Aaron Shapiro

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Convincing the world to pay for software again

Originally published in MediaPost, June 24, 2010

Ten years ago, all of my computer applications were paid for, licensed and resided on the hard drive of my desktop. Microsoft and Adobe were the kings of my computer. Sometimes shareware would get a megabyte or two. But with the emergence of broadband, cloud computing, AJAX and JavaScript, I've found myself doing more and more of my everyday tasks in browsers and through various open-source applications. If so inclined, I could do graphic design with Gimp, manage email with Gmail, or even do 3-D design with Google SketchUp. While Office and other heavy-duty desktop programs still rule the corporate world, it's been a long time since a viable model existed for consumers purchasing applications.

So give Apple some kudos for convincing the world to pay for software again. Thanks to the App Store, all of a sudden there's a viable business model that involves installing software on a computer and getting consumers to pay for it.

On the iPhone, people impulsively pay for $0.99 apps that provide the same utility or entertainment as equivalent experiences available for free in a browser. Of the top 25 current paid apps, only two of them - RedLaser and the Megapixel Camera - are utilities that are relevant for use on a mobile device; the rest are games and light entertainment that can readily be found online. True, thanks to Apple's blocking of Flash and the limited usability of a mobile browser, Apple makes it hard to enjoy that entertainment on the phone, but the fact remains that Apple has convinced the world to pay for what used to be free.

Fundamentally, effective iPhone apps are those that provide quick, worthwhile utility while away from the home. Games, FourSquare and RedLaser are all a success because they're highly useful when on the road - whether it's fighting boredom, finding friends or checking the price of a product. But in the end, these aren't true programs in the sense that Microsoft Word is a program. They're really small utilities worth a dollar or two.

The iPad ups the ante because now there's a market for real applications again, the kind you used to buy before the Internet. The iPad isn't about quick-access mobility; it's about consuming content at home. The consumer expectation is that it's a device to spend time with that provides both immersive entertainment experiences and applications you can use. They're not apps you whip out when on the road and put away just as quickly.

The result: All of a sudden, applications have pricing power. People are paying for software again. It may not be a $200 Office Suite they're buying, but the $4.99 to $9.99 price points of the most popular iPad apps suggest a scalable model for real software innovation that people will actually spend cash on.

Apple's also done a great job making sure "tablet apps" are more powerful than anything someone could find ad-supported or free in a browser. Flash doesn't exist, so browser-based applications are constrained by HTML5 - no match for the power of iPad's native development environment, Cocoa. But more important, native iPad apps can fully utilize touch interface controls, while browser apps are trapped by limited usability. True, I can enlarge text and images with my fingertips. But for someone who has fallen in love with swiping and zooming, being restricted to clicking when using a Web application is a pretty frustrating experience.

Quick test: Look at your photos in the iPad photo app. Now try looking at your photos on Flickr. All of sudden, Flickr feels pretty dated and annoying. Why can't I swipe from one photo to the next? A Web site, no matter how great it is, will never be quite as pleasurable as the same experience in an iPad app. Result: The iPad wins.