Almost every iPhone app to cost a buck someday?

With competition in Apple's App Store incredibly fierce, and more and more quality apps available for 99 cents, how long will it before almost every app costs less than a buck?

CNET News Poll

App pricing
What's the most you'll pay for an iPhone app?

Nothing--I only download free apps
99 cents
$1.99
$4.99
$9.99 or above



View results

I find all of this talk about Apple helping publishers by charging more than Amazon for e-books amusing. Sure, the larger iPad may be more suitable for reading e-books than the iPhone or iPod Touch, but if you follow the e-book market in Apple's App Store, you know that outside a few Bible apps only a handful of the "top paid" apps in the book category cost more than a couple of bucks--and most sell for 99 cents. Moreover, if you look at the top-50 paid apps overall, I count only 16 that cost more than 99 cents. Plain and simple, people aren't used to paying all that much for anything in Apple's App Store.

Remarkably, the No. 2 ranked app in the store, All-in-1 Gamebox, bundles in 25 games for 99 cents. Yes, 25, and a good portion of them are pretty good and a few are even addictive. Oh, and by the way, the developer of the app, Triniti Interactive Limited, keeps adding more games to the app, so in a couple of months, that 25 may become 30 (I'm not sure at what point you offer an All-in-1 Gamebox Volume 2, but I expect the developer will have to cap the number at some point).

What does this all mean? Well, to me at least, the App Store is turning into a giant dollar store. Yes, you're going to have your exceptions--a few titles will still be able to command premium prices (at least with the initial launch of the app)--but the vast majority of apps will cost 99 cents or less.

For better or worse, we're seeing enough quality apps for 99 cents that people are less willing to pay much more than that for anything. More and more, you see comments in the reviews section from buyers that feel ripped off by games that cost less than a coffee at Starbucks, such as "I can't believe I just paid $2.99 for this crap. Do not buy. I've played free games better than this."

The All-in-one Gamebox now includes 25 games for 99 cents. Triniti Interactive

As many people have noted before, all this doesn't bode well for Nintendo or Sony in the portable gaming category. To get people to pay $30-$40 for a title is going to get harder and harder--even for AAA franchises that have traditionally sold millions of copies. The fact is that a $25 iTunes gift card goes a long way for parents having to fund their children's gaming habits. You're looking at supplying your child with a dozen or more games versus one. That's a big difference.

As a consumer, you have to like where all this is going. From a developer standpoint, things become trickier. Yes, if your app's a big hit in the App Store, you're going to rake it in, even if it sells for 99 cents, because the market is so large (at last count, about 65 million people owned an iPhone or iPod Touch). But you also hear plenty of stories of developers who invest good money in creating an app only to see it virtually disappear and earn almost nothing.

Will the price erosion ever stop? I think the only way for that to to happen is if Apple raises the minimum price that someone can charge for an app. It may just have to do that someday, because the competition among developers is so fierce that if Apple set the minimum price at 49 cents, you'd see plenty of app makers rushing to lower their prices.

Of course, the other alternative is to bundle multiple apps into a single app and charge 99 cents, just like Triniti and a few other developers do. The way it's going, we may start seeing more of that. And if the limited-time-only $4.99 e-book package of three early Michael Connelly novels I bought on Amazon the other day (it's now $9.99) is any indication, we might start seeing a lot more bundling in the e-book world, as well.

Let me know what you think. Is this price erosion bad or good? And what are your favorite 99-cent apps?

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