No matter how hard you try, or how much you work the free apps almost always outrank you.
What can you do?

If there are any frustrating aspects in the competitive landscape software, the race against free applications is surely in top three. Some developers are so deterred by the possible competition from free apps that give up even before the beginning.

Of course free apps have done a lot of good to the market and who am I to complain as long as I'm writing this on LibreOffice in Ubuntu? I am not an enemy of the free app. I just want to explain those that need revenue from their work that there are means to compete with the free.

Unfortunately the initial model of the free products in software has profoundly changed and the “free” app has become lately a cover for big cash-flow companies to gain important market share and keep competition away. Once this step took place and the client is captive a “pro” version appears, functionalities seem to dissapear and you realize that free is no longer free. Just as well, at a certain level, common sense will tell anyone that some apps require to much resources to be free.

Free vs Paid Apps in Apple iTunes

	Apps	Games	Total	% of total
Free	436404	79132	515536	58%
Paid	300451	70139	370590	42%

source: www.148apps.biz

Learn from the mistakes of free apps!Free apps come with no warranty, they can fail creating only annoyance or make the user lose important data. Those risks might make the client realize that the price of free is more they can handle.

The app may be free but the developer still needs some revenue for the rent and food. This eases the way in for advertising. Having all sorts of ad banners pop in front of their eyes can be a very effective method to repel clients.

Eventually free apps might actually drive sales of your app because the user might end up disappointed by free apps.

Differentiate yourself in functionalities, graphics and communication!
If money is one of your objectives than I suggest a thorough analysis of all you competitors. You should come up with a list of features and functionalities. Your app must provide more and better functionalities and features.

Aesthetics

Before any feature proves its utility for the client you should steal their eyes. The list of products in history that had gorgeous design and some not-so-great functionality or reliability is never ending. I'm not suggesting that you should trick your customers with eye-candy and provide little functionality since this will surely turn against yourself.

Help the client use your app and learn more effective use of your tool

Create tutorials and manuals for your clients. Create video tutorials, and show what your application can do and more than anything how to do it easier. Communicate with your clients. Give them means to express, to ask for additional features, to get improved experiences. There should be easy-to-use means to contact the app developers and prompt reactions to client feedback.

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