What's Behind Free iPhone Apps and Sale iPhone Apps

iPhone and iPad apps go on sale all the time, which offers users great deals — whether it's 50% off a high price, the all-too-tempting 99-cents or a temporary drop to free — on some of the hottest programs. But the conventions that govern sales at regular retailers don't really apply to apps, which don't really have sale cycles, free shipping concerns or national holidays to figure into the pricing mix.

So to find out what drives the flow of apps from their normal price to a lower price, we went to app developers, publishers and experts. It turns out that there are plenty of reasons for apps to go on sale — but it's not just because the app developers want to give you a discount.

For the Reviews
When you go looking for a new app, the reviews by users are a big part of the decision-making process for most people, so developers want to make sure they have a lot of reviews, and positive ones at that. Chris Shireman the developer of the That Reminds Me iPhone app tells dealnews that there's an added bonus that comes from reviews when your app is on sale, specifically, "If they think they are getting a deal on the app, they are slightly more inclined to give you a better review."

To Top the Charts
Of course, right behind getting positive reviews is the desire to be listed in the Top Free or Top Paid apps in iTunes. This leads to loads of exposure and a spike in sales and downloads. There's also a benefit to being in the top listings in a specific category, such as travel or games.

Rob Woodbridge, a mobile industry veteran currently with Untether.tv, says developers turn to sales because "The only real leverage app developers have — after spending all that time determining what to build, laying down line after line of code and getting it accepted in the AppStore — is price. The power of being in the top 100 apps in a category is the lure. Being one of those 100 apps creates an incredible chain reaction that gains momentum, but it's hard to maintain."

Build Buzz While apps that are free for a short period of time can switch to paid applications, they can't migrate any top ranking they once had with them. So in exchange, there has to be a benefit to going on sale or going for free for a short period of time. Josh Michaels, one of the indie developers behind Ow My Balls, points to a detailed analysis of what happened when his app went on sale, which included a breakdown of the buzz that landed Ow My Balls a mention in the LA Times.

Michaels explains the reason for this buzz: "There are more than 100 apps and websites that highlight on-sale apps. As soon as you put your app on sale (free or not) these sites pick it up and start exposing it. Try putting your app on sale and then searching Twitter for it — within just a few hours there will be a bunch of posts. By cutting the price, not only are you improving the value proposition for the customer, but you are activating all of these sale apps that get you additional exposure. This is one reason you see apps that constantly change their prices. They are continually gaming the sale system."

To Make More with In-App Ads
Sure, many apps make their money on app sales, but others rely on in-app advertising, which leads to another popular reason to put their apps on sale.

Jon Stroz, the VP of marketing for Accella, an app development and marketing company, says, "Many publishers of applications want to see large download numbers for their apps. This is for several reasons: to generate income from downloads, but for others that have in-app advertising, they also want to see a lot of users interacting with their app, which means that they have to have a lot of 'installs' of their app."

To Lure Price-Conscious App Shoppers
Just as retailers use Black Friday to get shoppers in the door to buy things they wouldn't pay full price for, developers will use app discounts to get additional sales.

Erwin Mazariegos, founder of pTracker which develops political apps, explains the reasoning: "The importance and impact of putting an app on sale will depend on its regular price. In my case, most of my apps are priced at $9.99, which is entirely fair for the power delivered by the unique technology used (our users save significant amounts of time using our search technology compared with legacy technologies such as Google). That said, the iTunes app store rewards lower-priced apps, and some iOS users see apps priced at over $4.99 as extravagant. So I've run sales to entice those users who may be price sensitive."

While app deals and app sales usually offer a great deal for the user, sometimes the for-sale sign is nothing more than a clever ploy to trick you into buying.

Hussein Yahfoufi, president of Appsplit warns dealnews readers that "many apps have been 'on sale' since they have been released and the price has never changed." Yahfoufi speculates that many of these developers "believe that by having the sale banner on the app makes it more appealing for buyers."

Be sure to look at reviews or on sites such as dealnews to find out how much you're really saving on an app sale before you buy.