iOS app developer Jeremy Olson of Tapity has written an interesting article on how developers can survive selling apps and yep, paid apps are dead. (Tapity wrote Languages, Grades 3 and Hours, all available in the App Store.)
Olson cites anecdotal evidence that people are not buying apps in the quantities today as they did even a year ago. App downloads are healthy, but the ability to survive as an independent developer is in flux.
In-app purchases make up one revenue stream that has worked well for some, but there's still no guarantee of success. Olson cites a tweet from David Barnard of Contrast that lists "the four main factors that work together in a good IAP strategy: massive download numbers, high conversion rates, high prices and [recurring] revenue." Olson goes on to cite sales figures for Barnard's and his own apps.
Olson continues that he doesn't think IAPs (in-app purchases) are the answer for his company.
...we might need to think bigger and more creatively about how our apps generate revenue. It means we might need to start thinking about business models that go beyond charging users for the app.
He ponders the model of selling his apps to companies who might purchase them for corporate use, or include web and Mac integration. That, of course, means he needs a sales force and marketing, a whole 'nother can of worms in this writer's opinion. Olson thinks that if he thinks bigger, then he has a better chance of survival as an app developer. Maybe he's just falling into Apple's adage, Think Different...