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I heard this question asked a lot - most recently on BBF so I posted ... 3rd Party BlackBerry Software forum

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    colabnet's Avatar
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    Lightbulb Why 3rd party BB software costs $20.00 per unit

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    I heard this question asked a lot - most recently on BBF so I posted this response there - I'd love to hear comments on it from fellow stackers as customers and as software publishers.

    Speaking from a publisher point of view, there's just not as many potential customers available as there are for other platforms as yet - this is changing fast though.

    Here's an interesting scenario:

    Say there are 200 million windows users out there (low estimate I think)
    Say there are 4 million blackberry users out there (close probably)

    Of course it costs money to build products - say it cost $10,000.00 to build a product.

    In order to just "break-even", the publisher will need to sell about $20,000.00 to sell the product on places like Handango etc. This is because their rate for listing can be almost half of the unit cost.

    So to recover the $10,000 spent to create and the $10,000 needed to sell:
    @29.95/unit = 668 copies need to be sold
    @9.95/unit = 2011 copies need to be sold

    Let's look at the potential customer for a minute - let's say the product for sale is a mileage tracker etc. Say 1 in 2000 people are interested in mileage trackers, this means that for the BlackBerry, you have now have only 4,000,000/2000 = 2000 potential customers - if you charge 9.95 or less you will go broke even if all 2000 people buy it - who has 100% download to sales conversion out there?

    On the other hand, for windows, at 1 in 2000 people being interested in the mileage tracker, you still have 200,000,000/2000 = 100,000 potential customers from which to convert downloads to sales and this means you might break-even at 9.95 per unit (provided more than 2 downloads in 100 yield sales). So it's easy to see how the number of potential customers available affects pricing.

    I acknowledge this is a very simplistic look at this topic - but I think it might help you see why software products for BlackBerry cost on average $20.00 per unit.

    Regards,
    Last edited by colabnet; 08-08-2006 at 05:37 PM.
    Collaborative Network Technologies Inc.
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    55 Bond Street, Suite 103,
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    Re: Why 3rd party BB software costs $20.00 per unit

    I understand where you are coming from on this. I think another way to describe it would be supply and demand. Either way, you make good points.

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    Re: Why 3rd party BB software costs $20.00 per unit

    I agree with supply and demand. Thanks for the post colabnet, your a cool guy.

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    Re: Why 3rd party BB software costs $20.00 per unit

    ~via BB (wap.pinstack.com)~hmmmmm nothing with trying to make some money. Why else would someone go thru all the troubles of making a program just to break even or loose money for that matter

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    Re: Why 3rd party BB software costs $20.00 per unit

    I'm all about the fact of making money!!! Thanks for the explanation!

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    Re: Why 3rd party BB software costs $20.00 per unit

    ~via BB (wap.pinstack.com)~
    I have no problem paying $20 or $50 or $100 if the benifit outweighs the cost. Great points!

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    Re: Why 3rd party BB software costs $20.00 per unit

    ~via BB (wap.pinstack.com)~

    I completely agree. And, without being irreverent, I'm a bit weary of posts of users wanting "free" anything.

    I'm not a software developer, but I understand that you can't give away your work for free, unless you're volunteering.

    personally, I've made my own mp3 tones/tunes from song an movie clips, and I'm not about to go and give them away! First, copyright issues (I am slightly moral, to an extent). And secondly, why would I want to lose my unique rings and tones because I gave them all away for free on the web?

    I find it quite ironic that a BB user will pay a hefty sum for the device (or sign a long term contract), and become "cheap" after that.

    And why is Windows so expensive, considering market share? Because Microsoft must hedge in the known loss due to theft. So the law-abiding buyers are paying double or triple what the software is worth, because there are so many people out there getting it for "free".

    And, when it comes to anything that is free: you get what you pay for.

    But that's merely my humble opinion.

