The App Store grows, and app prices continue to shrink

It's been two months since Apple added its Top Grossing category to the App Store, a move presumably intended to deflect criticisms that the storefront's growing proliferation of bargain-priced iPhone and iPod touch applications made it impossible for pricier, more complex software to stand out. So far, the plan seems to be working--as of this writing, the number one application in the Top Grossing chart, Navigon's MobileNavigator North America, retails for $89.99, and the countdown also includes MobiTV's NBA League Pass Mobile (which offers pro basketball fans live coverage of more than 40 games per week throughout the regular season for $39.99) as well as four games--Asphalt 5, Rock Band, DOOM Classic and The Sims 3--priced at $6.99 each. It's worth noting that the number three spot on the Top Grossing list belongs to the Disney game JellyCar 2, which also tops the Paid Apps list--priced at just 99 cents, the title is clearly doing gangbusters business to rise so high on both charts.

But just because the Top Grossing countdown turns the spotlight on some of the App Store's costlier applications doesn't mean that average application prices are on the rise. According to appshopper.com sales data reported by SmartMoney, the average price of the App Store's top 100 bestselling premium applications dropped 16 percent year-over-year in October, falling from $3.11 in October 2008 to $2.59 last month. There are multiple theories behind the trend, among them increased competition--there are now more than 100,000 applications in the App Store--as well as Apple's decision to extend in-app microtransactions to free applications, effectively incentivizing developers to offer their software for free or next to nothing in hopes of cashing in on premium content, subscriptions or digital services. Whatever the reason, it seems to be tougher than ever for developers to generate significant revenues via App Store downloads.

At least the App Store submission process is getting a little easier. Apple this week updated its Developer Center website to enable coders to track the status of their software as it makes its way through the App Store approval maze. Citing reports from iPhone developers, AppleInsider notes Apple has broken down App Store approvals into nine status levels, including "In Review," "Ready for Sale" and "Rejected," indicating to programmers where in the process their software presently stands. Developers were previously kept in the dark until their iPhone app was either approved and added to the App Store or rejected.

The change is nevertheless too little, too late for Facebook developer Joe Hewitt: He's vowed to quit building apps for the iPhone, blaming Apple's approval policies. "Time for me to try something new," Hewitt writes on his Twitter page. "I've handed the Facebook iPhone app off to another engineer, and I'm onto a new project." TechCrunch reached out to Hewitt to clarify his comments, and he said "My decision to stop iPhone development has had everything to do with Apple's policies. I respect their right to manage their platform however they want, however I am philosophically opposed to the existence of their review process. I am very concerned that they are setting a horrible precedent for other software platforms, and soon gatekeepers will start infesting the lives of every software developer." No word on what Hewitt will do next, but he's left an indelible imprint on the App Store: Facebook remains one of its most downloaded applications ever--about a quarter of all iPhone owners use it, and more than a year after the social media app first launched, it's still in the Top Ten. Of the Free Apps chart, of course. -Jason