Marco Arment writes about the state of pricing and sales in the ever-crowded iOS market:
If you make another RSS reader or Twitter client, there are certainly a lot of people who could use it, but you’ll need to compete with very mature, established apps. Competing in these categories isn’t about price: it’s about relevance and attention. If you can’t find enough customers here, it’s probably not because you’re charging $2.99 instead of $1.99 or $0 — it’s because your app isn’t convincing enough people that it’s worth using over the alternatives.
For these “Big Six” apps, price is almost irrelevant. If your app is useful enough for many of its customers to use it almost every day, they’ll pay a decent price for it. (Not all of them will — but you don’t need all of them.) The challenge is either making your app that much better than the alternatives, or finding new app roles that are that useful to a lot of people.
Of course—and as he mentions—the poor design of the App Store doesn’t help people get noticed, but the point about breaking into established markets is something that applies everywhere IMO.