Pricing an iPhone app is a strategic process. This article goes over the price points and revenue models that are commonly used for iPhone apps.

$0.99 - $1.99 "Impulse" Pricing Model
About half of the iPhone apps in the Top 100 cost $0.99 and there is a direct reason for this. It is because this is the price in which users are most likely to make impulsive purchases for an application that looks appealing. We recommend using this model when your application simply "nice to have". These are applications are are mildly entertaining, solve a very basic problem, and were easy to create. But also keep in mind that low priced iPhone apps need to be of high quality to gain consumer interest.

$4.99 - $6.99 "Premium" Pricing Model
Most of the applications in this price range are games that provide the user and experience that aren't able to get with lower priced applications. Obviously, the application is much more complex and of higher quality than lower priced iPhone apps. People often pay top dollar for brilliant design or crystal-clear intuitive graphics. This basically means these applications usually focus heavily on user interface graphics, to give it a more professional feel.

Non=game apps that succeed at a higher price level don't usually have a extremely unique use or highly intensive design, they simply solve a problem better than any other applications. This price point is basically the premium price point. It is meant for applications that are of higher value than the impulse apps.

In addition, we recommend that any application priced over $4.99 should have a trial version to go along with it. This will let users try out the application and help them make a decision of if the application is worth the money. Even if people don't always buy the app, they definitely will create some sort of buzz if the iPhone app is a quality one.

$7.99 to $9.99 "Leader" Pricing Model
To place an application in this price range your application basically has to be far superior than all other applications in its category. It must do something, and do something better than any other application by a long shot. We recommend this price range for large software companies or establish iPhone development companies.

Over $10 "Specialized" Pricing Model
This pricing model is only recommended for individuals or iPhone development companies that have an expertise in an industry and really have an understanding of how much their target market is willing to pay for an iPhone application. This model also can be used for software companies as an extension of their already existing product. For example, if your company already has a solid customer base, you could consider creating an application at this price point and marketing it to your already in place customer base. These individuals already have a clear understanding of the value your application will give them and are more adept to purchase a higher priced iPhone app.

Overall, there is a lot that goes into pricing your iPhone app. We recommend that you do you research and understand the advantages and disadvantages when pricing your iPhone app. Price it too low, and you could be missing out on serious revenue. Price it too high, and the same thing happens. The trick is to do it just right, and with the help of this article we hope you have a clearer understanding of what goes into properly pricing an iPhone application.