Monday, September 30, 2013

App Store Pricing: Worth at Least as Much as a Cup of Coffee

I read an article this morning on Hacker News suggesting that most apps are worth less than a cup of coffee. In it, Florian Kugler says this, emphasis mine:
Another approach – and I would argue a more insightful one – is to learn about the nature of the market we're working in. And not only about the market as an abstract whole, but about the value of our products specifically. The economic reality is that most apps offer next to no value to people. They might say otherwise when asked about, but their actions speak pretty clearly: A cup of coffee is worth more than almost every app on the store.
I disagree. I might be a bit biased, but I think there are a lot of apps on the store worth significantly more than a cup of coffee. That being said, I also don't think that a cup of coffee is worth the price of a cup of coffee. Perhaps the fact that I think the price people pay for coffee is absurd plays into my feelings here.

The real point here isn't the price of coffee though. It isn't whether apps are worth more or less than a cup of coffee. The question is whether or not apps are providing value to people and how willing people are to pay for that value. It's easy to say "people don't pay for apps" or "most apps are crap not worth a cup of coffee." Kugler goes on to say:
That's a hard pill to swallow, but we should let it sink in. We pour all our creativity, time, and passion into creating basically worthless products. 
Finishing with: 
But we should be aware of the fact that we're in the business of creating products which offer very little value to people. It's our choice if that's what we want to pursue. 
I really don't think this is true. The thousands of reviews I have on my apps telling me how much they like my apps leads me to believe this isn't true. It's easy to cherry pick bad reviews or the trolls out there that complain about your $0.99 app being overpriced. When I get notes and emails from people telling me that my debt snowball or budgeting app helped them change their finances I get the feeling they received more than a cup of coffee worth of value. When people tell me they've used my biking app to track hundreds or thousands of miles of exercise, I suspect they've gotten some value out of my work. To the discussion at hand, when I get paid each month (more than I did at my day job) I have a good idea that some people are finding value from the things I've made.

Finally, just as an interesting side note I thought I'd look up how much Starbucks really does make. According to Yahoo Finance, Starbucks has made $7.5 billion in the last year. In June, Apple said that they have paid developers $10 billion total, and $5 billion in the last year. If you add in advertising as well as Android profits, I suspect that app sales are roughly on par with coffee sales (at Starbucks, let's be honest that's what we are talking about with "price of a cup of coffee"). App sales are also growing at a pretty fast rate. I suspect we will surpass "coffee" sales next year. Don't let anyone fool you. Apps are most definitely not worthless.

Discussion on Hacker News

If you've read this far and are interested in the mobile app market you may want to check out my book on how I make money on the mobile app stores called Building an App Business.

Wednesday, September 18, 2013

iOS App Store Ratings Change

Update: Apparently this is a temporary change, and Apple is playing with this. On iOS 7 currently it is showing the number of reviews for this version, and for apps with less than 5 reviews it is not showing any star rating at all. That is an interesting change as well. I have apps with hundreds of reviews that are showing as if they don't have any currently because of recent updates.

The app stores and any changes that happen on them are very important to me for obvious reasons. I make a living on them so I try to keep up with them. Yesterday I noticed a new change regarding how ratings display on the store. I don't know if Apple is testing a change, or if it is permanent, but currently there ratings are being displayed for all versions instead of for the current version.

Generally, when you are looking through search results, the star rating and the number of reviews is from the current version of the app. With a new update, the reviews would generally revert to total reviews until the app reached 5 reviews for the current version.

Currently, the store seems to be showing the rating and number of reviews for all versions no matter what. This is an interesting change for several reasons. First, if you accidentally release a version with a bug or a bad design decision, it is going to be really hard to overcome. Before you just had to fix your mistake and hopefully get some good reviews on the next update.

On the other hand, it created a scenario where developers were incentivized to not update their apps. If I have an app with a few hundred reviews rated 4.5 stars I don't want to update that. The difference between seeing 175 reviews next to your app and 5 next to it is huge. Starting over has an impact on sales and it can be rough.

