I think there is a very real difference between 0.something and 1.something. $1.49 is an "awkward" price, that is not as obviously "as cheap as we can make it".

I think there is a very real difference between 0.something and 1.something. $1.49 is an "awkward" price, that is not as obviously "as cheap as we can make it". In the iOS ecosystem there is something of a race to the bottom in pricing, where everyone is competing to have the most widely used $.99 app. I can see how Microsoft considers this to devalue the app ecosystem: a system where apps compete on both price and value is more healthy than a system where 50% of the paid apps are at $.99 and everyone competes on visibility.