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If you look in the app store you will find tons of free apps. Some may think that free apps are a waste of time but I assure you they can definitely lead to financial success with your other apps.

Use this price point when you are trying to:

- Build your app development portfolio.
If your just starting out in iPhone development, this would be a great way to showcase your skills and let others know that you are fully capable of developing quality iPhone applications.

- Release a trial version which could lead to paid version sales.
This can be extremely effective for cheap games, that have addictive properties. If you let people get a taste of your app and they enjoy it, it is very common for them to want more and be than happy to purchase the full paid version.

- Supporting another product.
If you sell a service and want to offer additional ways to use that product. Building a free iPhone app is a great way to increase customer usage.

- Generating a base for future sales conversion.
The more people use your apps, they more likely they are going to buy one in the future.

- Use it for advertising
This can be extremely lucrative if your app is downloaded enough. There are also a lot of services available now that makes advertising in your app easier than ever.

Free apps are definitely capable of generating income, you just need to know when to use them.