
For both iPhone and iPad the £3.49, £3.99, £4.99 and £5.49 levels are effectively non-man’s land, with very few apps in comparison to other price bands. A good example is the Business category, where to over-simplify apps are either free or really expensive. Specifically, free apps constitute 56% and £5.99+ 14% (refer to iPad App Share by Business Category , Q1 2011). This indicates that mid-tier pricing is a difficult proposition to articulate to consumers in terms of value. Strategically, it appears easier to build a proposition around free or entry-level price points to build an audience and monetization thru in-app purchasing, ads or other. It is also appears easier to take the simple stance that a given app and its content have premium value and the price is £5.99 or higher. For market opportunities with a significant market size and competitive apps in-play, I would suggest there is an opportunity to take that middle ground. As the install base grows and matures for iOS, there will be a growing segment of folks not looking for the all-singing, all-dancing £5.99 or higher apps or willing to waste precious time on free apps that may or may not really serve their purpose. They will be seeking the credible product that delivers results at a reasonable price point.
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