Microsoft’s Risky Windows Phone Gamble: Support Higher App Prices

I remember back when a $9.99 app for Windows Mobile was considered cheap and mobile app price norms were between $14.99 and $24.99. A $39.99 app would give pause for thought before purchase. But, it was not considered unreasonably expensive. Those accepted norms disappeared soon after Apple opened its iPhone app store in the summer of 2008. The mental baseline price for iPhone apps is somewhere between free and $1.99. For Android users, the baseline is simply free. Microsoft, however, has other ideas for app prices for its Windows Phone 7 platform.

Microsoft Supports Higher App Prices for Windows Phone 7 (Bloomberg)

Bloomberg quotes Microsoft’s Brandon Watson, Director of an apps developer program, as saying: I’d rather developers sell fewer than a million downloads and get to a million dollars. While this makes sense from a simple arithmetic point of view, I wonder if it makes sense in the real world market point of view. A person with a self-imposed budget of, let’s say, $20 per month for apps can buy 10 to 20 iPhone or iPad apps in a month. However, if Windows Phone apps have an average base price of $4.99, that same person can only sample 4 apps in a month. And, the limited ability to sample may push down the number of apps bought per month and drive the actual ceiling budget down. This is an extremely risky gamble on Microsoft’s part. They may actually depress the total app market instead of raise the total revenue for Windows Phone app developers.

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