Why Doesn’t Apple Enable Sustainable Businesses on the App Store?

Ben Thompson writes about why it’s in Apple’s interest for apps to remain free or very, very cheap:

In the case of apps, the current app store, full of a wide variety of inexpensive apps, is perfect from Apple’s perspective. It’s a reason to buy Apple hardware, and that’s all that matters. Anything that on the surface makes the store less desirable for hardware buyers – such as more expensive apps – is not in Apple’s interest.

This is a point I alluded to in my piece on the topic from about a month ago, but I wanted to call it out more explicitly. Both Thompson and I linked to a classic Joel on Software piece wherein Joel explains the strategy of commoditizing one’s complements. In the case of Apple, they’re commoditizing the apps that run on their platform. And they have succeeded spectacularly.

Thompson also includes this theory:

As I just noted, the great thing about productivity apps is that they add value, and the more you use them, the more valuable they become – the potential value of a productivity app is limited only by the amount of data you are willing to put into it.

The trouble for Apple – or any platform provider – is apps that cross that line from nice-to-have to completely irreplaceable. It’s at that point a user’s loyalty shifts from platform to app, and there are no greater examples than the aforementioned Photoshop and Microsoft Office.

He goes on to argue that Apple’s near-death experience in the 90s only reinforces the importance of maintaining independence from any one app among Apple’s leadership.

It’s been observed before that if Apple wanted to introduce App Store features that would help developers raise the prices of their apps – free trials, for example – they would have done it by now. I think that’s right. It’s been 5 years since the iOS App Store launched and 2 and a half years since the Mac App Store launched. The App Store limitations that work to keep prices low have remained in place. I don’t see that changing any time soon.