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Apple Questioned About Netbook (Again) and App Store Pricing and Rank Lists

Tuesday July 21, 2009 2:57 pm PDT by Arnold Kim
Apple has concluded their financial results conference call which detailed Apple's financial results for this past quarter. The conference call included the usual mix of questions about Apple's future performance as well as hopeful questions about Apple's future plans.

Given Apple's recent decision to drop prices on their portable line, several analysts asked Apple if they had reconsidered entering the netbook/low-end market. Apple's response was the same as always, indicating that they felt the $399 and $499 netbook market held sub-standard products with poor user satisfaction. Apple insisted again that they would only enter the market if they felt they could offer a product they were proud of.

The most revealing tidbit coming out of Apple, however, was the fact they revealed they were "working on" different App categorizations in response to a question about the "race to the bottom" pricing found in the App Store. At the moment, Apple's Top 100 ranks offers the highest profile marketing channel for iPhone and iPod touch applications.

These Top 100 ranks are based on unit sales rather than revenue and are therefore skewed towards lower priced applications. As a result, apps have had to compete with lower prices in order to try to boost their exposure on these lists. Critics of this system have argued that this encourages a "$0.99 economy" which will prevent companies from investing in higher quality titles for the iPhone and iPod Touch.

Apple revealed that they are "looking for ways to categorize apps differently" and that there was "opportunity for further improvement and [they] are working on that".

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