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I suspect the developers are taking the hit in the name of free publicity. I know that when Marco Arment allowed Apple and Starbucks to give away Instapaper, he didn't receive any compensation.

When I saw this link, I expected that Apple was making their apps (e.g. Pages, Keynote, Numbers) free ahead of the anniversary of their App Store. Apparently, that's not the case.

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Thanks and yes, that's what I thought - was looking forward to grabbing a free copy of numbers for iPhone - ohwell

I've heard from other ios developers that the added exposure tends to cause huge effects later on in sales though. So it might not be so bad for them?

From hearing about the free deals though it doesn't sound like it ends up a losing proposition. Can anyone thats done one of these free/featured apps on the store validate? I'm super curious now.

I've done free deals in the past, and sometimes it works out nicely. Getting lots of downloads tends to move you up in the charts and search results, some of which lasts when it moves back to paid.

There are also obvious benefits to having more users such as more word of mouth, more (hopefully good) reviews, etc.

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