Gizmodo’s John Herrman has a long, smart post up about the economics of the iPhone App Store, the seemingly endless price pressure that makes most apps really cheap, and what it all means for iPhone developers and iPhone owners. (The section on GPS navigation apps is especially interesting–one of the reasons that many of them don’t read street names out loud is because it’s tough to charge enough to implement that feature.)

We’re still early enough in the history of iPhone apps (and apps for other mobile platforms, all of which will be heavily influenced by iPhone developments) that it’s impossible to know for sure how this will all play out. The happiest outcome, of course, is if iPhone owners buy apps in such massive quantities that developers can build outstanding applications and make tons of money on apps that don’t cost much. I’m optimistic about that happening. But I’ll feel better when it’s clear that prices have stabilized at a level that justifies the development of ambitious apps–and that an exceptional program such as Tweetie 2 can go for a thoroughly reasonable $2.99 without causing controversy…

 
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