Are software prices coming down?

Most of us in capitalist societies would argue that competition is a good thing. Without the Mac, where would Windows development be? Without Safari and Firefox, what of Internet Explorer? Without the iPhone, would cell phones ever be truly useful? One obvious trend of note is that software prices, one way or another, are coming down.

It’s The Economy, Stupid

Former President Bill Clinton’s famous line notwithstanding, the economic woes of the past year are having an obvious effect on some software prices.

Recently, I’ve seen more bundles packages of software, including Apple bundling iWork and iLife with Mac OS X. When there’s too much month left at the end of the money then something has to give.

I’ll get an argument from a few readers, but most of us would rather eat than buy an new application or utility. The economy is having a downward effect on software pricing, though it is not as pronounced as you might expect.

When Adobe and Microsoft and Apple begin cutting prices, then we have solid confirmation that software vendors are doing whatever they can to spur sales.

App Store Blues

Depending on which numbers you choose, Apple’s iPhone App Store is a rousing success, a stream of green dollar signs for developers. A billion downloads. Nearly 40,000 applications, utilities, and games.

There is a lot of green rolling through the App Store, and more than a few success stories of part-time application developers striking it rich in the iPhone gold rush.

But prices? Compare software on other so-called smart phones or even other game platforms, and the App Store is a bargain basement of low cost. More than half of all apps, utilities and games are free.

There are plenty of them from 99-cents to $5.00, and I’ve bought a few at $9.99. But the trend is clear. Prices are so low, in general, that people are willing to try by buying the 99-cent version.

If it works, fine. If not, 99-cents isn’t that much to lose. I’ve downloaded over 230 apps, utilities, and games for my iPhone, which is maxed out at 148. Almost half are downloaded, bought, paid for, and unused.

Bundle Fever

A couple of years ago the crazy people at MacHeist brought a terrific bundle of Mac apps, utilities, and games at pennies on the dollar. It wasn’t the first bundle ever, of course, and it wasn’t the last.

MacHeist did it again last year to even greater success, which was followed up by recent MacUpdate’s bundles, and, this year, a newcomer, TheMacBundles. I’m sure more bundles are being planned.

The names may change but the system doesn’t. Upwards of a dozen Mac apps, utilities, games for as little as 1/10th the retail cost. Is that price reduction spurred by economic woes, fear, greed, or magic fairy dust?

Regardless, the trend the past year isn’t so much toward software vendors lowering their prices, as it is toward bundling software with the objective of increasing the customer base by which many of the new customers, with the next upgrade, may pay even more.

Bottom Line

Without question, the bottom line for Mac and iPhone/iPod touch users, is a rapidly growing base of software in the form of applications, utilities, and games—and lower prices, particularly so if you’re patient.

Unlike General Motors, which has hefty incremental product costs to match a weighty overhead cost, incremental software doesn’t cost the developer much, but customer loyalty may increase sales and profits in the future.

I have hundreds of software titles on both my Mac and iPhone. Hundreds; some I haven’t used for years, so I’m buying less, but what I’m buying is often costing less, thanks to bundles.

Is there a longer term danger for both Mac and iPhone users and software developers when prices are too low? The answer to that is an unqualified ‘yes.’ Software developers need to be profitable. After all, just because the U.S. government owns most of General Motors doesn’t mean we’ll all get better cars at lower prices.

How do you save money on Mac or iPhone software? Be patient. Shop carefully. Look for bargains, cross grade updates, renewal incentives, and, increasingly, bundles.