We know that freemium is the business model that is taking off for apps. Here is Eric Johnson of Temple Run explaining how it worked for him:
Most people don’t know that [Temple Run started as a premium game.] They think of it as a free game, but that’s how we launched it, because we had never done freemium before. If you’ve spent five months of your life working on something, it’s kind of a scary proposition to put it out there for free. [After we made it free], it snowballed into this viral hit and the in-app purchases way exceeded what we would have made from the paid game.