November 14, 2011
Oliver Reichenstein, the founder and interface designer of the iA Writer app for iPad, has a problem. No matter what price his company charges for its app or Mac application, they make the same amount of money. Things have gotten so bad, in fact, that Reichenstein recently asked – Is The App Store Rigged? Under the headline, “Revenue = X” via Google+, the Information Architects founder explains that his company recently lowered the price of its iPad app from $4.99 to just $.99. However, while the lower price did lead to a significant sales spike, it didn’t last. In fact, the end result was “by cutting the price by factor 5, I am selling exactly 5 x more apps.” The same issue was also experienced when the price of iA Writer for Mac went from $10 to $5 and from $17.50 to $10.
What I expected was that at a certain point the price change would impact the sales profit positively or negatively but it never did.Reichenstein, who doesn’t actually believe the App Store is rigged, has concluded that price decreases bring with it factors of growth. These include: “support costs, the probability of super rare bugs and negative comments (not just on the App Store.)” Therefore, he's concluded that other than it allowing more people to purchase his apps, lowering the price ultimately is not “a recipe to increase revenue but to inflate your app.” Interesting story, don’t you think? Have any of our readers who also happen to be developers experienced something similar? Let us know by using the comments below. In the meantime, iA Writer app for iPad ($.99) and iA Writer for Mac ($4.99) are both available now…at a lower price.