 1st, 2009 at 9:30 am and is filed under iPhone. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
2 precious comments to “Go big or go free: how to price your iPhone application”
C'mon, speak up!
you can always do an introductory promo with a limited number of downloads, say to first 500 people, building the inherent value and desire factors via social media/pr. Then release the app for a fee, ideally with a new, extra feature.
In the future I think in app marketing is going to play a huge part in profits for developers. With so many free apps in the iTunes store its really hard to convince users to purchase your app, when they have never used it.