$1,000 iPhone app actually not a good thing
August 12 2008 - 3:07 pm ET | Colin Gibbs | RCR Wireless News
Mobile operators are smiling through clenched teeth as the mobile industry moves toward “openness.” And “I Am Rich” is a good example of why some of their fears are well-placed.
In case you missed it, Apple last week got a little egg on its face thanks to I Am Rich, an App Store offering that does nothing but insert a glowing garnet on the phone’s screen — for a cool $999.99. The application reportedly lured eight suckers (netting German developer Armin Heinrich nearly $5,600) including one sap who claimed he thought the offering was “a joke.”
An outcry from bloggers and techies forced Apple to quietly pull the virtual equivalent of a Hermes bag before any more fools parted with their money. But the move to drop the offering infuriated other observers, one of whom asked “if Apple should be playing nanny to iPhone owners who make $1,000 jokes.”
The answer to that question is: Yes, it should, if it cares about its reputation. While “caveat emptor” is a good rule of thumb for consumers, it makes for rotten corporate policy. And the last thing Apple needed in the wake the problematic launches of the iPhone 3G and MobileMe was more trouble on the PR front.
Critics have argued that I Am Rich only underscores the need for Apple to truly open its gates and allow developers and publishers to sell their wares directly to consumers — and they may have a point. But wireless carriers — who are sure to face these kinds of challenges as the garden walls continue to crumble — don’t have that option. For now, at least, most consumers see their carrier as the face of the wireless industry, and will hold the operator responsible for any bad experience. An exorbitantly priced download or glitchy game purchased from any storefront other than iTunes is more likely to result in an irate phone call to the operator, not to the vendor.
The industry’s move toward open is real, it’s happening, and it’s a good thing. And carriers should move more aggressively in allowing their subscribers to access a host of offerings from third parties. (I’m looking at you, Verizon Wireless.) But an operator who offers a free-for-all where any vendor can approach users with any device or app doesn’t just risk being left out of the revenue stream. It risks the kind of PR nightmares that infuriate consumers and boost churn. And that’s not just bad for the carrier, it’s bad for the industry.
August 14, 2008 04:09 pm
Yes, I'd like to know how it got approved in the first place. Stick to your guns Apple, if it's approved, keep it up!! Oh and if you don't like a $1000 app, don't buy it. Pretty simple.
August 14, 2008 06:18 am
Being in the thick of dealing with mobile phone applications for several years and computer applications in general for more years than I care to admit, I am of two minds on this.Are the carriers slowing innovation in the marketplace. There is absolutely no doubt that they are. Most small developers can not afford to take the time and resources to develop applications and get through the gauntlet of carrier approvals to deploy.As a developer who has had to support applications, I do see the carrier's point of view, however, on dealing with customer support. While I'm sure most of the people who read this would never think of calling Comcast if an application that they installed doesn't work, spend an hour in ANY technical call center and you will hear the ridiculous calls that come through. It is not unreasonable to assume that each one of these calls costs the help desk $10 to answer. I don't know about the carriers' margins, but that would likely eliminate the monthly profit from most subscribers who would make such a call.When you add on top of this the ability for an ill performing application or device to bring the network down or have significant impact on the subscriber such as large bills, diminished battery life or worse. Bottom line is this - Apple did the right thing by pulling the application. By offering the application on their web site, good or bad, a large portion of consumers and bloggers will hold them and their brand responsible. Carriers do need to work harder and faster to open their networks to new applications. This will require improving the networks and handsets to deal with ill behaved applications as well as a shift in consumer mindset on responsibility for non-carrier supplied applications. These should be strategic imperatives for all carriers up there with improving coverage and speed of the networks. But carriers who are successful will be the first choice for application and device developers who will drive innovation that will in turn drive adoption.
