The App Store has thousands of free apps. Some of them are 100% free and rely on advertising to get revenue, while others offer in-app purchases. Posting a paid app is not such a popular choice for developers because paid apps attract fewer downloads than the free ones.
For some apps, in-app purchases prove to be a more effective revenue stream than charging for the app upfront. But that doesn’t apply to all apps – for some of them choosing the paid model pays off (pardon me for the pun).
When you change your app pricing model from free to paid, expect to see a significant drop in downloads. For some countries like Russia and Mexico your downloads may drop by more than 90%. Watching that is scary, but keep in mind that a lot depends on the country. For example, Swiss users are more willing to pay for an app than Brazilian users.
When you change the price to $0.99, there are good chances that your revenue will increase despite the drop in downloads. That usually happens because your app starts attracting paying audience while users who never intended to spend money within your app simply disappear.
Of course, these observations are very general and the actual results depend on the type of your app and the country where most of your downloads come from. Some countries are extra sensitive to the app becoming paid and only give negative results, whereas countries like Australia and the UK often react positively to the change and your app starts earning you more. The best solution is to perform careful research and apply the price change to only those countries that are expected to react positively.
