The app store for ios has exerted massive negative price pressure on apps, including creating a norm of free or $1 apps. I know it's basic psychology, but it still amazes me that tons of people using a $200 phone that costs on the order of $80/mo to use bitch endlessly in reviews and negatively rate apps for charging the ginormous price of $3. Or something equally out of line. This is exacerbated by shitty discovery in the app store. There's massive returns to being on the top app in category X list, and that's very difficult to do at higher prices. Plus you can't create paid upgrades without creating a new product in the app store, forcing you to start from zero with marketing and list rank. I predict the mac app store will likewise exert downward price pressure on app prices.

Sparrow is really really cheap. A generation ago I used eudora, which cost $50 to $100, for email. So between the mid to late 90s and 2012, the price fell something like 80 to 90 percent to $10 for the mac program. The above is worsened by the rise of decent free email clients since it diminishes the audience.

If you do the math, you have to sell a fuckton of $2.10 cent apps to afford salaries for good developers: say four people at $200k/year fully loaded (salary, health insurance, ss, medicare, office space, internet, diet coke, coffee, macbooks). That's 380k sales just to tread water. And we didn't deduct marketing expenses which are probably significant: you'll have someone fulltime doing seo / sem / banging on blogs and reviewers to get organic / etc. Plus, again, Apple has created a norm where apps get updated forever for free. So that $2.10 is close to being a lifetime value for a user. That means you probably can't use sem for user acquisition: a wildly optimistic 10 percent clickthrough and purchase rate (an order of magnitude high for most things) and 20 cents per click (also wildly cheap) puts you at $2.00.

I presume Apple does this because of classic economics: increase demand by decreasing the price of complements. But if developers can't get paid, users can't have nice things. And I'm not an ios or mac dev, but looking at the interactions in their apps, they seem super custom. That means you have to go to the bottom of frameworks, increasing development costs.