August 13, 2008 06:28 am
Colin, ever heard of free markets???What is this whiney, hand-holding/mothering of the consumer? Sounds like some over bureaucratic gov't regulation move. This ain't socialism.If someone wants to charge $1000 or $10000 for an app, go for it. Value is in the eye of the consumer, not some third party regulator.Is a Bentley worth 10 times the price of a Honda? Some people will spend $200,000 on a car because they can. It's the American way.Like Dave Chapelle said at the end of his show - "I'm rich _____".
August 13, 2008 06:28 am
An app that cost more than buying two iPhones, is that a multi-user price?, or the sucker price."There's a sucker born every minute"There are (and always will be) a lot of gullible people in the world, and some of them even have smart phones.Whose the idiot?
August 13, 2008 06:28 am
Am I Rich? Yes, the guy who wrote it knew there were enough idiots out there that would download a $1000 piece of junk and make him rich! I'm just sorry I didn't think of it first. Shame on Apple for pulling the plug. You don't see Microsoft doing this everytime an idiot is about to crash their computer. That will prevent a whole business from popping up: iPhone "tuneups".
August 13, 2008 06:28 am
... the app description explained EXACTLY what the app did and how much it was. It wasn't 999, which could be mistaken for 9.99! It was 999.99, clearly noting that it was essentially a grand. Honestly, if I had a grand to drop on an app that no one else was going to have (even if it just made my screen glow red) I would do it, because that's the price of exclusivity. I honestly have no idea why Apple pulled the app. It wasn't falsely advertised or duping customers... if someone thinks that "this must be a joke app" and goes through the entire process to purchase the app without stopping, then maybe that someone shouldn't be allowed to have an open access cell phone. The app designer did NOTHING wrong except assume people would read the description and believe the description... lord forbid.
August 13, 2008 06:28 am
I have two thoughts :1) Apple approved the app! They approved the price, saw the code and said OK. It is totally Apples fault. 2) Did the app offer anything in the description that it did not deliver? NO! So anyone dumb enough to pay 999 for an app deserves what they get.
August 13, 2008 06:28 am
I also disagree with this point - when people buy an application for their PC that doesn't work, they don't blame Dell.When someone buys a broken down engine off Craigslist and drops it into their car, they don't blame Chevy when the car breaks down.If you allow people to make their own choices they will generally act intelligently about it and respect the vendor more for allowing them the freedom to experiment and improve the product to better meet their needs.I like the Microsoft Windows method of doing things where if you try and install an unsigned driver it pops up a scary warning dialog which scares off most amateurs/tinkerers.
August 13, 2008 06:02 am
The $1,000 app was interesting. I was surprised that a few fans actually purchased it. But what do you think about the whole iPhone "Kill Switch"?http://kreuzer33.wordpress.com/2008/08/13/steve-jobs-confirms-iphone-kill-switch/
August 12, 2008 03:11 pm
I disagree. Apps for 'dumbphones' may be a little more complicated, the iPhone isn't supposed to be dumb. I've never once been under that impression that apps I buy/download/install on my Windows Mobile device have anything to do Verizon.Apple's folly, is the same as I think you are dinging Verizon for...an unrelenting desire to control anything on their devices. The big difference is that Verizon's controls are limiting and annoying, but purposed at allowing the carrier to offer a competing product to drive revenue in their direction.Apple doesn't want to generate a competing product, they just want to funnel cash through them for profit. They didn't intend on determining the value of 'I am Rich', or the purpose, or even if they had something better. They just saw the % profit of $999 and smiled.And back to my original point, most phones sold by verizon are 'dumb phones'. And while we all know that they could do more, I don't think most of us expect it. Smartphones, such as Windows devices and the iPhone are less phones than they are mobile computing devices. We don't ask our ISP or Dell or HP "mother may I?" when installing applications, and we shouldn't expect to have to do the same from our carrier or the hardware manufacturer.And if I spent $999 on some ridiculous piece of software, it's unlikely that comcast or dell would help me get my money back.