14th
Commoditize your complements
I’m not a programmer/software engineer, but I can’t imagine that the same amount of work went into writing the code for iA Writer than did the code for Pages. I know. I know. It’s not fair to compare them. Oranges and Apples. Different resources, vastly different sales volume & demand, etc. Completely different playing fields.
But seriously? $20 for an app that is basically a scaled down version of TextEdit vs $20 for an app that is a genuinely good word processor and page layout tool? Can anyone explain to me how that makes any sense?
You can’t compare the price of Pages with that of iA Writer directly, because the two pricing strategies have vastly different goals. Information Architects (the company that makes Writer) is trying to profit from the sale of software. Apple, however, is trying to profit from the sale of hardware. Software is a complement of hardware, and in any market, one of the best ways to make more money is to commoditize your complements.
Every product in the marketplace has substitutes and complements. A substitute is another product you might buy if the first product is too expensive. Chicken is a substitute for beef. If you’re a chicken farmer and the price of beef goes up, the people will want more chicken, and you will sell more.
A complement is a product that you usually buy together with another product. Gas and cars are complements. Computer hardware is a classic complement of computer operating systems. And babysitters are a complement of dinner at fine restaurants. In a small town, when the local five star restaurant has a two-for-one Valentine’s day special, the local babysitters double their rates. (Actually, the nine-year-olds get roped into early service.)
All else being equal, demand for a product increases when the prices of its complements decrease.
Apple is trying to commoditize iOS and Mac software to increase sales of iOS and Mac hardware. Just about every decision they’ve made regarding the design and management of the App Store, when viewed through that lens, suddenly makes sense. But it’s very bad for developers, and ultimately for users who want to be able to buy quality software, if the only viable App Store strategy is to build inexpensive, shallow toy apps, price them at $0.99, and hope for a smash hit.
I don’t want the App Store to become an Angry Doodle Ninja wasteland, and I suspect you don’t either. So let’s kill this meme that software priced lower than a large pizza is somehow “expensive,” and let’s not fall into the trap of comparing third-party apps to Apple apps based on price. Apple is playing a different game.
Update: Information Architects responds.
