Sunday, April 21, 2013

The future of Apps

Today on Apple's App Store and Google's App Store, once you buy an app or song, you can never sell it again. This is completely different from CDs and older forms of media where once you bought it, you could sell it back if you didn't want it anymore. Here is a proposal for a way that app stores could still make a profit but customers could sell their things back (for a depreciation in value) to get apps or music they want.

  1. You buy an app, let's say, for $5.00. You pay the app store and they take your money. You enjoy the app.
  2. Several months later, you no longer use the app and are unlikely to ever use it again. It takes up space and there are other things you want. You sell the app back for $2.50 and get that onto your store credit. At that point you purchase a different app that you do want. That app is now for sale at $2.50 so the next person who buys it gets a nice discount. Apple and Google still make money, and customers are happy because they get a nice discount.
    1. This is a compromise between trading and getting all of your money back and being unable to recover your money once you are done with the app you were using the time before. A compromise that everyone will be happy with.
    2. By giving discounts when people buy back an app Apple and Google will be able to increase the volume of expensive apps sold, and it won't always be that price, so people might have to wait, and by advertising 50% off, or 75% off, the sale will be over quickly. When the people who bought at a discount sell the app, and they want to sell it when they are done they once again will sell it at 50% off the cost they paid, and Apple or Google will make a net profit once again. By giving people this store credit they will be more likely to buy more expensive apps, because they know they will get half of their money back when they sell it back to the store. I personally would be more likely to trade in an expensive app than an app that is only a dollar, and would be more likely to purchase an app for $5 or $10 on occasion knowing I can get half back if it is something I don't want. I also don't think the prices will necessarily double because Apple and Google will still make a profit off people who sell them back, so there won't be any incentive in doubling the price because they won't be losing income. Since they won't be perpetually on sale then the really good apps people pay for and keep will stay at their current level because the amount of people that trade them in will be so low. Only apps that have a short shelf life until they are exhausted or apps that aren't very good will be traded in, and those types of apps won't sell at higher prices because their quality isn't very good. By offering them occasionally at a discount Apple and Google will increase their volume and number of reviews which will created an incentive for app developers to make their apps stay useful for a longer time to prevent poor reviews from the people who buy them at a discount.
I am not the first person to think of this, and this was inspired by a post by NPR's Planet Money.

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