In 2007 I whined and whined asking for an iPhone Software Developer’s Kit. Back then I asked for five apps. It took two years, but today I’ve got them all. The last one just came in yesterday.

It’s not Voice Candy, but Voices looks as good, if not better: Retro tape recorder and microphone, cute icons, simple touch interface, and sharing via Twitter, Facebook and email, so you can spook everyone with that infernal Reverse Voice effect. For $1.19, it’s impossible to resist.

[iTunes App Store — Thanks Juanlu ]

Are you still missing a favourite?

In a way, software written in Ares is the purest kind of web app: It’s designed in a browser, written in web languages and rendered like a webpage. In another, it’s not, because the tools packages these things like native apps. As weirdly hybrid as the results are, Palm reasoning is straightforward: They want to “help Web developers make the leap to becoming mobile developers”. You know, by making web development into app development, even more so that webOS and the Mojo SDK already do. OK!

The tool will be available by the end of the year, Palm says, but it’s not clear what effect it’ll actually have. The hope is that it’ll spur development for a platform that runs the risk of scaring would-be developers away with its limited user base. The fear is that by encouraging the development of nicely wrapped web apps before they have a steady stream of regular apps, Palm is dooming the Pre and Pixi to wallow in a sea of $1 farts and spam. I’m taking bets, in the comments. [PC World]

The App Store is a strange new place for developers. Veterans and newcomers engage in bareknuckle combat, driving prices down to levels people wouldn’t have imagined charging just a few years ago. Margins drop to razor-thin levels, while customers expect apps to get cheaper and cheaper, but with ever increasing quality and depth.

For developers, for other software platforms and potentially for the increasingly fickle customers themselves, it’s uncharted and treacherous territory. But the most bizarre thing of all is—in an effort to keep people in the App Store, and to prevent competitors from getting a toehold in the mobile app business—Apple’s charting a course straight into it.

“The App Store is a very competitive environment,” says Caroline Hu Flexer, co-founder of Duck Duck Moose, an indie developer of children’s edutainment apps like Itsy Bitsy Spider. “As an independent developer without a large PR budget or well-known brands, it can be very challenging, and you’re pretty much at the mercy of Apple.”

The Problem

Most iPhone apps had no life before the App Store, and currently have no life outside it. But with those that did, you start to see a pattern. App prices could reasonably be expected to fall over time — an older game is worth less to customers than a newer game, and with other types of software, a late-stage price drop is a great way to scoop up late adopters. What’s strange though, is how prices dramatically collapse after hitting Apple’s store.

Two weeks ago we flagged some bizarre differences in pricing between equivalent PSP and iPhone games. Big titles, Fieldrunners, were inexplicably cheaper on the iPhone, even in cases where it was executed better. This didn’t make a whole lot of sense. As it turns out, it had nothing to do with Sony and the PSP, and everything to do with the App Store.

As you can see in the chart above, many apps and services take a price dip in the App Store. Zagat’s premium To Go guides cost a healthy $US4/month for Windows Mobile phones, but sell for just $US10/year (AU$12.99) on the iPhone. CoPilot 7, a navigation app, used to set you back a full $US200 on a Microsoft-badged device (later lowered to $US100); the much-improved version 8 sells in the App Store for a measly $35 (AU$42.99) today. The premium version of WeatherBug runs $US5 for people who happened to buy BlackBerry’s touchscreen phone, but just $US1 (AU$1.19) for anyone who bought Apple’s. VR+ voice recorder, a full-featured dictaphone app, runs $US30 on BlackBerry, and an incredible $US2 (AU$2.49) in the App Store. So how can this little App Store, itself a subsection of the iTunes store, squeeze so many developers to the point of near-suffocation?

The Economy

Some of this is pure Econ 101: The store serves a massive, captive audience that’s pre-trained to spend money in iTunes. The promise of higher volume makes it easier for developers to lower prices, which they use, along with interesting features and clever marketing, to set themselves apart from the competition.

