Macworld without Steve

The tech news sites have been in an uproar the last few days about why Apple is dropping out of Macworld 2010 and more so why Jobs isn't giving this years keynote. Just a hint - Jobs not presenting has NOTHING to do with his health.

There are a lot of posts about why Apple isn't continuing at Macworld. This isn't one of those.

I'd like to talk about what will be discussed at Macworld this year.

First, I'm excited for Things 1.0. Things is a to-do list manager for the Mac and iPhone. Simply brilliant. Things will be released on Tuesday at Macworld.

Apple will have some announcements too. We know that Phil Schiller will be presenting so I'm expecting a technical keynote about Snow Leopard. We may also have some small product announcements including iMacs, Mac Minis, and Mac Pros. Based on rumors and intel's roadmap, I'd expect the Macs to be released the same day or shortly after Macworld. Snow Leopard will be later in the quarter with some sources pointing towards the end of the first quarter.

What I'd hoped to see at Macworld was an updated AppleTV but now that Schiller is presenting I think Apple is going to stick to their post Macworld game plan and have various mini announcements rather than two or three big shows each year. So I expect to see an updated AppleTV in the first half of 2009. I've got some pretty basic projections for 2009 but that is another post.

The App Store and CrapApps: A Proposal (pt. 2)

Yesterday I wrote about how the current incentives of the Apple iPhone App store are leading developers to price their apps at $.99 to maintain popularity. Yesterday afternoon I read a post on Mobile Orchard called Price and Popularity - they statistically estimate who is making the most money in the app store. In a opposition to John's argument that only low priced apps have the popularity to make money - almost all of the top ten games making money cost at least $2.99 and the average is about $5.99. However, there are more than just numbers behind why these apps are making the top $. Eight of the top ten are big brands or games from large developers. Branding (advertising) seems to be working effectively in the current system.

So what needs to change? Do we need change? I'd say yes. Mobile Orchard's evidence shows that you don't have to have a $.99 app to be popular if you have the marketing or the brand to back you up. However, I think there are a lot of really great applications out there that aren't getting their time in the spotlight or Apple isn't providing the correct incentives for them to succeed.

I've come up with a couple of steps to transition the app store (and music, movie, etc.) into a place where the playing field is a bit more fair and creativity and quality are rewarded. I don't believe in a single easy fix for complex business problems, especially when dealing with human behavior.

Step 1
Make more lists. Staff favorites, popularity, free, best selling, random 25, New in the last week, Quality, revenue, etc.

Apple can just keep coming up with different ways to show us new apps. The problem with this is revenue seems to be tied to just 1 of those lists - so the other lists don't really matter much.

Step 2
Change the algorithm of the Top Paid Apps list. This is a pretty generic list right now and it seems (as John pointed out) that it is tied to volume. Changing the algorithm to be based on revenue would change the landscape a lot but that isn't the best solution. The solution would be to make this list algorithm more complicated and less biased. This would be done by weighting the various aspects of each application (volume, revenue, customer satisfaction, etc.) and generating a score based on a mix of these criteria. This algorithm changes the store and makes it more difficult for a large company to dominate the store with advertising or branding alone. It still helps but it isn't the only criteria. The same goes for customer satisfaction, price, and volume. None of these measures should be the only criteria the Top Paid Apps list should use. Of course these aren't the only criteria that can be used and I doubt that Apple would get it right the first time (probably very close though). Ideally the algorithm would be transparent to developers but this is Apple we are talking about.

No matter what it would change the underlying incentives to produce more quality software, allow developers to benefit from higher pricing and popularity, and ultimately help me find higher quality apps in the top 50.

Step 3
Redesign the store. I've seen this comment a lot. This should of course help customers discover new apps, music, movies, etc. I think Apple can be creative and use Genius somehow but this is a long term project. This is step 3 because no matter how good the re-design is the underlying incentives need to be fair and geared toward quality and creative apps or we just go back to where we started. It's all about the incentives.

The App Store and CrapApps: A Proposal (pt. 1)

I just finished a lengthy post by John Casasanta & Phill Ryu at TapTapTap. For those not in the know, TapTapTap is an iPhone application development team.

The basic gist of the article is that the iPhone app store is becoming a "crapstore" and a few suggestions on how to fix it. John suggests changing the Top Paid Apps list from a ranking of apps sold to a ranking based on total revenue. He argues this would improve the quality the software for users and increase application prices for developers. I partially agree. I think this would change the app store in a number of ways. It would change incentives for developers in price setting. The overall price of applications would go up because the balance between volume AND price would need to be maximized whereas the current incentives encourage a maximization of only volume (the resulting price is minimized at $.99). John argues that developers will produce better apps and shovelware apps will disappear. I think that shovelware apps will still sell just in higher pricing. Their rule of the top spots will be negated somewhat by higher pricing and competing with supposedly higher quality applications but it is really difficult to see how the cards would fall at this point. My guess would be that the store would still be full of crapapps except they'd all cost $4.99 instead of $.99. Not really an improvement.

I've read in other posts and a few comments that the market has decided and to let it be. Apple said they were going to do just this when they announced the app store back in March. However, the market makes its decisions based on the environment around it. So to just say that the market decides isn't really useful. It is actually ignorant since the marketplace isn't completely free and has artificial guidelines and rules set by Apple (not the market). As mentioned above the incentives produced by the organization of the app store are driving the prices for paid apps to $.99. In the long run (John is right) the top apps in the two major categories will be priced at $.99 and Free. If this is the expected behavior for Apple's store then nothing needs to be changed. However I wouldn't be writing this post if I thought everything was going as expected. The incentives need to change.

What can we use to change the incentives? What should the goals be?

Post your ideas in the comments.

My suggestions will come tomorrow.