Dynamic Binding

Why the Mac App Store Should Stay Away From Paid Upgrades

Wil Shipley has written an interesting blog post where he strongly argues in favor for the need of paid (discounted) upgrades for apps in the Mac App Store (MAS). He also proposes a solution that features the association of one app with any number of other apps in MAS to facilitate these paid upgrades. While I like his proposal of associating apps with one another I don’t like his idea of paid upgrades. Here is why.

In my understanding such feature goes against the principle of keeping things as simple as possible. Offering the concept of paid upgrades adds complexity to a selling policy. “Why do I have to pay for this upgrade and not for that one?” “Why is this guy eligible for discounted upgrade and I am not?” I am not saying this is not manageable but do we need paid upgrades? I think not.

Apple itself has long adopted a selling policy for its own sofware products that adheres to the following principles:

  • sell the product at a relatively low price
  • offer fixes to the product for free
  • do not offer any discounted upgrades to evolutionary descendants of the product (iWork 09 in that sense is a descendant of iWork 08). This is equivalent to:
  • let everyone pay the same price for a new product(descendant)
  • stop selling a product once its descendant product is being sold (there really was enough time to bugfix it)

Simple. Here, Apple again lives up to its core value of embracing simplicity. Yet, people argue that customers will not take to pay the same price for a product they already bought an evolutionary ancestor of as somebody else paid who did not. They argue that former customers will feel (or even are?) being ripped off. I my view discussing this issue is a hopeless endeavor because product pricing in the first place is driven by all kind of factors and “fair” is most often interpreted as “marketable”. I do want to note though that not offering discounted upgrades should make room for a lower product price.

Why do customers feel being ripped off? It is because they are so used to a selling policy that does offer discounted upgrades. But policies are not by nature but offer advantages and disadvantages. It is benficial to a customer not having to deal with the circumstances of “upgrades”. The goal of a simpler selling policy is not to generate more revenue for the selling company but to keep things simple. In the end the whole set of customers of a “series” of product evolutions should pay the same in total. Individual customers (e.g. the ones that buy the whole series) may pay more than when being offered discounted upgrades. But they are probably also the ones drawing the highest value from the product.

Apple has proven so many times that it’s worth it to leave legacy behind. And by the way, I never felt ripped off rebuying iWork XY given its relatively low price. And I could even skip one evolutionary step without losing eligibility for a discounted upgrade.

What is still to be solved?

First, customers must get the reasoning behind Apple’s simple selling policy. I my view it is Apple’s call to reach out and let them know. And yes, app developers are customers. Then product selling companies should chime in.

Second, Apple should provide a means to communicate to existing buyers when a descendant of a bought product has arrived in the App Store and make the transition between product evolutions easy as pie for buyers and developers (even more so in the era of sandboxing). Regarding this Wil Shipley already proposed a good starting point to a solution.