Average Price of Top 10 Apps in iPhone Top Grossing Apps List is $95 – Here’s Why…

I listened to an iPhone app developer discussing the rise in app prices a few days ago. But, now we learn that Distimo reporting that:

Research: Top iPhone Apps’ Average Price Is Falling

So, who is right? The answer is both may be right. Distimo is one of several companies that provide analytics tools for app developers to embed in their iPhone apps. Distimo’s report shows the average price of apps dropping across the board in iTunes stores in various countries. Another notable item in the report is that the average app price in the U.S. is the lowest of the six regions compared ($2.43 for the average app).

So, is the developer I heard speak wrong? Probably not. Distimo looked at the price of purchasing an app. But, there are other ways to “monetize” an app. Advertisement is the most obvious way. But, the in-app purchasing also provides an important revenue stream. This is how a “free” app like Zombie Farm can get into Apple’s Top Grossing Apps list.

There’s also a skewing factor when using a simple statistic like “average”. For example, the current average price of the top 10 apps int he Top Grossing Apps category is $95.49. That is right, the “average” is nearly $100 dollars. How can that be? It turns out that one app, IRa Pro” (a video survelliance app), is priced at $899.99. Enough people bought it to place it at #8 in the Top Grossing Apps list. And, if you take the mean (or average) of the top 10 apps int the list, this one high priced app throws it off.

However, that one $900 app aside, it does seem like big developers like Electronic Arts have been pricing their apps in higher price ranges (up to $9.99 or so) for the past year or so with dips right after the holiday buying season. I suspect we’ll see app prices climb higher after the iPad emerges and, perhaps, more complex apps (like Apple’s own iWorks) start to emerge.