If things work out just right, the App Store can move a lot of software for you. Spread your lower margins over tens of thousands of sales, and your $US2 app could make just as much, if not more, than your old, slower-selling $US30 app did. The App Store recently passed the two billion download mark, and there are likely well over 50 million App Store-ready devices in peoples’ hands right now. A vast majority of these downloads—averaging an insane 35 per device—will likely have been free. Only Apple knows just how many. But even if just five per cent of the two billion downloads were paid for, that’s one hell of a market.

It’s true that prices are falling as more and more iPhone and iPod Touch owners enter the market. But prices won’t stop falling. And more and more developers from all over the world are submitting apps too, so fewer devs are guaranteed visibility. Not all of the people investing time and money in their products are reaping the return they (reasonably!) expected.

Newsweek’s exposé on the end of easy money at the App Store goes a long way toward making the case against going all-in as an iPhone dev. Development costs are high, while success appears to be randomised. But the story doesn’t explain exactly what happened to make the situation so grim.

The Culture

Giz stories rage about app prices all the time, and in your own private way, so do most of you. Buying $US1 songs and $US2 TV shows has given us an expectation that apps should be cheap, no matter what their use. The glut of free apps you see filling out the app charts every day doesn’t help either. Software is worth less to us now, even though we use it more.

I spoke with Steve Andler of Networks In Motion, the company that makes Gokivo (not available in Australia). It’s an app that we savaged for its introductory price of $US10 a month, which then dropped to $US5 a month a few weeks ago.

Andler explained reaching the unrealistically low costs with one thing: diminished features. Their app pulls up-to-date map, traffic and POI data from NIM’s servers in real time, meaning that—beyond developer costs—they have to constantly pay for new, fresh data to pass on to their customers. But even at $US5 a month, it’s just about impossible for Gokivo to compete with an app like MotionX GPS Drive (US only), which is $US3 a month or $US25 per year.

Andler says there are subtle differences in services offered, which is true—MotionX, for example, doesn’t yet read street names aloud when it gives you directions—but your average user probably doesn’t know this, and there’s a good chance MotionX might add it in an update later on as their market share and revenues grow. But the damage is done. The app-buying customer is spoiled: As far as we are concerned, turn-by-turn GPS apps should now cost no more than $US3 a month, period. This is the new retail, and it’s weird.

Loren Brichter, father of Tweetie, is used to getting yelled at by jaded app shoppers. He’s charging $US3 for Tweetie 2, an update—but a whole new version, really—of his well-established Twitter app. Offering the software as a free upgrade isn’t realistic for him:

I priced Tweetie at $US2.99 [AU$3.99] not based on how much work I put into it (it would have been more), or to try and undercut other apps (it would have been less), but simply because I felt like $US2.99 was a reasonable price to pay for a Twitter client. Impulse purchase, but not bargain-basement. I never liked playing pricing games either — a popular pastime of other App Store devs. It’s always been $US2.99, and will probably always be $US2.99.

His decision wasn’t easy. And even though his app is the darling of the tech press, and has hundreds of great user reviews, he’s being lambasted for charging three measly dollars for a high-quality app that people will use again and again and again. Before the App Store, a complaint this petty wouldn’t have even made sense.

Apple

From the outside, it appears that Apple is encouraging a race to the bottom. The top 10 lists in each App Store category—one of the only ways for an app to get any meaningful amount of iTunes visibility—are almost exclusively the territory of low-priced impulse buys and are hard to cling onto for more than a few weeks at time. Flexer, of Duck Duck Moose, says she’s experienced it firsthand:

The ranking by volume (as opposed to revenue) on the App Store seems to drive the prices of apps down. Aside from being featured by Apple, exposure of an app is dependent on its ranking in the top lists, so developers lower prices to obtain a higher ranking.

