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Buying Apps

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Been mulling over this for a while, now. Before the Mac App Store was announced, I was thinking about “mobile apps” (mostly the iTunes/iOS App Store, but also Android Marketplace). Since the MAS announcement, though, I’ve been thinking about something which may be a broader shift. And because the MAS is opening tomorrow, now might be a good time to put some of these ideas out there.

The following blogpost, by Markus Nigrin, provides important insight from the perspective of some iOS developers.

Mac App Store – Sneak Peak

I tend to agree with the underlying idea: “traditional” Mac OS X developers run the risk of missing the boat, with the Mac App Store.

This point is made even more graphically by David Gewirtz on ZDNet.

While I do care about the fate of Mac developers, I’m really thinking about the users’ side of the equation. And I’m not really caught up in the Manichean “is it a good thing or a bad thing for us” kind of thinking.

Now, I do still think about the business side of things. Not that I have “a dog in this race,” but I do think about the business models, including app costs and “Free As In Beer”/No-Cost Software. Partly because, until recently, I rarely bought applications.

A few things changed, recently. One is that I’ve been able to allocate more money to my computing needs (partly because I do freelance work, much of it related to online stuff). Another is that I started paying more attention to software bundles like MacUpdate Promo and MacHeist. Yet another is that (very recently) I started buying games on Steam. And, finally, I’ve been getting a rather large number of iOS apps on the App Store, including some paid ones (despite my frustrating experience, initially).

One thing I notice is that there does seem to be a distinction between mobile-style “apps” and “traditional software packages.” While “app” is short for “application” and there may not be a very strong distinction between the type of software distributed through the Mac App Store and other applications, “apps” may be emerging as something of a new category. Partly in terms of business, partly in terms of development models, partly in terms of users’ expectations.

It may be a bit confusing, especially since Apple itself is selling pieces of software on both sides. For instance, they will distribute their iWork productivity suite (Keynote, Pages, and Numbers) through six (6) different ways.

  1. You can buy it as a productivity suite.
  2. You can get it through an education licensing program.
  3. You can get it as part of a box set (with Mac OS X and iLife).
  4. You can get it preinstalled on new hardware.
  5. You can buy iPad versions of individual apps (through the iOS App Store).
  6. And you’ll soon be able to buy Mac versions of the individual applications on the Mac App Store.

There are significant (and frustrating) differences between the Mac and iPad versions of these three programs. But Apple still markets the iPad apps as directly equivalent to the Mac applications. It might work as a marketing strategy, but it can be quite confusing. For instance, it can be difficult to find information about features which may or may not be present in the iPad version, such as the ability to change master slides (was looking for this just last night).

In mind, there might be a distinction between apps and applications in terms of user behaviour. When I get something from the (iOS) App Store, it’s usually a matter of curiosity. Sure, there are occasions where I look for and get a very specific app for a very specific need. But, most of the time, my behaviour is “impulsive.”

If it’s a free app, I don’t think twice about it, it’s almost on the order of a reflex. If the app is inexpensive (or if AppShopper warned me that it decreased in price quite significantly), chances are that I’ll buy it even if I’m just vaguely interested in it. If it’s more expensive, I may add it to my AppShopper wishlist, look for cheaper equivalents, or make a headnote to look later in that category.

In my mind, free and inexpensive apps need almost no justification. But, after a certain threshold (which may be as low as 5$ in certain categories), I need a rather strong incentive to invest in an app.

In many ways, the same is true with (non-mobile) applications. The threshold might be different, within the same category. But there’s a point at which I go from “sure, I’ll download this” to “do I really need it?” And cost isn’t the only factor. I won’t download a no-cost application if I get the impression that it’ll be difficult to use or take too much disk space.

Apparent simplicity is important, here. Even if an app merely looks simple, I might get it, just to explore and experiment. If, at first blush, an application looks unnecessarily complicated, chances are that I won’t g

Thinking about this, I’m predicting my own behaviour with the Mac App Store. I’ll probably start trying out all sorts of free and low-cost “apps” if they look like they can provide me with instant gratification. (Especially if I can use an external hard drive to store them.) And I’ll probably buy a few “apps” that I can justify, in terms of effort and cost. But I might give up quickly on these if my initial experience isn’t optimal (if the apps in question aren’t worth the cost or effort). And I’ll try different things associated with these apps I do enjoy.

Which, in a way, is my main thought: apps aren’t really like applications, in this case. They’re a “hook” for something else.

There are useful examples with Web applications and services. Especially things like Foursquare, Twitter, and ToodleDo. I wouldn’t spend fortunes on apps for use with these services. But I do spend a fair bit of time using these services. Mixed models like those for InstaPaper and TaskPaper are also important to keep in mind.

I actually have a lot more to say about all of this, but it’s probably better if I post it now. We’ll see how things go, tomorrow.

