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3/16/2011
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Apple's Mac App Store Delivers

With a fourfold increase in applications since its launch in early January, Apple's Mac App Store is working for some developers.

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When Apple launched its Mac App Store on January 7, 2011, developers worried that Apple wanted too much of their revenue and withheld too much about customers. They worried that Apple's submission requirements apps would be too restrictive and would limit traditional software industry business models.

Is it worth giving Apple a 30% cut of revenue to host and distribute your company's Mac software? For many developers, the jury is still out. And that's as it should be. It will take months, if not years, to fully understand how the app store model pioneered by Apple and adopted by just about everyone else in the software industry affects the business of selling applications.

Nonetheless, developers appear to be convinced the Mac App Store has its place. In just ten weeks, the Mac App Store has seen its inventory of apps rise from around 1,000 to over 4,200.

The Mac App Store does away with some truly annoying aspects of software, like licensing restrictions that limited software to a single installation on a single computer. Programs downloaded from the Mac App Store can be used "on any Apple-branded products running Mac OS X that you own or control." The Mac App Store also takes much, through not all, of the effort out of installing software updates, a necessary improvement over traditional desktop software rituals in the era of always up-to-date cloud-hosted applications.

But the Mac App Store also tosses some useful conventions, like demo software and paid upgrades. And it interferes with the relationship between the software vendor and the customer.

For TechSmith, maker of Snagit and Camtasia, the trade-offs seem to be worthwhile. The company's $99 video editing and screen recording software, Camtasia, went live in the Mac App Store on February 11, 2011. The result has been a 22% increase in sales. Mac App Store sales now account for 25% of the product's total sales.

Jody Burgess, VP of TechSmith's desktop products business unit, says it's too early to tell whether this trend will continue and acknowledges that some of Camtasia's success may be due to the high level of exposure it has received from Apple. The software is listed in the Staff Favorites section of the Mac App Store. Such recognition can't be bought, at least legitimately, and is known to boost sales significantly.

"One of the main reasons we were attracted to the Mac App Store to begin with was it was a non-traditional channel," said Burgess. "It's an opportunity to reach a new set of people who might not be hearing about our product."

And the Mac App Store delivered in that regard. Burgess says customers acquired through the Mac App Store hailed from places where the company has done little if any marketing, like Australia, the Slovak Republic, and Taiwan.

But selling software through the Mac App Store is not without issues. Burgress says that the Mac App Store does not allow customers to purchase software upgrades at a discount, something most longtime users of desktop software have come to expect. She adds that her company has provided Apple with feedback about this.

"The thing that's really different is we don't have direct access to the customers," said Burgess. "It's kind of difficult for us to sell software and then not have access to that person. We feel a little bit disconnected."

Still, she says that she understand why Apple is taking this approach.

TechSmith submitted Camtasia in part to learn about the Mac App Store and what Apple expects from developers. The software was submitted three times before it was accepted. Burgress says the first rejection was because the software used private APIs and the second was because the company's engineers had overlooked the presence of third-party APIs in the Camtasia code. In all, it was a five-week process, one that Burgess characterized as a positive, learning experience.

The Mac App Store may not be right for every application or vendor, but Burgess says it has allowed the company to reach new customers without cannibalizing existing sales. And that's worth something, perhaps even 30%.

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