Saturday, August 22, 2009

Moneyraker: Plunger, Mum's house

TomTom have released their iPhone GPS turn-by-turn navigation app.
It's $99.99.
This price was chosen because, as we all know, the customers won't realise it's almost $100 if you keep it down to double digits.
Stupid customers.
Regardless, I think $100 (or thereabouts) is a bit steep (or "effing vertical!", rather) for any iPhone app, no matter how useful. If they sold this thing for $20 or even $50, that would make sense.
But let's face it: I'm a little biased. As somebody who wants to buy a GPS app but doesn't want to pay $100 for it, of course I would take issue with what they're charging, especially if it's more than I want to pay.
TomTom, on the other hand, probably think it's a bargain based on how much R&D went into it, how much they have to pay for license fees for all the maps, and the fact that they won't sell any hardware with it. $999.99 would be a much fairer price for them.
So, as a compromise between FREE! and infinity, maybe $100 is okay. A compromise is only a compromise if both parties are dissatisfied.
But we're forgetting about the third party here: Apple. I'm sure they are well satisfied. They get to kick back with an ivory martini and laugh uproariously at how the App Store has made them billions of dollars out of a market that didn't even exist a year ago. Whether TomTom charge $1 or $1000, they'll still be flipping through catalogues for a solid gold moneyrake for the rest of the year.

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