Ed,

Any economist will give you a formula and/or graph for the perfect price 
to maximise profit, but that doesn't mean it can show you the price the 
market is willing to pay, especially an immature market such as the one 
that exists for android apps.

When you factor in free alternatives any pricing formula tends to go out 
of the window because you can't do relative pricing based on features 
when the alternatives have zero cost and are most likely adding features 
all the time (remember there is nothing to stop someone trying your app 
for <24 hours getting a refund then going to one of your free 
competitors and suggesting your additional features should be added into 
their free offering).

I also think you're going to need to wait for the problems in Market to 
sort themselves out. All of the time users are getting a poor experience 
for failed downloads, botched upgrades, and crashing copy-locked apps 
they are going to be wary of spending their cash, once Google have 
sorted those problems out then we may start seeing sales volumes 
increase in-line with users confidence.

Al.


Ed Burnette wrote:
> Here's a progress report: 57% of the poll respondents said lower the
> price so I cut it temporarily from $2.99 to $0.99 (1/3rd the
> original). In the short time since then, sales increased (2x), but not
> enough to make up for the price difference. See 
> http://blogs.zdnet.com/Burnette/?p=824
> .
>
> In economics class we had these nice graphs that would tell us the
> perfect price to maximize profit. Here it's more trial and error, with
> long delays before seeing results, and there are a lot more variables
> than just price.
> >
>   


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