It’s old news that a handful of developers struck gold by getting into the iPhone app store early. Applications that were either useful or ridiculous made some people millionaires over night. Now people are hoping that lightning will strike twice with the iPad and they’re probably right. There’s an overview of this in the NY Times.
While the iPad will run the 150,000+ iPhone apps already in the online shop, conventional wisdom has it that the graphics don’t scale well to the larger screen. So in addition to new app development, developers are creating “HD” versions of existing iPhone apps for the iPad. All well and good. Except that many of these apps that cost just $0.99 for the iPhone version are $4.99 and $9.99 for the iPad version. They’re basically the same code underneath the hood, only the graphics portions have been upgraded. So my question is: why charge 500% or even 1,000% more to people for more pixels? The answer is, because they think they can. Or at least they’re going to try and see how it works out. My perspective is that at $0.99, almost any app is an impulse purchase, something I don’t even need to think twice about. At $5 or $10, I’ll be thinking long and hard about clicking that “buy” button.
Media content providers are also going gonzo over the iPad. They’re coming up with iPad-optimized e-versions of dozens, if not hundreds, of newspapers and magazines. For me, to some extent this is a good thing. American and British magazines typically sell in Hong Kong for double their cover price. If I can access the same content on the day its published at a reasonable price, it makes sense for me.
But the NY Times will be charging $20 per month for an iPad subscription to the paper. The Wall Street Journal will be charging $17.29 (and they’ll probably get it). I’ve noticed that some magazines will be charging $5 for a single issue on the iPad. Men’s Health Magazine is a good example. If you live in the US and subscribe to the physical magazine, you get 10 issues for $15. They have a free iPad app that gets you limited content. If you want the full magazine on your iPad, you pay $4.99 per issue – that’s $50 per year! They have no printing or distribution costs for this so where is the justification for this higher price? Reviews of the $4.99 magazine in the iTunes store say that there is no enhanced multimedia content (except for some of the ads) and that it simply looks like a poorly scanned PDF of the magazine. Thanks but no thanks.
Journalist Kevin Anderson has a nice piece on iPad pricing from media companies. He calls it “a last act of insanity by delusional content companies … a set of pricing models that deliver marginal value for premium prices and show very little that differentiate themselves from the web experience,” in case you were wondering which side of the fence he falls on.
It’s early days. The pricing models will no doubt (and hopefully) change as time passes.
Meanwhile, my iPad is scheduled to ship “by” April 12th. Reports are that despite selling an estimated 700,000 iPads in the US over the weekend, Apple did a good job of anticipating the demand and most stores still have stock. So perhaps mine will ship earlier.