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    Re: Why 3rd party BB software costs $20.00 per unit

    Great Post and a lot of good comments. But another thing consumers don't understand is the reason a program costs $10,000 to develop, which for comercial software, is cheap. You have to cover the costs of the Systems Requirements Engineer, Programmer, Software Quality Assurance Engineer, S/W Configuration Admin and Integrator/Testor.

    In addition, there are the Requirements Definition, Algorythm definition, Coding, Unit Testing, Module Testing and Integration Testing that has to be planned, coordinated, scheduled, performed and documented. Then you get into code correction, regression testing and integration all over. Finally, there's the Markiting Costs, Documentation Costs and Support Costs that all have to covered, just in order to break even.

    And that doesn't even take into account the fixed costs of facilities and capital equipment, nor the recurring overhead costs related to energy, benefits and facilities, health and product liability insurance.

    And I'm sure I've left a lot out.

    Hope this helps
    Rcbjr.
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    Re: Why 3rd party BB software costs $20.00 per unit

    So Everyone Support Colabnet By Checking Out Their Products!

    Berry Pix 2.0 is a GREAT program!

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    Re: Why 3rd party BB software costs $20.00 per unit

    Here Here! I'm another that will pay for useful product. I wish there was more out there. Hats off to 411 for keeping his amazing product free.

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    Thumbs up Re: Why 3rd party BB software costs $20.00 per unit

    Quote Originally Posted by N8DBB
    So Everyone Support Colabnet By Checking Out Their Products!

    Berry Pix 2.0 is a GREAT program!
    Thanks guys I really appreciate the support! I certainly wasn't fishing for that with the post - but it sure is cool to get

    I just felt it would be nice for bb users that are not in the development industry to have a feel for how software might be priced and to get feedback on it - the response has been great!

    Thanks again!
    Collaborative Network Technologies Inc.
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    Re: Why 3rd party BB software costs $20.00 per unit

    Oh, I know you weren't fishing...Trust me...Had I not believed that you had a very worthwhile product, I wouldn't have written that. Berry Pix is best Pic Program I have used hands down.

    Do you guys take requests?

    Have 2 for ya...

    A: A program that can automatically change the background images.

    B: A program that can edit profiles to include the editing of the height of text:
    Example...I use a very small font so that I can see a lot of stuff on my screen at one time. But it would be nice, if with the click of the trackwheel and a new profile, all of a sudden the text was larger so that when I am driving, I can put it in my holder on the windshield and not have to squint or take the BB out every time something came in just to read it.

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    Re: Why 3rd party BB software costs $20.00 per unit

    Quote Originally Posted by N8DBB
    ...

    Do you guys take requests?

    Have 2 for ya...

    A: A program that can automatically change the background images.

    B: A program that can edit profiles to include the editing of the height of text:
    Example...I use a very small font so that I can see a lot of stuff on my screen at one time. But it would be nice, if with the click of the trackwheel and a new profile, all of a sudden the text was larger so that when I am driving, I can put it in my holder on the windshield and not have to squint or take the BB out every time something came in just to read it.
    Thanks N8, really nice to get new product ideas - our own imagination only takes us so far.. will be discussing at next product meeting for sure
    Collaborative Network Technologies Inc.
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    55 Bond Street, Suite 103,
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    A1C 1S9

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    Re: Why 3rd party BB software costs $20.00 per unit

    Quote Originally Posted by ljbyar
    Here Here! I'm another that will pay for useful product. I wish there was more out there. Hats off to 411 for keeping his amazing product free.
    Berry 411 is defintely one the of best programs for blackberry out there - free or otherwise
    Collaborative Network Technologies Inc.
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    Re: Why 3rd party BB software costs $20.00 per unit

    ~via BB (wap.pinstack.com)~
    That's how I explain it to evyerone I know supply and demand is very important now since we are coming closer to the. Future as a computer tech I receive customers that have a bootleg/fake windows os on their pc... I guess people are used to freebies now in days

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