Will everything be free on the App Store?

Creating an app is a painful process, it takes long time and you would believe it deserves to get some reward and a price. One thing when you start thinking about pricing an App is that you can't escape having those wild billionaire dreams where all users will pick up your app and you'll end up purchasing a beautiful island somewhere.

All app developers share the same dream

Before approaching any fancy real estate agency and putting option on a Ferrari, you will need to pick up your pricing model. Choices aren't that large even if Apple pricing matrix offers up to 87 tiers.

Setting the starting price for your app seems to offer lot of flexibility. You can either:

Option#1: Go for an upfront price ($0.99 and above)
Option#2: Go for a freemium model ($0 and selling in-apps)
Option#3: Go for upfront + in-apps because you are very confident
Option#4: Go for free because fame is the reward you are looking for

Option #1: For some obscure reason, someone at Apple decided to make prices start at $0,99 and by doing so made completely useless about 70 tiers above $10. On iPhone, prices have already got down to $0.99 and as Richard Gaywood stated it, it looks that there is very little room for prices above that tier.
The iPad has been somewhat preserved from the cup of coffee syndrome but there are very few apps above the $5 tier. I see a few reasons to this deviation from the iphone apps price behavior:

- The iPad reaches a different kind of public than the iPhone (families, business people) who sound more able to pay for an app that's worth it
- There are less apps for iPad than iPhone and competition has not been as fierce as on the iPhone market

Overall I think there is a market on the iPad for the moment but looking at the way iPhone market has evolved I am pessimistic and Option#2 is likely to become the standard.

No escape from the freemium model?

Option #2: The freemium model will probably become a standard in the months to come. Most of the games have already gone that way and with increasing pressure on boosting downloads, going free seems the way to go (check out this incredible experience). With a broader customer base, In-Apps purchases make sense, provided that they come with a service.

There are however 3 limits to this model:
- Customer behavior may evolve with the increasing amount of junk apps around. They may become suspicious at free apps and may be willing to pay if they see a point in getting your app.
- What has value has a price, everyone knows there is no such thing as a free ride. They know that there is a price to pay at some point either with in Apps or with no maintenance.
- Customers are zappers: they get an app and for a large majority of them, they just forget about it after a few hours, making In-Apps just inapt.

So big question is: are we doomed? 

Unsustainable business model will bring everyone down

Everyone needs to make a living. There are less and less investors on App Store start ups and many developers are giving up because it's just not sustainable that everything goes for free. Price war is like nuclear war, at some point everyone loses. Even Apple will start to worry (at some point) because what makes iPhone and iPad competitive is the number of apps available. And with an unsustainable business model, who will develop apps?

Conclusion and I am asking Apple here: why not make possible a 30 days trial on every app? It will give customers more confidence in what they buy and developers a reason to compete!

It's not that hard to do and cannot be more complicated than the pricing matrix!