Hello App Store

The big day has come and passed. And you know what? We’re still in uncharted territory: for most of us Mac developers, the App Store is something new and strange.

Let’s start by looking at Apple’s cut in the deal. Is 30% reasonable?

My first impression was that it seemed a little high, but acceptable. You’re getting someone else to deal with the hassles of downloading, payment processing and, to some degree, promotion. There’s a lot of value in that. Look at what it costs to be on other plaforms, such as Xbox Live, and it seems fair.

But thinking through the situation a bit more, I realized that those things pale in comparison to the value of being associated with the Apple brand. Having their explicit stamp of approval and being included in the App Store will make any product more appealing to a customer. Buying directly from Apple means that your software won’t screw up their phone and that can be returned if it doesn’t live up to expectations. That, combined with the ease of a single click purchase, is going to drive a lot of sales. You’ll make up that 30% without even trying.

Update on March 13th, 2008: A reader, Philip Smith, wrote in with an interesting observation: how many developers have the ability to offer gift cards for their products? Traditionally, giving software as a gift has been a very hit or miss affair. But when friends and relatives can go down to the local grocery store and pick up a gift card for the App Store, that problem is solved. Yet another way to increase your sales with the help of Apple.

One thing that disappoints me about the iPhone SDK sign-up is that the entry fee of $99 is too low. I look at the entry fee as a way to filter out developers that aren’t fully committed to the platform. Unfortunately from what we’ve seen so far, including the load on developer.apple.com on the day of the SDK release, there’s a huge amount of interest. I fear that Apple is going to be overloaded with application reviews, issuing certificates, and other administrative tasks. A higher entry fee would lessen the chance of this becoming a bottleneck for getting my product into the system. Please charge me $499 and let move to the front of the line.

Now, let’s look at how this affects our current business and way of doing things. Even though writing applications for the iPhone is now incredibly easy, selling software is much more than just writing code. My primary concerns at this point are with the details of distribution.

Take a look at our Twitterrific product: we’d love to offer both free and paid-for versions. Will that be allowed in the App Store? There’s also the traditional “try before you buy” model that we’re used to having with our desktop applications. As a customer, I’d like to know what I’m getting before I put my money down. Will the App Store allow some kind of trial period?

As Apple builds out the App Store, I hope they take the approach that they have with the iTunes Store. Let me write an application “preview” that anyone can download freely. If they like it, the buy button makes us both happy. All I need to do in order to make this happen is provide two files to Apple: one is the software equivalent of the 30 second clip, the other is the real deal.

Anyone who’s been selling online for more than one major release knows how important upgrade fees are to the continued growth of a product. It drives new features and keeps the product life cycle moving along. Yet we’ve heard nothing about how this will be handled at the App Store. Will we be able to identify existing users and offer them discounts? Keeping existing customers happy is in my best interest and that of my new partner: Apple.

Update on March 10th, 2008: Another issue that occurred to me was how we’ll be able to offer the product at varying price points. For example, NFR licenses for reviewers, free licenses for contest prizes and discounted licenses for promotions like MacSanta. Again, I hope that Apple keeps our promotional needs in mind as they implement the App Store.

There has also been no indication on how we’ll be able to handle distribution during a beta test. There’s no way I’m going to release a major product without letting a significant number of users run a private version of the application. Can we get these pre-release versions of the product onto their phones without using the App Store? Will the App Store itself provide some special beta mechanism? Will we have to run our own App Store like large enterprises? Any guidance in this regard needs to happen soon, June will be here before we know it.

This is an exciting time to be an OS X developer. I feel confident that Apple will address some of the concerns mentioned above and we’ll all be happy campers by the time the App Store launches. Now, excuse me while I open up my new Xcode project…