I'm puzzled by the psychology too. It seems counter-intuitive that people who pay a relatively large amount for the device + monthly contract would balk at paying an additional relatively small amount for an app which increases the utility of the device.
I'm not 100% satisfied with any of my explanations. Here's a few ideas I've been pondering: the $80/month can be thought of as a subscription fee for the apps that come with the device. So I'm paying $80/month to use Phone, Mail, YouTube, Maps etc. The amount of time I can use my iOS device is limited by time spent at work, with family etc. Therefore adding new apps into the mix reduces the time I spend with the default apps. For example I might download a game and spend a month playing that and ignore the YouTube app. But now my "monthly subscription" for the YouTube app has been wasted. Say I use 10 of the default apps regularly. That's $8/month for each app. Ignoring YouTube app for one month means $8 down the drain.
So when I'm deciding to buy your $3 app I'm subconsciously wondering if it's worth $11. And that's if I only use it for a month. What if your app is really great and I use it and ignore YouTube app for 10 months? Then I'm paying $3 + 10 * $8 for your app.
Now take into account $200 for the device + $80/month is a lot for most people. And it's a lot relative to the free basic flip phone + $30/month w/o a contract we all had in the not too distant past. Now it's clear why free throw-away apps are the easiest to download. Free implies no additional upfront cost in addition to the arm + leg I'm already paying. Throw-away app implies I won't ignore the other $8/month apps I'm already subscribed to for too long.
It's just a theory and I'd like to hear some counter-arguments. If it's true it could have interesting implications on tweaking value and price of apps with the goal of maximizing revenue.
I'm not 100% satisfied with any of my explanations. Here's a few ideas I've been pondering: the $80/month can be thought of as a subscription fee for the apps that come with the device. So I'm paying $80/month to use Phone, Mail, YouTube, Maps etc. The amount of time I can use my iOS device is limited by time spent at work, with family etc. Therefore adding new apps into the mix reduces the time I spend with the default apps. For example I might download a game and spend a month playing that and ignore the YouTube app. But now my "monthly subscription" for the YouTube app has been wasted. Say I use 10 of the default apps regularly. That's $8/month for each app. Ignoring YouTube app for one month means $8 down the drain.
So when I'm deciding to buy your $3 app I'm subconsciously wondering if it's worth $11. And that's if I only use it for a month. What if your app is really great and I use it and ignore YouTube app for 10 months? Then I'm paying $3 + 10 * $8 for your app.
Now take into account $200 for the device + $80/month is a lot for most people. And it's a lot relative to the free basic flip phone + $30/month w/o a contract we all had in the not too distant past. Now it's clear why free throw-away apps are the easiest to download. Free implies no additional upfront cost in addition to the arm + leg I'm already paying. Throw-away app implies I won't ignore the other $8/month apps I'm already subscribed to for too long.
It's just a theory and I'd like to hear some counter-arguments. If it's true it could have interesting implications on tweaking value and price of apps with the goal of maximizing revenue.