John Debay

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.

I just finished listening to the pre-WWDC episodes of The Talk Show and ATP and wanted to share a few of my own thoughts on what I think Apple will and should announce in iOS 7¹ on Monday morning.

First, I think the hardware will be related to the little bit that has leaked. That means new, Haswell-based Retina MacBook Pros, probably a bump to the non-retina side of the lineup, and a MacBook Air refresh. A while ago I thought we’d get a new Mac Pro too, but there haven’t been any leaks along those lines, and hardware almost always leaks. So now I don’t think Mac Pros will be part of the presentation.² There will be no iOS hardware at all.

With respect to iOS 7, it’s much harder to guess. The rumors have been swirling for months that some kind of visual overhaul is in the offing, and it’s rare that there’s that much smoke but no fire. However, I don’t think a visual overhaul should be the most important component of iOS 7 (I said should be, not will be). It’s mainly journalists and other techies who live and breathe mobile operating systems that are “bored” with the look and feel of iOS. I don’t think regular users of iOS are bored. My mom or my sister aren’t looking at, say, Mail in iOS and thinking “Wow, I wish they’d just tone down these gradients.” Of course regular people do enjoy and can appreciate visual refreshes, and do subconsciously register visual elegance even if they can’t articulate it. I’m not saying that a visual refresh has no value. I just think it has less value than addressing some of the other deficiencies in iOS.

iOS is a very young platform. The Mac has had, cumulatively, 29 years of iterative refinement to arrive at where it is. iOS has been around for 6 years, and on the iPad it’s been around for only 3. There is a lot that can be done in terms of refining and improving workflows.

Here’s an example from my daily life. I used to host this blog on Tumblr. Tumblr has a nice bookmarklet that will let you post the page you’re viewing to your blog. It tries to be smart about guessing content types, meaning that if you have text highlighted, it pre-populates the form fields for a quote post. If you’re viewing a page on Flickr or YouTube, it pre-populates the post fields for a photo or video post, respectively. I’ve used this bookmarklet on my Mac almost daily since I joined Tumblr in 2008. It’s simple and fast and works great.

What if you want to do the same on iOS? I’m often reading on my iPad at night and would like to post the page I’m reading. I have the bookmarklet installed on Safari, and I have iCloud bookmark sync on, so I can make it work almost as easily as it does on my Mac.

What if I didn’t have the bookmarketl? Let’s consider creating a quote post using the iPad Tumblr app. First I copy the URL to the clipboard, then I switch to the Tumblr app and create a draft quote post and paste the URL. I switch back to Safari and copy the text I want to quote, then switch back to the Tumblr app to paste the text. I then switch back to Safari again so I can copy the page title, because I want the attribution to be correct. I switch back to Tumblr and paste it into my post. Now I can actually add my own text from the Tumblr app’s post editor. I’ve switched back and forth between Safari and Tumblr 5 or 6 times by the time this is all done. It’s incredibly tedious, so tedious that if I didn’t have the bookmarkelt in Safari I doubt I’d ever bother to make a post on iOS. I’d just email myself the link and do it later from my Mac.

Consider another scenario, using only Apple’s built-in apps. I’m reading a website on Safari, and I get an iMessage. I see the notification at the top of the page, tap it, and I’m dropped into the conversation. Great. I type my reply and hit send. Now what? I have to switch back to Safari, which can be done in one of three ways. One option is to hit the home button, then tap Safari, potentially needing to swipe between home screens in the process. This is what 99.5% of iOS users do. The second option is to double-tap the home button and use the application switcher. This is what 0.44% of iOS users do. Or, if I have multitasking gestures turned on, I can use a four-finger swipe to swtich. This is what .01% of iOS users do.³ Regardless of method used, the process is slow. If you’re having a conversation, and iMessages are coming in with any frequency, you’re doing this over and over and it quickly becomes frustrating.

Consider a third scenario: you want to use Photo Stream, but you have no idea what Photo Stream is⁴. Or you have some photos synced onto your iPhone or iPad, and you’d like to use iPhoto on iOS to edit them. You do so, but then those photos are synced off your device. Why can’t you see them in iPhoto? What happened to your edits? Who knows? Or maybe you made a project in iMovie for iOS, and you want to get the video off. You can… email it to yourself.

To me, all of these rough corners are the result of having a brand new operating system with completely new modes of working that simply hasn’t yet had an opportunity to address every single use case that Macs and PCs, with their 30 years of development behind them, support today. If I’m Tim Cook and I have engineers who can spend time fixing one of these workflows or can focus on visual changes, but not both, I would pick the former every day of the week and twice on Sunday. I think an iOS 7 whose main tentpole feature is a new coat of paint but that addresses neither some of the longstanding workflow issues nor some of the broken mental model issues with sync and iCloud is getting the priorities wrong.

