I have a problem with Apple taking 30% because the store is far too polluted now. I feel it should be scaled back to 20% due to the amount of marketing and press expenses people (read: indie developers) must now incur. I have no problem engaging in marketing activities, it's just expensive.

Also, I just had a huge argument with Apple in which they did not budge to correct a massive bug that has ultimately affected our sales:

- app was approved but would not go on sale till our bank contracts were approved. (+2 extra weeks)

- once contracts were approved, app was listed as being 2 weeks old, rather than showing a release date that was true to it's availability on the store. it's first day on the store, it was listed near the end of page 1.

- within a week, our app is now on the 2nd page. not normal for this section. should have had ~3 weeks of Page 1 exposure.

- customer's impression of the app is now distorted, they think it's 3 weeks old with only a few comments and possible not worth the download... as oppose to a brand new app that's accurately dated.

For 4 months I've bootstrapped this company and our first (premium) app has now had it's sales potential chopped at the knees. Here's where I get real mad:

I talked with multiple representatives about this glaring problem with no luck. Nobody will fix the date. I'm sick of their lack of transparency and unclear requirements around their publishing system. I've sent in screenshots and plenty of proof where their system has failed, and they are in complete denial. Supposedly they'll pass my complaint...

I'm tempted to write a long blog about it because I'm that furious about their stubbornness over this issue. Give me my 10% back, and the 7 weeks you stalled processing my bank contracts...

Sorry, had to vent.

You're problem with Apple was that you saw your 'deal' with Apple beign: 'We make an app,' 'You promote & distribute it. If it sells, we split it 30/70.'

Now you feel conned because you didn't get the implied exposure. You didn't get a fair shot at grabbing a couple of those who 'happened to be browsing,' get the appropriate number of comments, etc.

You imply that your deal with Apple is: 'We do the product & price it. You do the promotion & distribution.'

BTW, I think you are correct & this is your deal with them. But I think this puts you on the same side as the letter writer & on the opposite side to jfarmer.

I think the App Store is mostly about distribution, with the only marketing benefit being the usual ones that come with being a distributor, i.e., it's in the interests of the distributor to promote the products its distributing.

But in that framework everyone prices their apps according to the distributor's whims. In this case that means all prices tend to zero.

The only way to break out of this cycle, as I see it, is to take the marketing portion into your own hands and draw in people from outside the App Store.

I think you might agree that most (or at least a significant portion) of apps will get most of their 'promotion' within the confines of the app store. This is both because of the distribution monopoly & because of the market mindset. Consumers are often buying 'apps' not 'app X' or even 'app that does X.' There will continue to be a big number of App store browsers making decisions based only on the things they encounter in this environment. Therefore, the app store is the no. 1 promotional channel as well as the only distribution channel.

Since Apple is the main influence on this, the letter makes sense. If you think that this environment is problematic on the whole, Dear Steve is your answer.

I guess I agree with you from an individual perspective. I do not know enough about this market to have a real opinion. But it seems rational to say to developers: "Do not go after the main part of the market (let's keep calling it the ringtone app market). The way Apple has set up the market, there is a tendency towards the ringtone apps. If you do not want to sell them, you still have other options. Base your strategy on those option."

But I guess my point is that the advice you are giving is 'be unconventional' which is not something you can expect everyone to do. It's like telling online merchants not to base their e-commerce strategy on Adwords/SEO or telling a supermarket not to go after middle income families. That might be good advice, but it's niche advice.

There are larger segments where other marketing techniques are more applicable, where nobody is playing.

So, go play there!

And, each time you release an update, you can do the same, once it's approved.

Anyway, the app store is not simply a distribution channel. It's a market. A price driven one. Sure it's not in a vacuum. You can promote outside of it. But it is a pretty self contained market.

Of course, there is nothing wrong with a price driven market.

When I say "marketing" I mean "pricing and promotion." Really, I mean any activity designed to increase demand, either by moving up the demand curve (pricing) or by shifting it to the right (promotion).

Distribution does not increase demand -- it matches demand with product (at least in my mental model).

So, yeah, "marketing vs. distribution" was not the best dichotomy since most people take distribution to be a subset of marketing.

Anyhow, details aside, I agree that the App Store is a market, but it's a market in the same way that Borders is a market. There are rules for increasing demand intra-Borders, but it's necessarily constrained.

I can't believe the iPhone app marketplace as such is purely price driven. People dropped around $400 on these devices and pay between $70-$100/month for the right to use them.

It's only the confluence of factors within the App Store itself that is driving down prices.

that kind of reasoning can get you into trouble. People pay $1k+ on PCs & $60 a month to mostly use the web, yet most will not pay anything for access to apps, tools & content.

Around 2000 the web would have been significantly enhanced as a tool with access to a few paid content sites (Britannica, etc.), but few subscribed.

It is tempting to think of price/demand curves as a cold value proposition with users clearly getting more utility from a quality app then a Starbucks coffee. But mindsets move independently of this. Once consumers get comfortable with the notion that web apps are free or that iphone apps cost $.99, it's very hard to break.

BTW, along with that graph I would like to see if there is any correlation between development costs & app price.

Rather, they take care of those distribution problems like installing the software, taking payments, etc. That part is seamless and very good.

The promotional aspects are much less solid and necessarily limiting.

In theory, you could push yourself into the top 10 list with enough external marketing. At which point, you get the supercharger strapped on for free.