You make it sound like there's no money to be made in Apps, but that's clearly obvious to not be true. Switched to freemium with In App Purchases is the model I see every where, and I am constantly amazed at the fact that $0.99, $1.99, etc are paid multiple times by the user to the point that they could have bought a AAA console new release with the IAP paid.

These apps also include ad sales to the IAPs. The money no longer needs to come from the initial download.

We made the switch from paid, to ad driven, to freemium/IAP for our in-house games.

Zynga was one of our biggest clients. Hasbro came in second. As well as a few white label advergames (eg. Vans shoes). We rarely made more than a small cut on profits (if that) and were generally paid upfront and on delivery.