> So any transaction less than or equal to the $2.99 tier would be just as bad (as in, it costs you at least 30% of the list price), even if hosting was free.

It's true that App Store has the best deal for payment processing for very low-priced apps.

But that's not truly a win for developers when the App Store itself caused the "race to the bottom". Who was selling 99 cent apps before the crap store?

I remember that if I wanted to play anything other than Snake on my Nokia, I had to pay like $5 a game. And those games were even worse than the majority of 99¢ games on the store.

You can argue lower prices lead to more crap, but it also encourages people to spend more. Most people would debate a $4.99 purchase, but think nothing of 5 99¢ purchases if done separately.

I think I agree with Lap Cat here. There's a place for cheap apps, but the problem comes for people developing productivity (or worse, vertical market) software that's going to sell "mere" thousands of copies, or tens of thousands at best, rather than hundreds of thousands or more. If you sell 10,000 copies at $50 a copy, you've grossed well over a quarter-million even subtracting Apple's 30% -- but if you're selling on a platform where it's hard to price anything over $5, you may have a problem, because one-tenth the price is probably not going to translate to ten times the sales.

Those kinds of apps today tend to be part of a SaaS service and listed as Free in the App Store. Provided it’s B2B and not B2C - and you do signups and payments on your own website - then you’re exempt from the self-service signup (and 30% tax) requirements.

The catch is that as you get bigger and seem more B2C than B2B then Apple might start to take notice (see: Hey e-mail).

Well, I was thinking of things like media editing (or specialized text editing) and other apps, not all of which work well in a true SaaS model. On the other hand, it's significant that more and more of those have moved toward a subscription model...