iPhone App Prices Inch Up

Paid apps in Apple’s iPhone App Store still cost less than they did in late December. But good news for iPhone developers: App prices stabilised — and actually increased a bit — during March, after at least two months of price declines.

Specifically, the average paid app in the top 100 cost $2.60 on March 26, up a nickel from $2.55 on Feb. 24. But that’s still down $0.55, or 17%, from Dec. 26. (To be clear, this is for paid apps only and does not take free apps into account. Raw data via AppShopper, an iPhone app directory.)

For the second month in a row, no $9.99 apps were present in the top 100 during the day of our survey. That should change eventually; Electronic Arts (ERTS) recently pledged to make several premium games for the iPhone, including FIFA soccer, Madden football, Tiger Woods golf, and The Sims, each of which we expect to launch for $9.99 (or maybe more).

What does this mean for Apple? It would be nice to provide app developers as much potential revenue as possible. But app store sales don’t have much of a direct impact on Apple’s financials. The company is running the App Store as a break-even service.

All that matters is that iPhone and iPod touch sales stay strong. And that’s where app quality — not completely matched to pricing — is most important. Good news: App quality should improve even more this summer when apps launch using the new, better iPhone 3.0 software.


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