Its an interesting post, but it seems to stop short of explaining the full situation. Apps are complementary goods to smartphones, but I imagine in the case of

Its an interesting post, but it seems to stop short of explaining the full situation. Apps are complementary goods to smartphones, but I imagine in the case of the App Store, substitution forces are more overwhelming in price determination. I say this because as a Windows Phone user, it was common to see higher prices for similar apps compared to other stores. The Windows Phone store having far few developers and thus far fewer substitutes. The complementary nature of the Apps can also work in the other direction. The more people who purchase iPhones and iPads, the more demand for the apps, which actually exerts upward pressure on app prices. The question is just what is more important to the user, hardware or software, and I think while the post makes one point, one could argue just as easily that the hardware dominates the decision. As with any econ problem, the forces at play are numerous, so this is no slight of the post, just some other factors to consider.