Posted on August 19, 2009 - by Eric

Fixing the App Store

The runaway success of the iPhone finds Apple in new and unexplored territories. With it comes new and interesting challenges, including a big one concerning its innovative app store. Much has been said regarding the app store and how its utterly broken. Interestingly, its only broken for developers. The other participants on the platform, namely Apple and the device owners are in a state of contentment. But its not rocket science to know that for a platform to have long term sustainability, it has to maintain equilibrium – meaning each of the participants need to be equally benefiting from each other. This equilibrium is threatening to disappear with the ‘broken’ app store. While the approval fiasco sparked by the Google Voice rejection has garnered more column inches, it’s the app store issue that is most crucial and relevant to us developers.

In order to find a real and long-term solution, one has to clearly define the problem and its scope.

It’s a common fact that the app store’s main problem is visibility. In light of the recent news that most users download apps from the App Store directly from their phones, we are gonna exclude external visibility points (websites, iTunes, etc).

VISIBILITY ON DEVICE

There are several visibility spots on the devices themselves: Featured section, What’s new section, Category section, the Top 25 section, search and the updates section. We are going to concentrate on two of the most influential spots (by far) – the Search and the Top 25.

Search

Search was recently fixed with the new keyword policy enforced during app submission. Now, description field-based SEO tricks are less effective if not totally useless. While a positive step, it was a solution to a problem only few was vocal about.

The thing with Search is it’s the last step of a purchasing intentstarted by an external influence (i.e. recommendations from someone ora website coverage). So few improvements can be thought of here.

The Top 25 (aka Top 100)

The Top 25 is based on the number of downloads in a sliding window of time (24 to 48-hours). In other words, its purely volume-based. This decision has its roots in the iTunes mp3 store which is the direct precursor to the app store. Hindsight is 20/20 so its easy but not entirely fair to criticize Apple on building the top 100 that way. I would imagine the argument that a great app will have good volume at any price sounding sensible at the time. “Nobody would be desperate enough todrop their price to 99c just to achieve volume of sales. Right?” -that  rebuttal would contain.

This was fine for a time but after several high profile reports ofdeveloper hitting it big in the app store, a ‘gold rush’ happened. Pretty soon the ratio of developers to the app buyers becamedisproportionate. Too many apps are coming in.  This effectively rendered some visibility spots ineffective in driving sales. The What’s New section became too crowded everyday. This was also true for the Updates section.  With that, the Top 100 became the only effective spot to get eyeballs. And the only way to get there is too achieve a certain volume of sales. And like in every market, digital or not, the lower the price of your product, the higher your volume is. So pretty soon, developer after developer broke down and went for the mad dash to the top regardless of cost of development. Who could blame them?  The visibility problem allowed such a tactic to be very effective. With a few holdouts (TouchGrind developer illlusion labs comes to mind) everyone is now doing it including big companies such as Popcap and Chillingo. The app store, crushed by the weight of a thousand developers, morphed into a narrow channel for a small sliver of games. Now the question is – how to fix it?

The Common Fix

Now that we have clearly defined the problem, let me talk about a fix I keep reading about particularly from large(ish) developer companies. The most common ‘fix’ I always read is for Apple to change ranking algorithm from volume of sales to revenue. This was echoed recently by Tiger Style which just released their 1st iPhone game, Spider (which is awesome, by the way). By looking at the team’s picture, you could feel their pain pricing their game at $2.99.

Tiger Style people

I think that changing to revenue-based is unrealistic for the following reasons:

1. This will alienate Apple customers who are all used to 99c apps by now.
2. A revenue system will disproportionately benefit license-based games,
3. and games from big companies or existing IPs.
4. It will be hard to factor in microtransactions
5. pop in, pop out games will become invisible (these games are what casual buyers love)
6. the iPhone average cost (hardware + apps) will rise dramatically
7. a certain category of successful apps will instantly fall off the charts

Furthermore, revenue-based ranking will only benefit the developers.App buyers will not only be confused, they will think all the appsraised their prices and would be annoyed. Some will significantly reducetheir app spending and just play the cheap ones. Overall, revenue willdrop and developers will find something else to blame. And we are back to square one except with angry customers and one less selling point. “There is an app for that… but its gonna cost you” doesn’t have the same ring as the original.

THE SOLUTION

Customers, customer, customers

Now that we’ve shot down that ‘fix’ out of the way, I think the real andlong-term solution for Apple lies with the customers, of which thereare two kinds – those who buy the apps and those who make them. First,the buyers. The fact that they basically rely on the top 100 for their app purchases should point them to the right direction, anyattempt to modify this behavior will be impossible. It’s the mostconvenient and natural way of determining what’s worth buying. Second,the creators. They have become too many that 100 slots will never beenough. Moreover, developers are clamoring for diversity in the kindsof apps the market can support. Diversity is good for Apple and thebuyers as it will expand the meaning of the device to its owners.

Expanding the charts

Here is a solution that I am laying out that will not only satisfy Apple’stwo primary customer types but will expand the impact of apps financially and creatively.

Multiply the top 100 by 3.

In addition to the current top 100 based on volume, add another Top 100 based on Revenue, then add another based on customer Reviews. All unique and not just resorted lists. For a clearer picture, I have provided a mockup below.

The New App Store?

Here are the advantages of this solution:

1. Tab #1  will be the ‘Top 100 by downloads’ which maintains the current chart therefore sustaining the bite-sized or volume dependent ones.
2. Tab #2  will be a new tab for a unique top 100 but this time by revenue (a better term for non-developers is needed here). This will create 100 more slots for bigger, robust apps. Some kind of algorithm involving no of download x price + microtransactions.
3. Tab #3 will contain another top 100 based on reviews. No of reviews, average star rating and the country of reviewers = country of the device owner should factor into this.
4. These 3 charts will be unique and not just the same pool re-sorted.
5. These will bring up the slots to 300 for the paid charts. Of course, some apps will make a presence on 3 of these charts.
6. Minimal complexity is introduced for the buyers – just one more tap.
7. The app store can now sustain three kinds of paid apps – Volume-based, Features-based and Quality-Based.
8. This will promote market growth as new types of apps will hook new types of buyers.

Is this the ultimate solution to the app store? Are there any disadvantages? Will this be enough to create a truly great app store?