Software hasn't gone rabid -- on the desktop, anyway

By Nathaniel Mott , written on April 2, 2013

From The News Desk


Last summer I argued that the app business had "gone rabid" after Apple released OS X Mountain Lion, the latest version of its desktop operating system, for just $20. Apple was setting precedent and perpetuating consumers' expectations that software should either be free or cheap, I argued, and I was concerned that the trend would only worsen as time went on.

A series of blog posts from Michael Jurewitz analyzing the economics of the Mac App Store show that I was wrong -- on the desktop, anyway.

On the Mac App Store, the Top Grossing applications -- the ones dealing in money rather than downloads -- are largely paid-for; just three applications in the top 50 are free. Jurewitz writes that the Top Grossing applications also cost more than applications on the Top Paid list by 294 percent. Shocking as it may sound, Mac developers make money by charging their customers for the software they use.

Neither the iPad nor the iPhone come close to the Mac in terms of paid-for applications. 44 of the top 50 applications (again, in the Top Grossing list) on the iPhone App Store are free; 46 are on the iPad App Store. Here's what that looks like charted out:


There's a large discrepancy between the number of games in the top 50 apps on the Mac App Store versus the iPad and iPhone App Stores. As of earlier today, 35 of non-games were represented on the Mac App Store's top 50 grossing applications. The iPhone and iPad App Stores carried just five and six non-games, respectively.

Some of this can likely be attributed to the difference in quality between platforms. iOS games tend to be quick-fix titles meant to be played at the bus stop or while in line at the bank; Mac games tend to be big-budget titles, including a game from the popular "Call of Duty" franchise and "Borderlands 2."

This discrepancy carries over to iOS games ported to the Mac. "The games on the Top Grossing list were more substantial titles, but they also included fewer iOS game ports, which tend to be plenty of fun but also try to compete at far lower price points," writes Jurewitz. "While they may get downloads, they earn less money."

Another discrepancy between the Mac App Store and its iOS counterparts: Social.

"Social apps do not make money. Period. Okay, maybe not period. TweetBot for Mac makes money. FaceTime makes money. Pretty much nothing else makes appreciable money," Jurewitz writes. "If you're planning to build a social app, please don't bet your career and livelihood on it. Unless you're going to make the Next Big Thing™. Then I guess go ahead. You have been warned."

While that may be true for the Mac App Store, three of the five -- Grindr Xtra, Zoosk, and eHarmony -- non-game apps to make it into the top 50 of the iPhone App Store could be considered social apps. (One is about one-night stands and the other about finding eternal love, but they both revolve around communication, so they're in.)

Utility plays a large factor in the difference between Apple's mobile, tablet, and desktop stores. Many of the top-50 grossing Mac apps are powerful, get-shit-done pieces of software that people rely on to do their jobs. Most of the top 50 grossing iPhone and iPad apps are games.

"If you create a single serving app that mostly solves an occasional need then sure, I'll give you a cup of coffee's worth of cash for it," Jurewitz writes. "But if you fundamentally change my life, how I work, or make it easier for me to get more done with less effort, I will pay you truckloads of cash. Most users are exactly the same."

Mountain Lion didn't drive the software business rabid. If it had, we'd likely see many of the Top Grossing applications in the Mac App Store cost much less than they do currently. Desktop apps seem to have largely been untouched by the mobile ecosystem's race-to-the-bottom pricing, despite Apple offering an entire operating system for just $20.

Mobile, on the other hand, is a different story. Whether the ever-falling prices are the result of increased competition, a "Gotta give it away" mentality, or are simply rooted in the lack utility offered by mobile applications relative to their desktop counterparts is hard to tell, but there's a huge difference between making money on the desktop and making money on mobile, convergence be damned.

[Image courtesy Alejandro Escamilla on Unsplash