The market for paid iOS apps isn’t dead:
For these “Big Six” apps, price is almost irrelevant. If your app is useful enough for many of its customers to use it almost every day, they’ll pay a decent price for it. (Not allof them will — but you don’t need all of them.) The challenge is either making your appthat much better than the alternatives, or finding new app roles that are that useful to a lot of people.
Marco certainly knows of what he speaks. Here’s my iOS main/home/first screen:
Seven of those apps are iOS-bundled applications: Phone, Messages, Maps, Calendar, Clock, Mail, and Safari. You can see that those last two are used enough that they’re in the omnipresent Dock; the other five are there out of convenience because I actually use them. (Most of the rest of the bundled apps are on that fourth and final screen since they cannot be deleted.)
But everything else is third-party, and of the other 17 apps, seven are paid: Instapaper (articles saved for reading later); Letterpress (addictive game); ESV Bible (duh); 1Password (invaluable password storage — I know very few of my passwords because I don’t need to know); Flashometer (inexpensive weather forecast app that has a flashlight function embedded in it); OmniFocus (task management — I might let you chop off a finger before I let this go); and Twitterrific (manage multiple Twitter accounts from a fun interface; I’ve used it for years).
Of those seven, three — OmniFocus, Twitterrific, 1Password — are indispensable and get used multiple times per day, while the other four are opened at least once a day. Marco has a Big Six; I have a Big Seven — and those dominate my home screen use, with the other nine + Folder getting more use than everything else. (Of the 12 in my folder, only two — Federalist Papers and Terminology — were paid, and I’m pretty sure those two were $0.99 or $1.99 when I bought them.)
Marco’s point is quite valid: for the people who need a niche app, they’re going to really pay for it. OF is $19.99, but I got it on an introductory/upgrade special; Twitterrific 5 is $2.99 and worth every penny; 1Password is $17.99 and worth every penny even if I did get it on an introductory price. There is price elasticity for me in all three applications — far more than the other for four sure.
Your use cases are going to be different than mine, of course. I use OmniFocus and 1Password on my iPhone because I’ve used the desktop applications for 2-1/2 and four years respectively. I’ve used Twitterrifc on the Mac since it first came out for free — it was one of the first third-party Twitter applications. I have brand loyalty because I have buy-in for these three, and this isn’t likely to be the case with you.
No matter your mobile OS, you’ll have must-have apps to fit how you handle things, and the chances are that you’ll be paying good money for those apps because you want them to live on. For people that use their phone past free gaming and Facebook, you’re probably going to end up paying something north of $1.99 for at least a handful of apps. This fact is what keeps the ecosystem running.