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Besides its precipitous fall towards “free,” software pricing in the App Store is starting to settle around a few distinct tiers. Instead of being based around the app’s function, though, pricing is often determined by the device for which the app was made. The smallest screen sizes warrant the lowest prices, with the average rising with every jump to a larger display.

The clearest example of this concept is OmniFocus, a productivity app that costs $20 on the iPhone, $40 on the iPad, and $80 on the Mac. This pricing policy makes sense at first glance. The increased display sizes of the iPad and the Mac could allow for more features than the comparatively cramped display on the iPhone — since it makes little sense to charge the same amount for a less capable product, the current system appears to be the best choice.

But the iPhone app isn’t less capable than its larger counterparts. It better supports location-based features, was the first to be updated for iOS 7, and is probably used more often than the other apps. (It’s easier to use a task list on a device in your pocket than it is to use one on the computer sitting on your desk at home.) And the iPad app is often considered the best version of the app because of its ease of use and, previously, access to exclusive features. Saying that these apps should have different prices has little to do with the apps’ functionality and everything to do with App Store economics.

That’s easy enough to understand. But then there are fickle consumers who wish to use an app across all of their devices — or at least on both their iPhone and iPad — and would prefer to purchase a single, universal app. Apple has popularized this approach with its own applications, many of which are available on both platforms without extra cost. (Or, since the company refreshed many of its apps, for free.) So how do you price an app that can be used on both the iPhone and the iPad?

The obvious answer is to release a universal app and price it somewhere between the typical cost of an iPhone and iPad app. That approach isn’t without its own problems, though. Consumers are capricious creatures, and apps meant to please everyone can sometimes end up pleasing no one.

Realmac Software recently encountered those problems with Clear, its to-do list app. The company released an iPad version of the app as a universal download that also improved the experience on the iPhone. Because the app was new and added support for a new device, the company asked customers to re-purchase Clear in its new form. Consumers’ reactions were harsh and swift. Realmac Software backpedaled and re-introduced the original app.

“As a small team, the backlash to the disappearance of Clear for iPhone has been incredibly tough,” Realmac Software founder Dan Counsell says in a blog post. (The company declined to comment for this article.) “We’ve been working incredibly hard on Clear for iPad, and simply wanted to offer it in a way that was both sustainable for the team that builds it, and desired by users.”

The issue of sustainability is becoming more important to independent developers. These companies and individuals devote months of their lives to making apps that they then sell to consumers. Adding new features, supporting updates to the operating systems on which these apps run, and fixing bugs requires time and money. An improperly priced app can mean the difference between a successful launch and consumer backlash.

“The universal binary problem is, you anchor the price somewhere between too low and too high and everyone loses,” says Flexibits‘ Michael Simmons. “As a consumer I’d love to have everything be universal and cost five dollars. But at the end of the day, especially if you’re making productivity software, you want a fair price for the stuff that you’ve taken the time to develop.”

Pricing software by screen size contributes to this problem. The App Store’s pricing practices reward those who release software for free or for incredibly cheap — but the idea that a developer should charge less for an app simply because it’s on the iPhone instead of the iPad is simplistic at best. Even toddlers understand that putting something into a different container doesn’t affect the amount or quality of the thing. (Toddlers of a certain age, anyway.)

Yet this practice doesn’t show any signs of disappearing. It might even spread: DreamWorks CEO Jeffrey Katzenberg said in February that, in the future, consumers will pay for content “by the square inch.” In this future, videos would resemble apps and cost more depending on the device used to view them, effectively turning online stores like iTunes into software marketplaces like the App Store.

These practices sound suspiciously similar to the idea that Internet providers might charge their customers based on which websites they access. That idea has been met with opposition at practically every turn, so why does it make any more sense to charge someone more for accessing something, whether it’s an app, a game, or a video, on one display over another?

This isn’t a rhetorical issue — answering this question and figuring out how developers can release software without catching flack from customers who don’t want to “over-pay” for software they’re never going to use.

[Image courtesy Thinkstock]