Yesterday Apple announced the Mac App Store, which will be available in 90 days. The Mac App Store is modeled after the iOS App Store. The store provides customers a trusted way to buy and download safe, quality software for the Mac OS X desktop. As with the iOS App Store, software developers must submit their apps to Apple for review, apps must adhere to a list of rules, and Apple gets 30% of the app price for each unit sold.
My first impression when reading about the announcement was 30% is too high. E-commerce providers such as Fastspring and eSellerate charge a much lower percentage. But the Mac App Store does do a few things that other e-commerce providers do not. The Mac App Store has the potential to reach many more users given that the app will be available on the desktop. Also, the Mac App Store will host the download file. But when I think about it, none of this is new. The only thing new is Apple.
Download sites have existed for years. The PAD specification, which has been available for years, provides a mechanism for software vendors to publish app metadata and be discovered by download sites, and ultimately by customers. And many download sites and e-commerce providers provide hosting of the app. Even Microsoft gave it a try with its web-based app store concept called Microsoft Marketplace, which after many years is no more. So it seems to me, the only thing new and different about the Mac App Store is the review process.
Downloading desktop software from download sites can be risky. You never know if the software you download contains a virus or malware. Attempts such as pre-scanning software for viruses by download sites have been made to instill trust but at the end of the day it’s hard to trust software downloaded from these sites. The Association of Software Professionals have attempted tackling the trust issue for years and has had some success. Still, at the end of the day, gaining customer trust with an online business is challenging.
Personally, I never download software from download sites but I buy a lot of software online. I only buy and download software from the vendor’s own web site, and I’ll only do it when I feel I can trust the vendor. The vendor earns my trust by having a professional online presence, provides contact information with bonus points for having a physical address and phone number, offers a money back guarantee, and most importantly digitally signing the software with a certificate from a trusted CA. If you browse the White Peak Software web site, you’ll see I follow these trust rules myself.
Trust is important when doing business in the online world, and the Mac App Store will help gain customer trust. This should, in turn, help encourage customers who have never bought desktop software online to final do so. The added level of trust and the potential reach to new customers makes the 30% cut to Apple worth while in my opinion. But I still have concerns, from a developer’s point of view, about the Mac App Store.
Many existing, and popular, apps sold today including some from Apple will be rejected from the store based on the list of review rules. But a bigger concern for me is that software vendors wishing to sell through the Mac App Store as well as through their own company web site will be required to maintain two different versions of the same app. Mac App Store apps cannot be self updating, cannot be trial version, and cannot use its own licensing scheme. These three things are key components to selling desktop software on the Internet today. This means a software vendor wishing to sell an app through the Mac App Store as well as through its own company store must have two separate builds of the app, one build without the self updating, trial version, and licensing scheme for the Mac App Store, and one build containing these features for sell through one’s own online store.
Another concern I have with the Mac App Store is the lack of pricing and licensing options. For example, Killink CSV is a business app bought by individuals and large companies alike. By selling directly to the customer, I can offer various pricing and licensing options. I offer a volume discount on purchases. The more single user licenses you buy, the lower the per unit cost. I offer a site license option too, which allows customers to pay a lower price while being able to install the software on a greater number of computers. Then there are coupons. I use coupons to offer discount pricing for a variety of reasons. It’s doubtful the Mac App Store will support coupons in the next 90 days. Then there are affiliates. While sells from affiliates represents only a small portion of my product revenue, affiliates do bring in additional customers. Come to think of it, in a way, one could think of the Mac App Store as an affiliate with review process.
I can’t help but wonder…giving the fact that I have more control over pricing, can offer discounts, and run sales using coupons…will customers become annoyed when they pay one price for my app in the Mac App Store only to find out they could have saved money by buying directly? And how will customer support change with the introduction of the Mac App Store? I’m assuming Apple will not provide any customer information after a purchase to the software vendor. What happens when a customer calls or emails me about re-installing the app on a new computer? I’ll have to first find out how they purchased the app, through the Mac App Store or through my web site. I can see it now, a customer responds with, “I don’t remember.” And what about refunds? Direct purchases can be refunded, Mac App Store purchases, well, “You’ll have to talk with Apple.”
Overall, I can see the Mac App Store leading to confusion and delay.
Oh, and then there is the concern of paid upgrades. Many, if not most, desktop software vendors count on revenue earned by paid upgrades. Paid upgrades are currently not supported in the iOS App Store, so I have to think the same will be true of the Mac App Store.
And let’s not forget the trial versions of the app. A customer can come to my web site and download a free 30-day trial of my software. This gives the user time to evaluate the app before making a purchasing decision. This is not going to happen, at least not initially, with the Mac App Store. Will this lead to users demanding lower prices and if so will software vendors given in starting a new race to the bottom. I certainly hope not. Software vendors need to stay their ground and price their products based on the value of the app.
Will my app be rejected from the Mac App Store if I include in the app description, “Come to my web site to download a free 30-day trial”? And what of cross-platform apps? Say I write a version of Killink CSV for the Mac. According to the list of review rules, I cannot mention the availability of the Windows version in the app’s metadata. If I do, it will be rejected even if this is a key selling point of the app.
I welcome the Mac App Store. It has great potential for tapping into a customer base that otherwise would be un-tappable. But I worry the Mac App Store is not the right place for many desktop app and by not being in the Mac App Store sells will suffer. Only time will tell if the Mac App Store will help software vendors, especially the indie shops like White Peak Software, to succeed.