This is echoed and amplified by the makers of Twitterific, an app that, in a bid to stay competitive, saw its price fall from $US10 to $US4 (AU$4.99), despite active development and a growing featureset:

While these changes represent perks for users, it also means that sustaining profitability for a given piece of software in the App Store is nearly impossible unless you have a break-away hit.

And if things don’t change?

Myself and others like me will have no choice but to focus our development efforts elsewhere.

With yesterday’s announcement that Apple is allowing free apps to include in-app purchases, things just got even more tumultuous. Depending on how this is handled, the top “free” apps could all be paid apps in disguise. Either that or the paid app rankings will be dominated by free-on-a-trial-basis teasers. In either case, the rankings open themselves up for opportunistic abuse, and the highest goal for any honest, talented app developer—to just crack that list—just became more uncertain.

This is disastrous for developers, even if it’s mostly incidental and a function of Apple trying to sell apps like they’ve been selling music for years, despite a totally different set of product types and customer needs. But Apple’s effect on pricing goes well beyond incidental. At least in some cases, Apple calls the shots.

A high-profile dev team that has sold a number of apps in the store since the earliest of days, and who accordingly wishes to stay anonymous, told us as much. When they approached Apple with their first app, they had a price in mind. Apple told them it was too high, and that they’d need to cut it to succeed. They chopped it in half. Even then, Apple told them to “be careful”.

This company made out fine, since they were in a position to adapt. However, to play the volume game, they had to restructure their entire philosophy around a pricing structure that, just months before, would’ve seemed ridiculous.

With over two billion data points to graph and filter to their heart’s content, Apple understands the App Store climate better than anyone else possibly can. As such, their advice is probably golden. Which is OK if you’re a relatively nimble, single-purpose company, and you can afford to risk restructuring everything you do around their store, and your costs can be covered at whatever price you evidently need to set to sell at a certain volume. But you’ll just want to keep in mind that their advice is self-interested. Apple wants cheap apps, to keep people buying them, and to keep other stores firmly in the second tier — and they’re not afraid to say it. From Apple’s last quarterly report to investors, a line they’ve been echoing since the store opened:

[Apple] also expects competition to intensify as competitors attempt to imitate the Company’s approach to providing [digital app distribution] seamlessly within their individual offerings or work collaboratively to offer integrated solutions … While the Company is widely recognised as a leading innovator in the personal computer and consumer electronics markets as well as a leader in the emerging market for distribution of third-party digital content and applications, these markets are highly competitive and subject to aggressive pricing.

You don’t need to look back any further than the launch of the iTunes music store to see an Apple that will do everything it can to push other peoples’ prices down for their benefit. Of course, you can’t really fix prices for apps—they’re not songs or movies, and each one does something different—but you can nudge like hell.

What Happens Now

So what does the App Store Effect mean, right now? In the short term, we’ll get lower prices. This is great. But in the long term, it might not be sustainable.

The promise that sales volume will make up for the rock-bottom prices you need to charge just to be seen in your app category seems increasingly hollow, and to put it bluntly, if developers don’t have a chance in hell of recouping their fees, they’ll stop trying. And I’m not talking about $1.19 iFart app spammers here — I’m talking about big players who already make money selling software. If the navigation companies, the big game studios and the premium content providers can’t thrive in the App Store, they’ll have to leave; even playing in Apple’s sandbox threatens and undercut their (sometimes much more crucial) product lines elsewhere.

And don’t forget, Palm and Android fans, this App Store Effect sends ripples well beyond the App Store. Customers expect to see functionally identical apps priced the same way across platforms, because to us, that’s what makes sense. Can devs really afford to port an app to the webOS to sell to the tens of thousands of Pre owners, when they’re expected to tag it with iPhone prices, calculated for a base of millions? Whether by Apple’s design or totally by accident, everyone who doesn’t own an iPhone will suffer for it.

The App Store Effect illustrates a new kind of economy, and it’s not going to go away. In fact, it’s going to get worse. Developers will either adapt, die or leave. But where will they go? Until there are 50 million Android handsets and 50 million Pre offspring out there, the rest of the mobile software world is pretty much screwed.

