I listened to a talk by a game developer last week, and their thrust was exactly in this direction. The app is free and revenue is made from in-app purchases.

I listened to a talk by a game developer last week, and their thrust was exactly in this direction. The app is free and revenue is made from in-app purchases. The basic app is structured so that upgrades are infrequent, because of the time lag. However, the app connects to back-end servers which contain much of the smarts of the app. Thus they can upgrade them whenever they like, without having to upgrade the app. Then can also introduce premium features to be sold with the existing in-app purchases. How you achieve this in a non-game setting is a challenge, but I believe it is the key.