Anchored to the Bottom: Hypothesizing the Root Cause of Low App Store Pricing

There’s a race to the bottom for prices on the App Store, and many developers (myself included) don’t like it. Some developers wonder if Apple could have stopped it. Others think the free and paid apps are different markets. Despite my respect for Charles, Daniel and Joe (with whom I’ve been arguing about this on twitter) I don’t think so.

The cause (I believe) of the race to the bottom is the existence of so many popular, quality, free apps, built largely with VC money. When users are given, free of charge, quality apps that took hundreds of thousands (or millions) of dollars to develop, it skews their perceptions of what apps should cost, and that in turn pushes down the price the market will bear.

Published at January 31, 2015 ·  3 min read