You're problem with Apple was that you saw your 'deal' with Apple beign: 'We make an app,' 'You promote & distribute it. If it sells, we split it 30/70.'
Now you feel conned because you didn't get the implied exposure. You didn't get a fair shot at grabbing a couple of those who 'happened to be browsing,' get the appropriate number of comments, etc.
You imply that your deal with Apple is: 'We do the product & price it. You do the promotion & distribution.'
BTW, I think you are correct & this is your deal with them. But I think this puts you on the same side as the letter writer & on the opposite side to jfarmer.
I think the App Store is mostly about distribution, with the only marketing benefit being the usual ones that come with being a distributor, i.e., it's in the interests of the distributor to promote the products its distributing.
But in that framework everyone prices their apps according to the distributor's whims. In this case that means all prices tend to zero.
The only way to break out of this cycle, as I see it, is to take the marketing portion into your own hands and draw in people from outside the App Store.
I think is important to look at the macro question: If you are looking at the market as a whole (all the apps that get bought) will most of the discovery/purchase decision have taken place within the confines of the app store (where Apple rules) or outside of it (from word of mouth to TV ads).
I think you might agree that most (or at least a significant portion) of apps will get most of their 'promotion' within the confines of the app store. This is both because of the distribution monopoly & because of the market mindset. Consumers are often buying 'apps' not 'app X' or even 'app that does X.' There will continue to be a big number of App store browsers making decisions based only on the things they encounter in this environment. Therefore, the app store is the no. 1 promotional channel as well as the only distribution channel.
Since Apple is the main influence on this, the letter makes sense. If you think that this environment is problematic on the whole, Dear Steve is your answer.
I guess I agree with you from an individual perspective. I do not know enough about this market to have a real opinion. But it seems rational to say to developers: "Do not go after the main part of the market (let's keep calling it the ringtone app market). The way Apple has set up the market, there is a tendency towards the ringtone apps. If you do not want to sell them, you still have other options. Base your strategy on those option."
But I guess my point is that the advice you are giving is 'be unconventional' which is not something you can expect everyone to do. It's like telling online merchants not to base their e-commerce strategy on Adwords/SEO or telling a supermarket not to go after middle income families. That might be good advice, but it's niche advice.
You're problem with Apple was that you saw your 'deal' with Apple beign: 'We make an app,' 'You promote & distribute it. If it sells, we split it 30/70.'
Now you feel conned because you didn't get the implied exposure. You didn't get a fair shot at grabbing a couple of those who 'happened to be browsing,' get the appropriate number of comments, etc.
You imply that your deal with Apple is: 'We do the product & price it. You do the promotion & distribution.'
BTW, I think you are correct & this is your deal with them. But I think this puts you on the same side as the letter writer & on the opposite side to jfarmer.