Herein you’ll find articles on a very wide variety of topics about technology in the consumer space (mostly) and items of personal interest to me. I have also participated in and created several podcasts most notably Pragmatic and Causality and all of my podcasts can be found at The Engineered Network.
Free Samples Sell More Product. Yes, we know...
It’s always interesting when people do the math and figure out that the old sales concepts do actually translate largely into the digital age. The current case in point is a blog post by Jeferson Valadares a few days ago, where he analyses the iOS Paid vs Free with in-App purchase models to see which is making more money.
The free model wasn’t available from the start with Apple on the App Store - originally developers had to charge a nominal amount if they wanted to include In-App purchases with their application. However they changed the rules in more recent times and now it is possible to submit a free app that has additional content available only through In-App purchases. This has been referred to as the Freemium model (a merging of the words Free and Premium). His conclusion is that Freemium is now the winning formula for application developers on iOS. This should come as no shock to anyone.
In the traditional software sales market there was always the ability to “demo” or “trial” most software prior to forking out money for it, or at least get a taste of what the application is like before putting money down for it. Get them hooked on the free version and then they’ll pay for the upgrade. To me it needs to be clearly stated at the outset or it isn’t very fair to anyone. That is, state clearly in the description how the application is set up with In-App purchases and Apple has begun to ensure that such measures are taken consistently in the App Store which is great for the end user.
When my application was listed at $0.99 USD in the App Store it sold quite well (at least to my expectations) but when you’re up against free apps that have similar functionality, the free entry level entices users to download first and after they’ve used it they may just be more likely to buy the extras (or for the removal of ads). Then again from a developer point of view, selling apps with a up-front price is money in the bank - one download equals one sale. For those that want that certainty in their business model I’ll understand why many will stick with it. Then again, more sets of eyes on your product could just increase your overall sales.
Whichever route is chosen, developers need to decide this up front and code their app accordingly.
Price Drop Not Enough to Help Xoom, Xoom off Shelves
This week Motorola silently dropped the price of their Xoom tablets by $100 in the US. In Australia it only just became available at JB HiFi this month for the somewhat pricey $684, although this is still price competitive with an iPad 2 at $677. Their tablet has sold 250,000 in the first quarter of the year (includes both the 3G and Wi-Fi only versions) which compared to the iPads sales figures of 4.69 Million in the same period of time, 0.25 of a Million isn’t exactly spectacular.
If the iPad is proving anything it is that it is the product in town to beat. The problem is how to beat it on price and features and still make a profit. I have no doubt that Motorola are passing on the benefits of manufacturing and component cost savings now that the Xoom has been in production for half a year or so. The problem seems to be that the Xoom is not a compelling enough alternative to the iPad 2, which is thinner, lighter and faster (hard to measure but this comes down more to the operating system than the raw speed of the processor) with many, many more apps written for it (currently 230 for Honeycomb, and over 100,000 for the iPad). To start selling more Xooms will take much bigger price cuts than Motorola have given so far. Make the Xoom a clear $100 or $150 cheaper than the iPad 2 16Gb model and people will take notice. Then again it’s unlikely that Motorola will make any money from it if it does that, at least for the next twelve months before the component prices drop. By which time the iPad 3 or maybe even 4 will be released, pushing the goal posts and value proposition even further away.
It can’t be long before a lot of the tablet manufacturers start to question why they’re in this game at all.
Lion and the Magic Trackpad Dilemma
The release of OSX Lion is a few weeks away give or take a few and as it approaches a thought occurs: How dependent upon the Magic Trackpad is Lion? Whilst driving the interface with a mouse is quite possible, to take advantage of the system-wide gestures you will need a Magic Trackpad. Every new iMac since May this year has shipped with a choice of Magic Mouse of Magic Trackpad bundled and naturally all portable Macs (Macbooks, MacBook Pros, MacBook Airs) have a multi-touch trackpad built into them. Also around that time, Apple in Australia at least, adjusted down the pricing of their peripherals to a more reasonable $75 AUD from $99 AUD since their release in July 2010. Ideally Apple would already have a Magic Trackpad on every desktop where a Mac Pro or iMac was in use. The reality is that the people who upgrade from Leopard, or Snow Leopard to Lion and currently use an iMac or Mac Pro are out of luck with the new gestures.
The simplest thing to do would be for Apple to offer a discount or a rebate with the proof of purchase (downloaded via the Mac App Store of course) of Lion for those upgrading to Lion and that have an iMac or Mac Pro. If your iMac or Mac Pro is registered with Apple this is straight-forward enough for Apple to do - but would mobile Mac upgraders feel left out? So long as it was a token amount it may be okay - alternatively Apple could offer it across the board for all types of Macs upgrading to Lion.
However they work it, it would seem to be a good move. Apple isn’t big on freebies generally unless bad press is about. Then again, if they really want to move their existing user base to Lion (and they really do) then this would be a big incentive for the fence-sitters out there. We’ll wait and see I suppose.
Androids Software Architecture is Fundamentally Dangerous
Google have an “open” Android App Market where users can download apps freely but unlike the Apple App Store developers can upload any software they like without any kind of curation/testing from Google that the software works as advertised or is not malware. This is second time a high profile group of applications/malware have been removed from the Android App Market. Unlike the previous lot of malware, this used another “feature” of Android where an Application can download additional components from outside the App Market after it has installed.
The interesting situation is that Google has known about an exploit where an App, once installed, can download additional content from any server on the internet. The reason why Google haven’t closed this exploit for the operating system is that it can’t patch all of the devices in the field without support from carriers and manufacturers. Their Malware Removal Tool is great for existing Malware and they can pull Malware titles once users discover them but until this exploit is fixed more Malware will use it and more users will be exposed to loss of private information or failure of their mobile device.
Since Google doesn’t curate its store it can never stop this from occurring and can never be proactive - only ever reactive. Eventually when the market realises this, they will make a U-Turn and follow Apple’s approach. Of course, then they will have to stop calling their “open” system open, and start calling it what it is: a security nightmare.