I’d seen the “Look at the happy developers!” propaganda videos Apple produces, and I have to confess that I bought into them. Everyone just looks so happy and successful in Apple Land! But my feelings about iPhone app developers and Apple changed greatly over the past while: I went from being envious of the supposed overnight millionaires to realising that they were actually not very well off, some left with debt after their stints with the App Store.

NEWSWEEK interviewed a handful of those developers, some of whom were in fact featured in the videos I so attentively watched, and they all seem to share the same story: The money’s run out.

It certainly starts out nicely enough: a developer might make $US45,000 in revenue in less than three months, some might even make several hundred thousand over similar periods of time. Then something goes wrong:

Then [come] the expenses: $29,000 for programmers, $15,000 living costs, $14,000 to Apple, $7,000 for marketing, $5,000 for legal and administrative services, $4,000 for logo and Web-site art, and $US1,800 in loan repayment.

By the end of it, many developers find themselves “several thousand dollars in the red”. The lucky ones who manage to break even or actually cut a profit aren’t all that better off either though. Too often they’ll have abandoned their old jobs in the name of App Store success and are left struggling to produce another success as funds dwindle. And that’s no piece of cake:

Most apps take at least six months of full-time work and cost between $20,000 and $150,000 to develop, according to Forrester Research, which covers the tech industry.

Worst part? All that time and money might not even help developers get anywhere. Not because they might make a lousy app (though I’m sure many do), but because Apple “rejects almost 60 percent of submissions at least once”. Now, that rejection rate is just a wee bit different from the fluffy 10% rejection rate Apple has claimed at times, so I’d love to know how everyone is coming up with their numbers.

No matter what the real rejection rate for iPhone apps is though, the fact remains that developers are finding that the App Store is no longer the cash cow it was thought to be and it makes me wonder whether they’ll run off to find something more profitable to develop for. After all, unlike in the early days, Apple’s App Store isn’t the only mobile application store in town anymore. [NEWSWEEK]

Nestled within the creative hub of Melbourne, a small studio by the name of Wicked Witch Software have been hard at work developing not fantasy games where the sedentary can find themselves escaping reality (although such games are a part of their repertoire), but two sports titles based on activities that couldn’t be further away from the actual act of game development itself. As they sit and program at their desks, the images appearing on their screens show the fittest and burliest of athletes executing spectacular sporting moves and taking the roughest of tumbles.

As curious it is to hear about the usually tech and programming oriented making games about an activity that we normally wouldn’t associate with their industry, the managing director of Wicked Witch Software and producer on the titles AFL and NRL Challenge, Daniel Visser, has said that it’s really not that bizarre a coupling.

“Sports games have been around on video game systems ever since Pong and, I dare say, after table tennis, soccer was not far behind… so in this regard, a lot of the work has been done. Gamers are familiar and expect general controls and interfaces which are common to many sports games,” Visser said.

“These games appeal to the sport lovers primarily… [They are a] fantasy for sports fans to experience that is beyond playing in the yard or watching the sport on television.”

And there are bucket loads of truth in that statement. With the success of titles such as the FIFA, Pro Evo, and a plethora of sporting and athletic simulations that have made their way out onto consoles over the past two decades, sports games definitely have a noticeably large market. But of more interest is how these games, which have proven incredibly popular with gamers and sports fans alike — are made to begin with. How do game developers take a physical activity that is so well known and understood by such a wide demographic and turn it into a successful video game? At what point does the tough and rough side of AFL meet the intricately geeky programming side of game development, and when do they know they’ve gotten it right?

“Each sport does present its own unique challenges,” Visser says.

“A huge amount goes into making any game; official games have their own challenges. We absolutely have to study the game, the players, the culture, the technical details, deal directly with the AFL and NRL to get a huge range of official information on the game, the teams, the players, the stats, the stadia, the rules, the advertisers, the television and radio personalities, official photo shoots, 3D modelling players, animating them, taking motion capture data, recording sound effects, sourcing music, focus testing, bug testing, approval processes and much, much more. The list is very extensive!”

