I can relate to the disappointment of the others in that despite my very clear disapproval of making this a separate app (TBD if the difference is so profound that this couldn't have been considered an update/overhaul of the original v1)-- but my point is this:
Even with the indignation of having to she'll out more cash for an app I'd already paid for; at 99?, I would have humored the developer. For 99? I can see a justification if the app is that much better, but by time my confusion subsided (I had been waiting for an AppStore update and was looking up the original in the AppStore the whole time); like so many others I missed the brief 99? intro price that I would have given into.
IMO, they need to bring this back again for a day or two because it deals with a fundamental principle in economics-- reduction in profit margin per unit lends to increase in units sold; the opposite is also true.
For practical example, view how Blurays were first introduced (actually for years) to the market. They were ~$30 a piece and sales were few.
If we consider their cost to market is $5 per disc, they're working a 500% profit margin. Ok, but when they finally realized (these are professional marketers?) that if they took a pretty massive hit by reducing their profit margin from 500% ($30 movies) to a more reasonable 100% mark-up ($10 movies)-- what happened?
While they were selling say, 5 copies for every movie at $30; when they reduced that same Bluray's cost to $10-- sales soared.
They were selling on a far thinner profit margin, but this hit taken in margin was greatly overshadowed by the increased demand and amount of units sold!
Common sense to some; a mystery to others-- fact is, for every 5 copies they sold at $30, they sold 50 copies at $10.
It takes no genius to figure that, if given the overhead/cost is $5 per disc, the formula so goes:
(units sold * retail price) - (units sold * cost to market) = net profit
(5 * $30) - $25 = $150 - $25 = $125
(50 * $10) - $250 = $500 - $250 = $250
Now granted this is a very rudimentary and simplified demonstration of the principle; the fact to realize is by reducing profit per disc from $25 to a mere $5-- one's first inclination might be disastrous profit loss.
But in reducing this margin, consumer cost was drastically reduced, and thus demand and sales, conversely skyrocketed, boosting sales by 10x; and the end effect?
By cutting their profit margin to just 1/5 of the original, they increased units sold tenfold-- and the end result was DOUBLED PROFITS, DESPITE SHAVING PROFIT MARGIN TO 20% of the initial figure.
Price reduction increases sales volume and 9x out of 10, the resulting sales/profits overshadow any would-be loss by trimming profit margins.
This same principle applies directly here. If the app were offered at $1 instead of $4, how many extra sales would result?
How many people will not purchase this at $4, but would purchase it at $1?
I bet the numbers are significant enough to create the economic effect I just detailed, and would profit the developer greater than by simply leaving the price fixed at $4.
That also taps into the impulse buy phenomenon. You're far more likely to purchase a movie at $10 vs. $30, even if it's a movie you want to buy. $30 is often just a bit much.
But you will end up purchasing movies you had no intention of buying until you saw they were on sale for $10! You may not have even really liked the series, but you're bringing home "Beverly Hills Cop 6" because it was on clearance for $4.99! What a deal!
An impulse buy you made based not on need or want, but simply based on the perceived value/deal.
Same is true of apps. While $9.99 seems to be the "sweet spot" to get consumers to buy movies they wouldn't otherwise buy; so seems the 99? price point for apps. I'll buy an app for 99? without great torment or lengthy consideration. The same doesn't apply for apps $2.99, $3.99, $4.99+. I will take time to consider if it's really worth the money in these cases; deciding at least half the time, the answer is "no".
Developers need to be wise and take these phenomena into consideration if they want to maximize profitability. I think most are scared to take the risk? but without greater risk, there is no greater reward.
Reduce the price to 99? again and I'll pay your "upgrade fee" without an incredible fight. At $3.99? Not a chance; I went years without using v1-- I can live without v2 if need be.