I find it disingenious to claim apps don't need to be free, when you built a successful app that already has followers (thanks to the lite version also...) and is highly regarded in tech spheres. Would he have done his experiment on a new app with a new concept, it would have a lot more credibility.

I actually downloaded the lite version a long long time ago, and I wouldn't have if it wasn't free.

Update: btw the 'Read it later' link is broken in the OP, it should be http://readitlaterlist.com/ .The app developper should really buy the readitlater.com domain if he can...

It's all about the funnel.

For 100% mobile apps, intelligent marketing is nigh impossible since there is no funnel- Apple doesn't tell you impressions v conversion rate of app pages.

Without that information, apps that are 100% mobile, with no web component, cannot market effectively.

Apps with web components, on the other hand, can measure the rate of online signups to app purchases, and optimize accordingly.

Mobile only products use free apps as a lead-gen tool to convert to paid.

My company is moving to the web model, simply so we can implement effective marketing, without a clear RPU and conversion rate.

If you're building an app this is important to consider.

With in-app purchases apps are no longer either "free" or "paid". A lot of apps that are "free" allow you to download and install for free but you have to purchase a subscription to actually use any of the functionality of the app. Others will only let you get so far before having to in-app purchase the rest of the application.

In-app purchases have just replaced the old "lite" and "pro" versions of apps that existed a year ago. Back then every app had a free version that upsold to the paid version.

Paid apps can definitely do well, but performance will differ by category.

The free version is important as a trial: I would never have bought instapaper if it were not for it. What I think, though, is that perhaps what most paid apps need is a way to do "shareware": allow the user to try for a day or a week, and then let apple block the app from working until the user buys it. There are a lot of apps that I would buy under this model that I don't due to fear/uncertainty/doubt (and in-app purchases for features don't really work for the same reason that I never know if those features are actually worth the cash, unless it's "pay me to stop bugging you with ads", which is really annoying).

Maybe that's the case. However I use Read It Later because I got a taste of it with the free version, and it's normally $2.99 or 99c on sale. Instapaper has no free version anymore, and it's always $5.

Instapaper may do just fine without me and other users unwilling to pay $5 for an infrequently used iPhone app, but the fact remains that he handed his competitors a dead simple & easy way to compete. Considering almost every app at this point has built in support for both services, it might be worth thinking about how to compete now before it's too late and developers can get away with only supporting Read It Later.