Marco Arment on App Store pricing:
If you sell a low-priced app in the App Store with no free version, you make money from every tire kicker.
Even if we end up using a different app instead of yours, we still bought yours to try it out. We had to, because we couldn’t get a free trial — we paid to satisfy our curiosity of why Viticci raved about your app so much, or how a Twitter friend used your app to post that cool link, or how well you’re going to solve our most important problem right now. If the app is only a dollar or two, enough of us are OK with paying just to try it,1 even if we’re not going to end up using it every day for the next five years.
If the App Store mostly moved to higher purchase prices with trials, rather than today’s low purchase prices and no trials, this pattern would almost completely disappear. Instead, we’d get the free trials for almost everything, and then we’d only end up paying for the one that we liked best, or the cheapest one that solved the need, or maybe none of them if we didn’t need them for very long or decided that none were worth their prices.
Either the best app wins and gets all of the sales at a higher price, or every app takes home a smaller prize. Ceteris paribus, the user would spend about the same on every app category whether he/she buy seven $2 apps or one $15 app.
I’d much rather see that profit spread out between the developers in a category. The best apps will still take home more profit, but the newcomer has a chance to make money in the store and keep innovating on his/her creation. By dividing our App Store spending, we enable competition.
Before I read Marco’s article, I was a blind advocate of App Store trials. Now I’m thinking the exact opposite. But please oh please, bring on the upgrade pricing.