New boutique App Store changes the rules of the game

In its current incarnation, Apple's App Store is a bit like your local Wal-Mart, offering bargain-priced consumer goods from a variety of manufacturers. But reports suggest Apple is mulling the addition of a premium App Store gaming boutique more along the lines of a luxury retailer like Saks Fifth Avenue or Neiman Marcus: According to, the new upscale App Store would offer a range of titles for the iPhone 3G and iPod touch priced at $19.99 each--sales would be limited to select large publishers with pockets deep enough to fund the extended developmental cycles necessary to create more sophisticated and expensive games. Of course, that would effectively shut out the myriad small developers responsible for the majority of existing iPhone applications, which is not exactly the hoped-for response to lingering questions about the impact of free and cheap apps on App Store placement and discoverability.

The debate over how the digital storefront showcases iPhone apps reached a crescendo late last year when Craig Hockenberry, principal and engineer with The Iconfactory (the software firm behind top-selling App Store downloads Frenzic and Twitterific) posted a much-discussed blog entry contending the growing proliferation of bargain-priced App Store products is inhibiting development. In an open letter to Apple CEO Steve Jobs posted on his blog, Hockenberry wrote "As an iPhone developer who's been in the App Store since its launch, I'm starting to see a trend that concerns me: developers are lowering prices to the lowest possible level in order to get favorable placement in iTunes. This proliferation of 99¢ ringtone apps is affecting our product development... We have a lot of great ideas for iPhone applications. Unfortunately, we're not working on the cooler (and more complex) ideas. Instead, we're working on 99¢ titles that have a limited lifespan and broad appeal. Market conditions make ringtone apps most appealing."

Not long after, Apple quietly instituted a series of changes improving how applications are featured in the App Store--first and foremost, the storefront now spotlights the most popular applications on each category page, at the same time separating the most popular free applications (which previously dominated download rankings) from the most popular premium apps. In addition, the layout of the App Store in iTunes is now more closely aligned with the design of the App Store application on the iPhone. But the new velvet-rope App Store is a step in the wrong direction--in its current incarnation, the storefront is a true open marketplace that offers a level playing field to all developers, regardless of their shape and size. A boutique App Store open exclusively to those developers big and rich enough to meet Apple's criteria for inclusion isn't playing fair. -Jason

P.S. This week, FierceDeveloper introduces a new recurring feature--Developer Workshop. A series of profiles exploring the current state of the mobile marketplace from the point of view of the software developers mapping out its future, Developer Workshop will focus on developers with a compelling story to tell, and offer their perspective on what the industry's doing right, what it's doing wrong and how to make it better. The first Developer Workshop features InfoMedia, the firm behind the wildly successful iFart Mobile application. Be sure to check it out here, and if you would like to nominate your firm to bask in the Developer Workshop spotlight, send me an email.