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I’m sure you already read this week’s news that Apple’s profit from services is creeping up on its hardware profit. That’s mind-boggling, but it shouldn’t come as a huge surprise. They’ve been working on this plan for years.

What does “services revenue” mean in practice? It means subscriptions and part of that revenue comes from subscriptions attached to apps in the App Store. That set me thinking about pricing again. 🙄

When the App Store launched, the only option was a one-time purchase or free. Prices started “high” and raced to the bottom. Then came in-app purchases in 2009, and subscriptions a couple of years later.

Why am I giving you a history lesson on a topic you already know? Because for some, the perception of pricing in the App Store is that the story ended with the race to the bottom. That’s no longer accurate and apps are now more expensive than ever by orders of magnitude.

App Store pricing today has settled with subscriptions being the dominant business model. Most significant apps settled on prices around $3-6/month or $30 to $60 per year. Some apps offer lifetime one-time purchases as options, and from my experience, those tend to start at $100 and go up to about $300. Far, far more than almost any app back in 2008.

So is the App Store back to being an easy way to make money? Are we in another gold rush? Absolutely not, because while individual app prices have increased, the number of apps people use is quite small. I almost certainly use more third-party apps than the average person and from a quick count, I use less than 20 regularly. I’d guess that most people use less than 10.

Subscription fatigue is real, but the model is here to stay, at least for those apps that someone uses regularly. All you need to do is be one of those apps!

Dave Verwer  

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