The current ranking methods do not pay off

Jul 22, 2009 13:42 GMT  ·  By

While announcing the financial results for the third quarter of the fiscal year 2009, some of Apple's officials stated, during the conference call that followed the initial announcement, that the App Store could use some improvements. Apple COO Tim Cook has reportedly stated that the company is considering new ways in which to categorize the software solutions for the iPhone and iPod touch available in the portal.

The large number of applications available in the App Store at the moment makes it rather difficult for users to search for new applications based on today's categorization methods, and it seems that Apple already has “some ideas” on how to improve the user experience, as the company's COO stated. At the same time, some voices over the web also suggested that this move had been driven by the questions about the “race to the bottom” pricing that could be found on the portal.

Apple's Top 100 ranks show apps based on unit sales, which means that lower-priced applications are more likely to make it to the list. Given this state of facts, apps have seen lower prices in an attempt from developers to make their software solutions climb into the top. According to some critics, this system is rather aimed at encouraging a “$0.99 economy,” while companies won't make further investments in providing better quality solutions for the iPhone and iPod Touch.

Charles Wolf of Needham & Company noted in his analysis of Apple's earnings report that it would be rather difficult for the company to redesign the software solution portal. “In some respects, the App Store has taken its place alongside YouTube, where poor taste is the defining metric. More ominously, it has led to a deterioration of the entire pricing structure for iPhone applications. The risk is that developers who hope to build quality applications that have a long shelf life may be discouraged from doing so because prospective development costs exceed the revenues they expect to earn on the applications. In short, this race to the bottom has the potential to degrade the overall equality of the applications sold at the App Store.”

One thing that is worth being noted here is that Apple does not seem to plan on interfering with the pricing developers will set for their applications. Cook stated in response to Wolf that “it makes more and more sense to have a bit lower prices,” and said that developers would be the only ones that would set the prices for the software. The more than 1.5 billion downloads that the App Store has seen so far show that the service's popularity is rising, which means that something needs to be changed for better-quality apps to make it into the top. Even Cook acknowledges this: “we believe that outstanding software is the key ingredient for a great mobile experience.”