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Apps and iTunes Cards in Canada: Follow Up

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Recently blogged about this issue: though information about this appears nowhere on the card or in the terms of service, iTunes Cards (gift cards or certificates) may not be used to purchase applications on the Canadian version of the iTunes Store.

Since I posted that blog entry, a few things have happened. I did receive replies from Apple, which were rather unhelpful. The most useful one was this message:

Hello Alexandre,

I understand and apologize about your situation and i do want to assist you as much as possible . I am going to issue you 10 song credit. Again i apologize and i hope this issue gets resolved. I will also apply feedback about this issue .

Thank you for choosing iTunes Store and have a great day.

Sincerely,

Todd
iTunes Store Customer Support

I had no intention of purchasing tracks on the iTunes Store at this point but I do “appreciate the gesture.” Here’s what I wrote back:

Thanks. I wasn’t planning on downloading songs but I appreciate the gesture.

Not overwhelming gratitude on my part. Simply stating that, though this isn’t appropriate, I can still be polite.

What’s funny is that I received this reply to my simple “thank you” note:

Dear Alexandre,

You’re very welcome. I’m glad to hear that i was able to help some .

Nothing makes Apple happier than to hear that we have pleased our customers. I hope that you continue to enjoy the iTunes Store.

Thank you for choosing iTunes Store and have a great day.

Sincerely,

Todd
iTunes Store Customer Support

From that message, you’d think I had praised the iTunes Store for hours on end.

Just in case it might make a difference, I tried filing another support request. Here’s the reply on that one:

Dear Alexandre,

Welcome to the iTunes Support Site. My name is Staci and I am here to assist you.

Thank you for contacting Apple about the App Store. We’re glad you’re interested in
this new offering.

I’m sorry, but you will not be able to purchase games or applications with store
credit or an iTunes Gift Card in Canada. Customers residing in Canada may only
purchase games and applications using a credit card.

I am confident that the information provided will solve your gift card issue. If
you have further questions, I can be contacted during the hours listed below. Thank
you and have a prosperous New Year.

Sincerely,

Staci
iTunes Stores Customer Support

This one sounds even more like a canned reply and  “the information provided” doesn’t, in fact, “solve [my] gift card issue.”

Clearly, Apple isn’t “doing the right thing.” In terms of customer service, it’s not a positive experience. I did enjoy some aspects of the iTunes Store and I think it’s quite convenient. But I’m not “enjoying the iTunes Store” so much, anymore.

In the meantime, I started receiving comments on my previous blogpost on the issue. One was from someone who purchased a 150$ iTunes Card. Almost as much as the 8GB iPod nano.

Most of the advice given on this issue, outside from Apple’s unhelpful replies, has to do with things which are illicit. One would be to resell tracks purchased with this card to other iTunes users. Since the tracks are now all DRM-free, this is technically feasible. But it’s also illicit and potentially traceable. Another piece of advice, to purchase applications using an iTunes Card, is to buy a card in the US. As far as I know, this is technically doable but it also contradicts Apple terms of service.

Not good solutions, but ones which disgruntled iTunes Card buyers may contemplate.

Since then, I also received a message asking me to complete a survey about my experience with Apple support. Here’s the complaint I included in that survey:

I was given the “runaround” on a very easy issue: I need a refund.
There’s an obvious problem with the fact that iTunes Cards may not be used to purchase applications on the Canadian version of the iTunes Store. Nowhere on the card itself or even in the Terms of Service is this restriction mentioned. As this issue gains prominence, Apple could get a significant hit in consumer perception. Not sure if it will become a class action lawsuit, but it’s as significant an issue.
Email replies were disappointingly unhelpful. Instead of investigating the situation, I was led to a forum post musing about the possible reasons for this restriction. I was eventually credited ten songs even though I had no intention of getting tracks on the iTunes Store at this point.
While the amount of money is relatively small in my case, I’m getting comments on my blog from people who lost the money equivalent of an iPod nano.

Again, I probably won’t file a class action lawsuit against Apple, in part because these suits mostly make money for lawyers. But my dissatisfaction with Apple remains. In a way, it even grows, because there were several opportunities for Apple to “do the right thing.” Yes, it’s partly on principle. But it’s also a matter of the way the corporation is perceived. In this case, they sound polite but quite dismissive.

There’s no question in my mind that a mistake was made: no information on this restriction was added anywhere a gift card purchaser may find it. Because of this, people are redeeming iTunes Cards with the specific intention of enjoying their iPhone or iPod touch in a new way. As this was a season of gift-giving, some people probably received these gift cards and, thinking they might use them anywhere on iTunes, redeemed these cards instead of returning them. Only to find out, after the fact, that “you will not be able to purchase games or applications with store credit or an iTunes Gift Card in Canada.”

Bummer.

