“Why can’t all iPhone apps be free? Well, quite simply, because people are still willing to pay for them. Apple currently generates most of its revenue from up-front sales — whether it’s for MacBooks, iTunes or iPhones. And the pay approach for mobile games, ring tones and videos has long been used by other tech purveyors… ‘It is a historical business model,’ notes Kevin Burden of ABI Research. Buyers are willing to pony up, though, because of the cachet of the Apple brand,” Anita Hamilton writes for Time Magazine.
“Charging up-front for applications also gives Apple an edge with developers. “Part of getting developers to focus on your platform is making sure they will make money off of it,” says Burden. While this arrangement forces consumers to shell out for programs they may use only once, the economics of the iPhone App Store are much more attractive for developers. Normally, wireless carriers control the pricing and selection of the apps available for their handsets, paying developers no more than 40% of the proceeds. Apple, on the other hand, will give app makers 70% of all sales,” Hamilton writes.
“Few companies have figured out how to turn a profit by relying solely on mobile ads for revenue. Mobile marketing brought in less than $500 million in the U.S. in 2007; compare that to online advertising, which made $21 billion. For many developers, it’s just not worth the risk,” Hamilton writes.
Hamilton writes, “If Apple ever did decide to let all iPhone apps be free, it would be a radical departure from its typical way of doing business.”
Full article here.
Before you bang something out for Time Magazine (and before you slap it online or on paper, Time) shouldn’t you at least attempt to understand what you’re writing about? It’s simply not within Apple’s purview to decide if other companies apps are for-pay, ad-supported, or just totally freeware. Apple cannot “decide to let all iPhone apps be free.” Unless they’re going to buy out every developer in the world first. Obviously, that’d be quite impractical. Developers already have the choice to pursue the business model they feel will work best for their app.
Why can’t all Time issues be free? That’s right, no one would read them anyway.
“Why can’t all iPhone apps be free? Well, quite simply, because people are still willing to pay for them.”
What a surprise that there are some people left willing to accept the concept that a person’s time, talent and product should be paid for.
In the mind of the typical Time Mag writer, all things should be free.
I guess two of my favorite axioms still hold true.
Time = Money
Time is meaningless
“And also, you should win things by watching!”
Next they will be wanting “free” health care
How come it never occurred to Anita Hamilton to ask the same question about PC apps, or operating systems?
In fact, why can’t everything be free?
Why can’t all iPhones be free? Well, quite simply, because people are still willing to pay for them.
Or, could it just be that things cost something to produce? Or, given that other things do cost money, people making their own things want to make some money to buy things they aren’t making? Yes, it would be nice if everything was free. But this article was just a waste of time.
for a magazine that’s bleeding like Kate Hepburn doing needlepoint, Time sure has a lot to say about Apple’s business model
Us programmers have to eat!
… because as a software developer, I like to get paid for my work. It appears that the iTunes Store model probably does not support shareware – Apple letting the user download for free, and then sending money to the developer. Apple has costs, and wants to be compensated.
The first two paragraphs imply that the majority of iPhone apps will cost $9.99 while only a few will be free. With the App Store unopened how does one know the ratio of free to paid apps?
And what if $9.99 tends to be the upper end for paid apps while most go for $1.99?
Developers can choose the price they want to sell their product based on market demand. If your paid app doesn’t sell very well then you lower the price. If you want it to be free then it’s free. Seems like a pretty good arrangement to me. Some people, myself included, would rather pay money for an ad-free mobile experience and that’s why I want nothing to do with Android if they take that route.
Anita, you are an idiot.
In case you read this:
id•i•ot
noun informal
a stupid person.
what did i read? There may be some 4,000 – FOUR THOUSAND APPS when the AppStore launches? If that’s even close to the truth, it’s outstanding.
You poor babies…. Everything should be free and open source….
“Why can’t all iPhone apps be free?”
Seriously! Does it need to be asked?
Why can’t all media be free of adverts? Now that would be news.
Now that’s just stupid.
While we’re on the subject, why can’t all music and video be free? Or cars? Or homes? Or food?
Hell, I’m tired of paying for everything! Why can’t it all be free?
Welcome to the world of economics.
why can’t I be paid to use apps?
I mean come on get with it.
grok,
I almost shit myself when I read your post. Thanks for the 5:00 pm-leaving work laugh.
Now, back to the article.
This guy is a fool! Has he written a similar article about Crackberry’s? Likely not. Also, the VAST majority of apps for the iPhone will be free.
I read somewhere that Bill Gates will send us a check for all our iPhone apps! Hmmmm… where did I put that e-mail?
<b>’It is a historical business model’ <b>
It certainly is. Providing a product of value in exchange for currency. Historic. When will companies like Microsoft, Nintendo, Sony and Apple do away with this ridiculous practice and start ensuring all software for their platforms is available free of charge to everyone?
I’m glad someone was smart enough to bring this up…
@grok,
Thanks for the great post – what a visual!
wow, this is one of the dumbest and worst thought out propositions i’ve ever read . . .
While we’re at it, let’s make gas free, food free, and clothing free too . . . why?? just because it’s a departure from the historical business model and gas, food, and clothes would just fly off the shelves . . .
Idiot
“Buyers are willing to pony up, though, because of the cachet of the Apple brand”
This is why Apple will continue to baffle the rest of the industry, which consistently puts affect before the cause. Apple’s brand has cachet because people know from experience that what they’re selling is worth something. You can’t create that with advertising, and it would disappear quickly if Apple were to charge good money for lousy products. As long as the rest of the industry thinks that Apple’s success comes from marketing tricks, Apple is in no danger of running into stiff competition.