Why App Stores Need Upgrade Pricing
By
Staten Island, NY Posted: 12/4/2015 1:00:00 AM
Why Upgrade Pricing is important to the future of App Stores.
When Apple introduced the App Store for the iPhone, it change the way people buy software. Before App Stores, only a handful of software companies had the resources to get distribution into brick and mortar stores. Although they could sell their Apps through online sites, it wasn't easy for customers to even know they existed.
The App Store was groundbreaking because even an independent developer could earn millions of dollars by reaching customers from around the world. Apple made the entire process completely seamless. All a developer has to do is write the program, decide on a price, and submit it to the App Store. Once it's accepted, Apple takes care of everything. They collect the money, make it easy to download and install, then pay the developers 70% of the proceeds.
The trouble is, App Stores don't have an option for developers to sell upgrades. All upgrades are free. While this may not sound like a problem, for some developers, it's a deal breaker.
Since developers can't earn money on upgrades, they have a choice. They can continue to make the upgrades free and hope there's enough new customers to make it worthwhile to work on new features, or they have to release the upgrades as a new (full priced) program. For example, if you made an App called "Widget Designer", you can call the next version "Widget Designer 2.0", then sell the upgrade as an entirely new program. The problem with that is their original customers don't get a discount, so they have to pay full price... not to mention that the App Store will have both versions listed for sale.
For mobile devices, developers don't have a choice; they can only sell Apps through App Stores, but a lot of Apps designed for Desktop computers are not available in App Stores because the developers rely on upgrades for a large portion of their revenue. I think that's a real shame, because App Stores are the best way to sell and distribute software. It's safer and easier for consumers, plus it has the ability to reach more customers than any other distribution method.
Joe Crescenzi, Founder
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