There may not be a tipping point. So don't count on the prices plummeting for the good apps in the near future. Pay if the app is worth it. Or wait forever.
Most developers found that the "race to the bottom" in iPhone pricing was a mistake, and aren't interested in repeating that mistake since it didn't make them any money (except for a tiny percentage of them). There's plenty of money to be made at more reasonable price points. For proof, note that the vast majority of apps on the iPhone "Top Revenue" App store lists are priced well above 99c. That's the goal of most experienced developers. Not 99c downloads.
I can't speak for developers on the iPhone, but as a customer I am very happy with the application pricing on the iPhone. There are plenty of applications on my iPhone that cost more than $0.99.
Games:
Oregon Trail, Super Monkey Ball (bought during the launch of the App Store), Worms, Grand Theft Auto: Chinatown Wars, and Civilization Revolution.
Reading:
Classics and Eucalyptus
Utilities:
NetShare, Air Sharing, PasteBot, and iDisk (MobileMe subscription).
Instant Messaging/Chat:
Beejive, IM+, Skype (has SkypeOut credit), and Limechat
Navigation:
Tomtom USA
There are also many great $0.99 applications on there too such as Koi Pond, Pocket God, Toki Tori, Atomic Web Browser, and so on.
The great thing about the iPhone ecosystem is the affordability of applications enabling your phone to do really amazing things. You see an application on a friend's phone and you can buy it right there on your iPhone straight out of the App Store. Low prices, high availability, and convenient access all make for a great buying experience.
The iPad applications suffer from a few different problems.
- The HD/for iPad syndrome.
Right now we can see many successful iPhone applications now scaled up and available for the iPad at higher prices. This is repeated over and over, but take Civilization Revolution for an example.
It is a great game for the iPhone priced at $6.99, but the same game with the same content featuring only minor UI tweaks is $12.99. I just did a double take on this.
I can't be the only iPhone owner with a new iPad balking at the pricing of applications I've already purchased which brings us to..
- The rebuy syndrome.
Apple puts developers in a tough situation. Do you make a universal application and give everyone who already purchased your application a free upgrade for the iPad? You don't have the capability of asking for $2.99 for existing customers and $9.99 for new customers except using in-app purchasing which is overly restrictive in itself.
I don't have a solution for the developers except to say: Only charge for the upgrade/separate versions if you offer compelling new functionality and not just a scaled up version of your existing application.
Excellent example of doing it right: IM+
They have made their iPad version free to everyone that purchased their iPhone application. It features a completely new custom interface (not even close to a few UI tweaks) with excellent functionality. I am using it now while waiting on Beejive to finish their version before I decide which to use permanently, but I digress.
They have offered their customers a tremendous value for the price while others have simply released what should be a universal app.
Excellent example of doing it wrong: Civilization Revolution
Their "for iPad" version of the game is both buggy and expensive. The type of game is certainly more appropriate for the iPad, but existing customers are forced to play it on the iPhone or rebuy it for twice the price on the iPad.
- The "because I can" syndrome.
This mostly applies to Apple. They showed the iWork applications on the iPad then opted to sell each application for $9.99 instead of including them with their very expensive devices. Where is the iPad's iLife software suite or value add first party software?
$9.99 isn't a princely sum and I did buy the app, but I don't feel I should need to.
That is my rant on this topic. Take it for what it is worth, nothing at all.