Overall I think this is a good change. There should never be an incentive for devs to not update their apps and make them better.

Discuss on Hacker News

Wednesday, September 11, 2013

Sensor Tower Review (App Store Optimization)

Sensor Tower is an App Store Optimization platform that I use to help find the best keywords for my apps. Search has always been a huge part of app sales, but with the iOS 6 app store changes it is even more important. It is also significantly harder. Before, users got a page of apps with each search and it just took a good icon to stand out. Getting in the top 5 was enough to get you good visibility, and getting in the top 25 wasn't a terrible outcome.

Now, the search results only show 1 app at a time, and you have to swipe each time you want another app. I suspect people rarely get to 25 before making a decision now, and being 5th is much less exciting than it used to be.

There are a few things that you need to know when working with your keywords that Sensor Tower helps out with. You want to know how much traffic the keyword gets, how hard it is to rank for that keyword, and what your rank is for it.

This is a screenshot for some of the keywords for an app of mine (Walk Tracker). It lets me know which keywords have more traffic, and how hard they are to rank for. GPS and jogging get a lot of traffic but they have significantly more competition. Walk tracker is much easier to rank for, and because it is in my title I happen to rank pretty high for it.

Part of what this shows is that I need to work on some of my keywords and/or focus more on the long tail. I don't rank very highly for gps or fitness, but I'm #5 for "gps fitness tracker". You can use this tool to find keywords and phrases that get decent traffic but that are easier to rank for. Optimizing this is really key. I've had keyword changes in the past that meant huge spikes in revenue for me. Getting visibility on the store is huge.

If you are having trouble coming up with keywords, Sensor Tower also gives you the ability to spy on your competitors likely keywords as well as offer suggestions to optimize your keywords.

I'm not entirely convinced this service is something that you need to pay for forever for each app, but it is definitely something worthwhile to use when launching and updating your apps until you are happy with your keywords and doing well on the store. There is certainly value in tracking your rankings over time and comparing them to your revenue though.

Wednesday, September 4, 2013

Why Your Smartwatch Sucks

I have been interested in the idea of so called smartwatches for awhile now. It seems like it is an interesting idea, though I'm still not sure if I'll ever get one. I was really interested to see what Samsung would release today with it's Galaxy Gear. Unfortunately, I am yet again disappointed.

The reason? It's not a smartwatch. It's a dumbwatch. It pretty much doesn't do anything unless it has a smartphone next to it. It's an external monitor for you phone. As if that isn't bad enough, it currently only works with 1 phone and a tablet.

I've heard suggestions that perhaps some features of a phone could be more convenient in watch form just as some things are more pleasant on phones and tablets than on desktops. It wasn't a replacement, rather a supplement. I could get behind that, but if it can't do anything on it's own, without the phone, it loses like 99.5% of it's appeal. If your phone or tablet had to be tethered to a laptop or desktop, it would be useless.

I'd think a huge part of the appeal of a smartwatch would be the fitness stuff. I know my wife doesn't really like using her phone because it is too big for running. She likes her Garmin watch better. If you have to take a 5.7 inch phone with you, what good is the watch? Sure there is a slight bonus to just putting a phone in your pocket instead of on your arm and using the watch to check stuff, but man it feels like this is missing the point.

I don't need an external monitor for my phone. Perhaps checking emails or texts on the watch might be ok, but I suspect the screen is going to be too small to really enjoy that. Replying is generally a pretty important part of texts and emails, and I'm certain I don't want to do that on a watch. The watch has to do something on it's own without the phone. If it doesn't, it's going to be a really hard sell for most people I think. I might be interested in your smartwatch. Good luck trying to sell me on your dumbwatch.

If you've read this far and are interested in the mobile app market you may want to check out my book on how I make money on the mobile app stores called Building an App Business.