The team behind AFL and NRL Challenge consisted of sports fans and those who knew nothing of the sports in the beginning, so a lot of the time was devoted to communicating ideas and understanding the way the sport work, Visser explained. For a studio whose portfolio features a range of licensed movie games such as Space Chimps and Ned Kelly, MMORPGS, puzzles and strategy games, the team had to take a different approach to making a sports game.

“Sports games are fairly different from an RPG or RTS,” Visser said.

“The good thing about a sports game is that the ‘game’ part is the same thing over and over, even though it does have lots of rules, this can make it easier to test than an RPG, that has hundreds of unique levels.”

“On the other hand, in an RPG you can usually make up parts and work around problems; when you are making a simulation of something that is real, you are forced to work on implementing almost everything!”

So it seems there is a middle ground where the geeks and sports heads can meet, mingle, and nut out a game that both sides can play without the threat of abominable wedgies. Or, in Wicked Witch Software’s case, both sides may even be able to win each other over.

“People here have developed much more of an interest in the sports, which is good to see!” Visser said.

“The best result for us is to ensure we satisfy gamers and sports fans as well as everyone in between!”

Playing With Balls is Gizmodo AU’s week-long look at the technology behind the sports we love, from the jerseys to the balls and everything in between. Go your mother’s team!

Users of Android devices will be able to grab a special judging app from the Android Market to download, test, and rank entries. The top 20 programs in the following categories (200 in total) go into the second round:

• Education/Reference
• Games: Casual/Puzzle
• Games: Arcade/Action
• Social Networking
• Lifestyle
• Productivity/Tools
• Media
• Entertainment
• Travel
• Misc

In the second round (roughly October), Android users will make up 40 per cent of the vote, with a Google-selected judging panel accounting for 60 per cent of the score. Winners will be announced sometime in November.
Prizes will be distributed as follows; all prizes are in USD:

For each of the 10 categories:

• 1st prize: $US100,000
• 2nd prize: $US50,000
• 3rd prize: $US25,000

Overall (across all categories)
• 1st prize: $US150,000 (meaning the overall winner will receive $US250,000)
• 2nd prize: $US50,000 (meaning the 2nd prize winner will receive up to $US150,000)
• 3rd prize: $US25,000 (meaning the 3rd prize winner will receive up to $US125,000)

Full details at the Android Developers Blog. What are you waiting for? [Android]

Mojo is of the utmost importance to Palm: Without a huge and vibrant developer scene churning out tons of apps, the Pre might not excel as a platform enough to challenge the iPhone. The SDK that leaked is a beta, and some are warning potential developers to treat this version as a guide rather than a final release. Now the fun really begins—it’s time to see what the Pre (and Pre community) can do. [PreInsiders, Thanks Pat!]

You can watch it here. Facebook’s videos aren’t embeddable, or I wouldn’t make you click an extra time. The more I think about it, the more this video makes me angry. What the fuck are they doing for almost five minutes? How about using that time to get Windows Mobile 6.5 out the door instead of making these horrible videos? [Facebook]

Five independent App Store developers, stymied by the prospect of big publishers entering the space, have banded together to form a games seal of quality called App Treasures that they hope will protect their business from heavy hitters like EA.

According to Kotaku, the five devs are Imangi, The Blimp Pilots, Snappy Touch, Streaming Colour Studios, and Veiled Games.

“This is our way of combining resources to become a bigger player, while retaining our independence and without any of the drawbacks and strings attached that come from working with a publisher,” said Keith Shepherd, the CEO of Imangi Studios, in comments made to Kotaku.

The five developers will also direct users who buy one of their seal-stamped games to other games within the network that also bear the seal. Eventually, other developers may be invited in, although selection criteria were not disclosed. [App Treasures via Kotaku]