> So you can sign up for Dropbox directly and they get 100% of the fee or you can sign up through Apple and they get 70%. That might be more than their entire profit.
(Emphasis mine) Sounds like it might be time to find a new business plan, then.
(Emphasis mine) Sounds like it might be time to find a new business plan, then.
I would be surprised to find many software products where the gross profit margin would be less than 50%.
Software and service prices seem mostly arbitrary to me anyway.
How else Aperture went from $300 to $100, Lightroom the same, BBEdit shed 70% of it's price in one day, etc etc... Same, why was iWork a $99 package and now it's 3 components are $10 each on the Mac App Store?
Services are more deeply and negatively affected by price changes than software, though. A price change that seems insignificant to you can drive many users away. Look at the fiasco with Netflix last year; they changed their prices by about $6 and subsequently lost about a million subscribers within a few months. Some users see price increases as an indication of a service's instability in the marketplace (and therefore a cue to jump-ship). Most users have lower tolerance thresholds for price differences when comparing services than they do when comparing one-time purchases (like software).
Regardless, now would be a really bad time for Dropbox to increase their pricing. Many Mac & iPhone users are watching iCloud closely and realizing that it could make Dropbox redundant for them. A price increase, even one as small as a ~$30 a year change for their 50+ plan (corollary to your $3 a month change), could push enough users away from the service that Dropbox is better off sticking to its guns.
If your competitors can offer lower prices and still give away 70%, then you're not competitive enough.
create a subsidiary.
dropbox.com, charges $x for 5GB
idropbox.com, a dropbox company, optionally in the caymans, charges $(1.3 * x) for 5GB and has an app.
They've rigged the game.
No, I know of that rule. Just jack the price everywhere --if the iPhone is an important market to you, that 30% is a factor you have to take into account in your overall pricing strategy.
The same holds true for all of your competitors, after all. Either they give up the iOS market, or they have to do the same. So it's not like someone has an advantage over you.
( And, I'd say, if it IS an important market to you, well, you don't get to both have all those customers with their credit cards at the ready in a system someone else built out of thin air AND complain that you have to give him a cut).