As reported previously, turn by turn navigation apps are allowed since the release of iPhone OS 3.0. In our previous post, we outlined the rankings of these apps in the different countries. Since most of these apps compete for the US market, we analyzed the rankings of these apps in the US:

GPS Navigation apps in the United States

The first two navigation apps appeared the 17th of June (G-Map U.S. East and G-Map U.S. West, both $24.99). The most popular one however was Gokivo ($0.99 plus $9.99/month), which entered the Navigation Top 100 (Paid) at the 2nd position, and stayed there for seven days. On the day Gokivo lost its 2nd position, AT&T Navigator was made available in the App Store and immediately going to the 4th position in the navigation category.

Of course, all of these apps want to be the most popular. Moreover, a high ranking increases the visibility of your app, and in turn should increase downloads and revenue. These apps however use different pricing strategies for achieving this goal:

• All of the apps were published in the paid section, except for AT&T Navigator which is published in the free section. When consumers download the app, AT&T will charge a fee ($9.99/month) on the monthly bill. Although this is noted in the description and title, consumers are used to apps in the free section being free (of course), making it likely that consumers buy the app without knowing it comes with a subscription fee. Additionally, and maybe even worse, in the application description AT&T notes that “Deleting the app from your iPhone does not stop the monthly subscription charge. To cancel the subscription and fee you must go online at att.com/directbill or call AT&T at (800) 331-0500.” Of course, consumers will not look at the description of the app, after they used the app for a few weeks, in order to find out that they actually need to call AT&T to cancel the subscription.
• XRoad Co., the publisher of G-Map U.S., charges a seperate fee of $24.99 for both of their apps (U.S. East and U.S. West).
• Gokivo costs just $0.99, however, real-time GPS Navigation costs $9.99/month.
• MobileNavigator Europe charges a simple one-time fee of $94.99.

We will be monitoring the App Stores to see if similar pricing strategies will be adopted by other app developers. We are especially interested in whether Apple will react on the pricing strategy adopted by AT&T…