That's a very interesting analysis. Apple is breaking even on the App store, and the idea is free apps cost a lot of money to host because of volume distributio

That's a very interesting analysis. Apple is breaking even on the App store, and the idea is free apps cost a lot of money to host because of volume distribution costs (as opposed to sunk one-time costs for having the store at all). If we assume this is true, then pay apps are subsidizing the cost of their free competitors.