Apple is expanding pricing for apps
For years, iPhone customers visiting the App Store found apps priced at 99 cents, $1.99 and $9.99. The prices were part of Apple’s policy to limit what developers could charge.
Now, 15 years after the App Store was created, the company is dropping those restrictions and allowing apps to choose from nearly 600 pricing options, including the simple $1 fee, Apple said last week.
Rising inflation around the world has put pressure on Apple and developers to be more flexible in what their customers ask for. The company also continues to face backlash from developers, regulators and lawmakers around the world over its App Store policy. The App Store is the only gateway for thousands of apps to reach iPhone users, making Apple an arbiter of software distribution.
Last year, Apple agreed to introduce more flexible App Store pricing in settling a class-action lawsuit brought by developers who accused the company of having a monopoly on the distribution of iPhone apps.
The new prices will range from 29 cents to $10,000, a break from the previous range of 99 cents to $999.99, Apple said. The pricing will roll out for subscription programs this week and will be available for other apps next year.
The $10,000 ceiling could be a sign that Apple is expecting more expensive offerings, said Carolina Milanesi, an analyst with Creative Strategies. Apple is developing a virtual- and augmented-reality headset that blends the digital world with the real world, and Milanesi said the video games and entertainment options on that new device could cost more.
“I don’t know if courtside seats to a basketball game on a headset would cost more than a real game or not, but they could,” she said.
Some app developers set one subscription price for the world and focus on developed markets such as the United States, Europe and Japan. But Matt Ronge, founder of Astropad, an app that turns the iPad into a drawing tablet, said Apple’s greater flexibility could allow it to expand into new markets.
“If you can charge a more reasonable price in India, that can open up some possibilities,” Ronge said. “Any time they open it up in any way, I’m a fan.”
As Congress winds down its year, among the bills being considered is the Open Markets Act, which seeks to give developers more control over their apps and allow them to cut the fees – as much as 30% – that Apple and Google to avoid developer charges.