But that doesn’t mean all is well in the App Store.
In fact, the business model that nurtured its success now threatens to choke off the programming talent that sustained it.
The bar graph was posted Nov. 30 by Edible Apple, a few days before the App Store hit the 10,000 mark. It shows the distribution of prices — from $0 to $49.99 — for the bulk of available applications (it leaves off the 30 or so apps that cost more than $50).
Note the preponderance of free and $0.99 apps.
Which leads us to that “Dear Steve” letter. It was written by Craig Hockenberry, a veteran programmer who jumped into iPhone development on Day 1. His company, Iconfactory, has produced several products and two iPhone hits: Frenzic and Twitterrific.
The sticking point, as Hockenberry sees it, is that spike by Edible Apple’s graph: the proliferation of 99-cent applications — what he dubs “ringtone apps” — as developers reduce their prices to the lowest possible level in order to get favorable placement in iTunes.
What’s causing this “rush to the 99¢ price point,” according to Hockenberry, is the way the App Store displays its products, which results in most iPhone owners buying them sight unseen:
To illustrate his dilemma, Hockenberry spells out — in revealing detail — what it costs him to develop an app:
What should Apple (AAPL) do about the ringtone problem? Hockenberry doesn’t offer Jobs a solution. (“You and your team are perfectly capable of dealing with it on your own terms,” he says.) But he warns that pricing issues are choking off innovation and could prevent development of an app that could do for the iPhone what the spreadsheet did for the Apple II or desktop publishing did for the Mac.
To read Hockenberry’s letter in full, click here.
For another take on the issue, see How to prevent the App Store from becoming the Crap Store by John Casasanta and Phill Ryu. They’re the creators of the Classics book reader, which, after a price reduction from $2.99 price to 99¢, climbed the charts to No. 4 on iTunes.
Below the fold: A pie chart from Edible Apple showing the distribution of iPhone apps by category. Note the preponderance of games and entertainments and the paucity of, say, social networking apps.