Expensive Apps Will Ruin Microsoft's Windows Marketplace

News Analyis: Microsoft is saying that its Windows Marketplace for Mobile store should feature applications that are more expensive than those offered in competing stores. That's a problem both for the software giant and developers. Developers might like the idea of making more money from their mobile applications, However, the Apple App Store has already set the price point with its 99 cent applications. It's hard to see how Microsoft's plan to sell applications for $5 or $10 is a formula for success.

Microsoft's mobile app store, Windows Marketplace for Mobile, hasn't even offered a single application for mobile phones and already it's causing a stir. Even worse, it's making Microsoft look foolish.

At a conference with developers this week, Microsoft told those on-hand that the 99-cent application shouldn't find its way to its store. The software giant believes that developers are selling their apps too cheaply simply because some other stores (yes, that means Apple's App Store) have created a culture that dictates low prices.

"We would definitely want to promote that you make more money selling applications than selling your application in a dollar store," Loke Uei, senior technical product manager for Microsoft's Mobile Developer Experience Team, told mobile application developers earlier this week. "I know, 99 cents is interesting-yes, consumers like to pay 99 cents for applications.

"But 99 cents, come on, I think your app is worth more than that."

I hate to sound cynical, but I have a newsflash for you, Uei: no, they're not.

The app price debate

I find it extremely ironic that a company like Microsoft, with so much cash in its coffers, is encouraging developers to charge as much as possible for its applications. You would think that a company that has been that successful would understand that application pricing matters to both the developer's bottom line and Microsoft's.

Regardless, app pricing needs to be as cheap as possible. We're not buying applications for the desktop that we will use often. We're not buying Photoshop. We're buying simple applications that can be loaded onto a mobile phone to provide a limited amount of usability.

For the most part, those apps are designed to satisfy a desire in a moment. Do you want to find a local restaurant? Use Yelp to help you out. Are you looking for some contact information for a couple friends? The Facebook app is for you. Are you interested in updating your Twitter stream? Use TweetDeck. Each of those apps can be downloaded from Apple's App Store at no charge. Would anyone really be willing to pay $10, $5, or even $1 for those programs? Of course not.

The same is true for all those paid apps, currently offered at 99 cents, that Microsoft hates. Market pricing is decided by the demand for the product. What will end users be willing to pay to have a particular app?