I think there's something that's different about the App Store, which is basically the same as on the Internet: the barrier to entry is very low. In something

I think there's something that's different about the App Store, which is basically the same as on the Internet: the barrier to entry is very low. In something like the Console gaming business, there is a huge barrier to entry. Making a copycat game happens, but they are few and far between. It takes a lot of time and money to create a game. Since it does take such an investment, everything is generally thought out much more and markets are analyzed carefully before moving in. On the iPhone, the barrier to entry is much lower, allowing copycats to crop up very quickly and flooding the market and driving down prices. With a coffee shop there is at least a significant barrier to entry, while it isn't as much so with the App Store. The same thing has happened on the Internet. It is very hard to make a for-pay site because there are so many others which are willing to offer similar services cheaper. This has lead to most sites on the Internet being free or mostly free. For example, look at on-line newspapers. Many of them aren't able to turn much of a profit on-line because they have to compete with many many other sources of news that are free. You could argue that the more expensive items are better and so will attract users, but I think the Internet has taught us that a lot of people will settle for a lot less as long as it is cheaper.