More data reinforcing the fact that in today’s economy, a college education is the smartest money you can spend:

The so-called college wage premium – economists’ fancy way of saying how much more workers with a college degree are paid than other workers without one – has widened over the last three decades. Degree-holders earn more than 80 percent more than their peers with just a high school diploma, up from about 40 percent more as of the late 1970s.

And:

The rate of return on that investment in school “exceeds the historical return on practically any conventional investment, including stocks, bonds, and real estate,” find the scholars, Adam Looney and Michael Greenstone, who also is a professor at the Massachusetts Institute of Technology.

Via David Leonhardt.

Lex Friedman revisits the well-worn territory of the “race to the bottom” in App Store pricing:

I’m neither an economist nor a psychologist, but it strikes me that too many iOS device owners fail to act in their own best interests—both in the immediate near term and in the long term—when they scoff at the thought of spending money in the App Store. Here’s how customers who spend lavishly on iOS hardware punish themselves by skimping on apps.

Customers aren’t to blame for low App Store prices. They’re simply responding to basic supply and demand economics. There are over 700,000 apps in the App Store. There is just no way most people are going to pay $5 for an app when there are tens, and possibly hundreds, of acceptable free or very cheap alternatives. And Apple wants it this way.

The reality of the App Store is that it’s a hit-driven marketplace, and in that way closely resembles the mainstream music or movie markets. For every Lady Gaga, there are hundreds of struggling indie bands. For every Angry Birds, there are thousands of games priced just as cheaply as Angry Birds that go nowhere.

Steve Jobs himself addressed this topic broadly at the D8 conference in 2010. When asked about the pricing of ebooks, he discussed Apple’s general strategy for pricing digital content this way: “Price it aggressively and go for volume.” He went on to say that whenever Apple hasn’t followed that approach, they’ve seen more “attenuated success.”

Further, when iAd was launched, Jobs pitched it as a way to help developers make money despite the realities of selling mostly free or extremely cheap apps:

A lot of those apps are free, and the rest of them are really reasonably priced. We’ve got apps for free, for $.99, for $1.99. And we like that. Users like that. But these developers have to find a way to make some money, and we’d like to help them.

Doesn’t get much more explicit than that.

Given the extraordinary supply of iOS apps, and given that Apple prefers that the vast majority of apps be free or extremely cheap, no amount of complaining is going to drive prices up. Low prices are here to stay.

Chris Dixon:

Fans of Apple and Google have been arguing lately about which company is winning mobile. Apple has more profits, but Android has more users. But what really matters is when and if developers switch over to developing for Android first, or even Android only. For now, iOS users tend to monetize much better than Android users, more than making up for the smaller user base. (Emphasis mine.)

I couldn’t agree with this more. I often see Apple people citing profit share as a primary defense against people who claim Google is “winning” at mobile. But what matters isn’t how much profit Apple makes. It’s how much “mind share” they continue to hold with developers, and developers don’t give a shit about Apple’s profits. Right now most developers perceive iOS to be the platform where it’s easiest to build the best looking apps, where it’s easiest to make money or gain traction with users, and where it’s fastest to build and ship an app. As long as that remains true, I’ll consider Apple to be “winning.”

The switch to Android first hasn’t happened yet, but at least based on conversations I’ve had with entrepreneurs, it seems likely to happen in the next year or two.

I have no idea if this is true or not, but if it is, this is what I’d worry about if I were running Apple.

[An interesting and thoughtful set of observations] about Google Glass from Dustin Curtis. The overall impression is one that confirms my guess that it will never be a mainstream product. Especially:

If you don’t say “ok glass” within a very short amount of time–way too short, I think–it turns back off. This led me to be constantly nodding my head up and down while saying “ok glass” over and over with my eyes pointing up and to the right. Someone watching commented that it looked like I was having a seizure.

and:

All fashion issues aside–and there are many, of course, because the device looks kind of ridiculous to the uninitiated–it is extremely unnerving to be conversing with someone who has a camera and microphone on their face, pointed directly at you, with the ability to record. In the presence of someone wearing Glass, you can never have privacy. I had anticipated a feeling of uneasiness, but after experiencing it, I am surprised by how much it bothered me on a visceral level.

If Apple does indeed intend to build a watch as its first foray into “wearables”, it’s a much more natural formfactor. You don’t feel stupid wearing it, as you would a computer that has to be strapped ot your face, and integrating a quality color display is much more straightforward. The most important question by far is what can the software do? Is it a standalone device, or must it be tethered to a smartphone, like Glass? If the former, can it completely replace a smartphone? If the latter, what’s the value proposition for someone who already has a smartphone and doesn’t feel like pulling it out of his pocket a significant burden?