This frustration isn’t such a big deal in the abstract. But context is everything. Part of the context is the set of restrictions placed by the iTunes Store in general. It may not have been much of an issue, for a given user, that it’s impossible to buy applications directly from developers, unlike Android Market (the Google equivalent to the App Store). For casual users, this is pretty much a non-issue, especially since the App Store is so convenient. But this restriction becomes quite conspicuous once an iPhone or iPod touch user runs into this kind of problem.

There’s a broader issue. With the iTunes Store, Apple is sometimes said to have “solved micropayment.” Ever since the iTunes Music Store opened, at least part of Apple’s success has been assigned to the Amazon-like way they implemented their payment structure and it’s quite likely that the iTunes Store model has been having positive effects on the way Apple is perceived by investors. Because of the way it handles payments and reduces overhead, Apple has been able to make money on relatively small amounts of 99¢ (and, recently, 69¢). I’d call this “minipayment” because one can easily imagine even smaller amounts being paid online (for instance, a minute of cellular or long-distance communication). In this case, Nokia, eBay/Skype, and cellphone carriers have better micropayment systems. But Apple still deserves “Wall Street cred” for the way it handles small payments.

Yet, once you start thinking about Apple’s payment system in more details, say because of a bad experience with the applications section of the iTunes Store, you start noticing how flimsy the payment structure is because it relies on users willingly entering a closed system. It’s not just that the iTunes Store is closed. It’s that, once you buy on Apple, you need to restrict yourself to “Apple’s ecosystem.” This has often been the case on a technical level. It’s now a matter more visible to the casual end user: money.

From a “tech media” perspective, this closed ecosystem is part of a pattern for Apple. But the financial part isn’t frequently discussed.

It will sound like a strange analogy but it’s the one with which I come up as I think about this: IKEA bedding. Because IKEA’s measurements are metric, bed linen was an issue with IKEA-purchased mattresses in Canada. Not sure if it’s still the case but it used to be that those who bought beds at IKEA were then stuck with metric measurements for bed linen and those are difficult to find in Canada. In effect, those who purchased beds at IKEA were restricted to IKEA linen.

In computer terms, the classic case is that of a difference in fileformat between products from two developers. Apple certainly had its share of “format wars” but it mostly solved these issues. Recent Macs (including the Mac mini Intel Core Duo I’m currently using) support a Windows installation as well as Mac OS X. In terms of networking, it’s now quite easy to set up mixed networks with both Mac OS X and Windows machines. Even the music part of the iTunes Store is lifting those restrictions which made them technically incompatible with other devices. All in all, Apple has gone away from its strict control, at least in technical terms.

But in financial terms, Apple is using a fairly restrictive model for its iTunes Store. Once money gets into an account (through gift cards, allowances, or “gifting”), it can only be used on that account. Because of some restrictions specific to Canada, some of that money is restricted from use for buying applications. And Paypal isn’t available as a payment option in the Canadian iTunes Store. In effect, the only way to purchase an application for the iPhone or iPod touch is through a valid credit card. Given the fact that a majority of people are likely to have some kind of credit card, this doesn’t seem too restrictive. But there’s a variety of reasons people may not have valid credit cards and there’s no connection between buying something on the App Store and using a credit card. The iPod touch has been marketed as a gaming platform during the holidays and chances are that some iPod touch owners are children without credit cards. I’m not sure what the options are for them to buy iPod touch games. The same could be said about games for the iPod Classic, a device which clearly is used by children.

Part of the problem relates to the Canadian financial system. For one thing, debit cards with credit card numbers are rare in Canada (I’m not sure they exist). Many Canadians tend to use Interac, which does offer some advantages over credit cards, IMHO. As I’ve recently experienced, Interac now works online. It would make a lot of sense for Apple to support it online (I’m sure Canadian Apple Stores already support it). And there must be a reason Paypal, which can be used for iTunes Store purchases in the US, is unavailable in the Canadian iTunes Store.

So, yet again, Apple’s Canadian customers appear “underprivileged” by comparison with US customers. In public perception, this is pretty much a pattern for Apple.

I don’t think that the messages I’ve received helped. Though they were polite, they were dismissive as my problem was basically dismissed. From being dismissive, Apple can sound arrogant. And arrogance is tricky, in today’s marketplace.

I’m reminded of the recent Simpsons episode about Apple. Excerpts of it made their way to YouTube as they play on several gripes people have with Apple. Arrogance was clearly a key theme in that episode. Another Apple parody, the MacBook Wheel spoof from The Onion, was more directly centred on making fun of users and elements related to Apple’s perceived arrogance were less obvious.

I don’t own AAPL.0 stock but, if I did, I might sell some. Sounds silly but corporations which treats its customers in this way aren’t something I would invest in. Despite the fact that I do “invest” in Apple products.

I just wish Apple “did the right thing.”