Given the incredible progress and innovation we’ve seen in mobile apps over the past few years, I’m not sure we’re any worse off at a macro-economic level, but things have definitely changed and Sparrow is the proverbial canary in the coal mine. The age of selling software to users at a fixed, one-time price is coming to an end. It’s just not sustainable at the absurdly low price points users have come to expect. Sure, independent developers may scrap it out one app at a time, and some may even do quite well and be the exception to the rule, but I don’t think Sparrow would have sold-out if the team — and their investors — believed they could build a substantially profitable company on their own. The gold rush is well and truly over.
via App Cubby Blog – The Sparrow Problem. There is a real problem going to occur with regards to the App Store and desktop/mobile software in general if pure software businesses aren’t able to sustain themselves in the long-term. Apple can get away selling software for cheap thanks to hardware profits, what is the option for software only firms?