Actually I believe it has cost Simplify Media money already. Software development costs are the most obvious,
It would have cost them to develop the software whether or not they gave it away. This is irrelevant.
and then unexpected server upgrades to handle the strain of 200,000 new users in 30 hours. Not to mention they originally planned to give away only 100,000 copies, but the downloads were so fast and furious there was no way for them to cut off at the limit (they had naively estimated 30 days to reach 100,000 users).
Arguably here what cost them money was not giving the software away but poor planning. I haven't been following this case, but I suppose you should include the cost of servers to handle the downloads. A negligible cost, generally.
With only daily sales figures available right now it was impossible for them to know what was happening until it was too late. That's a minimum of 100,000 lost sales at whatever their final pricetag is.
If their servers were handling the downloads they should have known exactly how many downloads were occurring. If there are too many, just shut off the server.
The number of lost sales, by contrast, is impossible to know. How would we know how many copies would have been sold if it wasn't free? If I give away free beer and 5,000 people show up at my front door, how can I say that 5,000 people (or 1,000, or 100) would have showed up if I had been charging $5 per glass?
Even if you want to support them and try to buy the app afterwards, Apple remembers you bought it and you just re-download it for free...
Presumably they knew this at the outset. Maybe they could set up a paypal account for donations... or just bask in all the free publicity from being the #1 app.
I do agree with whosyourtator that any app trying this should make it clear upfront when posted to the app store that it is free for x number of days or downloads, then paid. At least that gets rid of the shady line-jumpers
Agreed -- but more importantly, Apple shouldn't count free copies in its sales stats.