Most indie iOS pricing decisions are made on vibes. "It feels right at $4.99." "Everyone in our category charges $9.99." The decision deserves more rigour than that. Here is the working framework we use across the Tappa portfolio.
The four pricing models
There are essentially four ways to make money from an iOS app in 2026:
- Free with ads. Hard. Crowded. Not our model.
- One-time paid. Honest, simple, but caps your LTV at the price.
- Lifetime unlock. A single in-app purchase that removes restrictions forever.
- Subscription (monthly, annual, or both).
Plus the hybrid: a free tier with a subscription unlock for premium features, sometimes with an additional lifetime option.
We use the hybrid for most apps in the portfolio. RedRate is the exception — small price, one-time unlock, no subscription.
Step 1 — Calculate your CAC
CAC is what it costs you to acquire a paying user. If you do paid ads:
CAC = ad spend / paying conversionsIf you do not (yet) do paid ads, your effective CAC is the opportunity cost of the time you put into ASO and content. For early-stage indies, assume $3–8 per paying user as a working CAC.
Step 2 — Calculate your minimum LTV
For your business to be sustainable, LTV must comfortably exceed CAC. The traditional rule is LTV / CAC > 3.
For a subscription:
LTV = average subscription length × monthly price × (1 - refund rate)If your annual subscription is $40 and your average user keeps it for 1.4 years, your LTV is roughly $56 — which gives you about $18 of CAC headroom at a 3:1 ratio.
Step 3 — Pick the price by working backwards
Do not pick the price first. Work backwards:
- What CAC can you realistically afford?
- What subscription length do you expect (be conservative)?
- What price gives you a healthy LTV / CAC?
If the math does not work, the answer is to either:
- Reduce CAC (better organic, cheaper ads, better conversion).
- Increase price (often the easiest lever).
- Improve retention (the long game).
A note on price perception
Users do not benchmark your price against your costs. They benchmark it against the value they expect to get. A $3.99/week subscription on a serious productivity app is sometimes underpriced; the same price on a casual game is offensive.
Know your category's price ceiling. It is set by the leading apps. You can charge slightly above the leader if you are visibly higher quality. You can charge well below if you are explicitly the budget alternative. The middle is dangerous.
A note on annual vs monthly
Annual subscriptions are dramatically more profitable than monthly. Lower churn, lower payment processing relative cost, and users feel less monthly friction. Make annual the default. Show the per-week math.
Across the Tappa portfolio, annual subscriptions account for roughly 3x the LTV of monthly subscriptions on the same app.
A note on lifetime
Lifetime is a useful tool. It captures revenue from users who would otherwise churn out of any subscription. We typically price lifetime at 2.5× the annual price. Some users want to own. Let them.
What we do not do
- Hide cancellation in a maze. The unsubscribe flow is in iOS Settings, not our app, and we do not pretend otherwise.
- Use fake "limited time" offers that are not actually limited.
- A/B test prices on the same user over short windows. Apple does not love it and users notice.
The right price is the one your math defends and your users do not refund. Run the numbers, then ship.