Discussing the $1 business model!

Today morning, I read an interesting blog by Gabor Torok on Forum Nokia Blogs, talking about the so called $1 business model.

If it was a decsion for me - to sell my application for a meagre price of $1 or less, I simple wouldn't. I believe that there are strategies you need to make and follow if you really want to sell your application. (Because in a country like China and India - non of the common people would buy software. As said - Indians and Chinese would never buy your software, however they would use it to the full (The cracking of applications has dominated the market - no one wants to buy an application/software/game - even if you give it for $0.5 - but free software is always welcome - even if it might contain trojans)

The facts that interests me are the following,
"The typical revenue models for developers are as follows:
* Release free application first with limited features and make it paid when it really gets traction (thousands, tens of thousand downloads per month). The application is available either for free or as paid-for (exclusive OR). Question: won't people turn away from your application once they have to pay for it? · Write an always paid program, which means that your application must be really cool and advertised so well that despite the price (i.e. that it costs money) people buy it. Question: can you compete with free programs with similar features? · * Make a Lite and Pro version of your program, Lite being free and Pro paid. The free version supports a subset of Pro's features making it compelling enough to purchase the paid version. It is a very typical approach among developers. Notes: increased maintenance efforts + separation of free and paid-for features must be well thought-out. ·

* Free program with ads. Notes: Not all people like ads You need to find a good ad provider It is challenging to implement a good advertising solution on mobile devices, and there is no good framework available. ·

* Change model dynamically on an experimental basis: see if you can make it with paid version, if not then make it free, then make it paid again when it becomes popular (this is the path iStrip followed, actually). Question: when will people get bored with this behavior?"

I disagree with the concept of having a light version with limited features, as mentioned in the first 2 points. Once you have such a model - no one would buy your application - all would use the lighter version. Trial versions are better relatively (mind - relatively), imo.

Advertising - this is the upcoming industry even in the period of financial crisis. However, in regard to mobile devices, the factor of openness comes into the picture. You make an application - buy ads - implement the code (like in google adsense) and its done! That should be a role model. I haven't seen such flexible models yet - enlighten me, if you know any. I think the manufactures and operators should invest more on this (applies more to the latter).

So would you sell your applications for $1 (out of which you might end up with 50%, distribution channel takes the 50%)