Just prior to iPhone 3.0 there were rumors that Apple would introduce a Premium App Store which would let high quality apps in the $10 or $20+ range enjoy some breathing room away from the “race to the bottom” pressure of the current cheapy novelty app crowd. Why is this still a good idea? Well, AppCubby has run the numbers and it looks like $5 (down from $10) is the new ceiling for App Store apps:

With the average price in the App Store now at $1.39 for games and $2.58 for all apps, the App Store is killing the value perception of mobile software shoppers. Some would argue that this is just market economics at work, but I think there is a very strong case to be made for Apple being directly responsible for this trend. Whether they did so deliberately or inadvertently is still up for debate, but either way, the future of iPhone platform and of the entire mobile software industry hinges on the direction Apple takes with App Store 2.0. The downward spiral in app prices caused by the Top 100 list and Apple’s relatively hands off approach during the first year of the App Store has created completely unrealistic pricing expectations that may haunt the entire mobile software industry for years to come.

The logic is this: if developers can’t earn a fair living making great iPhone apps, they aren’t going to make great iPhone apps. (Think about it, would you work day and night if you couldn’t feed your family at the end of the week?)

Gizmodo adds in the gaming angle:

There’s no easy solution to this, which means that iPhone users shouldn’t expect much more complicated games than what’s already on there now. All the talk of the iPhone competing with the DS or the PSP in terms of quality may be moot if there’s nobody there to spend the effort developing that level of games.

We here at TiPb have long held that we don’t mind paying higher prices for higher quality apps. Why? Because we want them, we love them, and are happy to support them so we get more and better for years to come. The iPhone itself isn’t cheap and the idea that we can’t afford $10 (or more) for an amazing new game or innovative new app is just ludicrous.

Apple mentioned on their Q3 2009 conference call yesterday that they had room to improve on the App Store. A Premium App Store (or App Store Plus, or whatever name it goes by), perhaps combined with Craig Hockenberry’s idea of a premium developer membership, could be a great place to start.

Dieter gave us our first eyes-on look at Sygic’s Turn-by-Turn GPS solution for the iPhone 3G, but we wondered if Apple — whose iPhone SDK specifically forbid providing such navigation — would ever allow it.

Seems Sygic thinks they will:

Sygic is entering the AppStore to be the first on the market that offers full turn-by-turn navigation for Apple users. “We believe Apple users will benefit soon from Sygic Mobile 2009 turn-by-turn navigation worldwide – the same as all of our customers on different platforms” said Michal Stencl, CEO and founder of Sygic.

Could this be part of a new Premium App Store launch later today? Our tipper, antonioj, seems to think it will…

Only 2 hours left, so be sure to join us for our live meta-blog coverage and hopefully we’ll find out together!

Our guess is that the buildup to this Tuesday’s iPhone OS 3.0 Preview will be filled with rumors, new and old. Speaking of old, Wired has just dusted off the Premium App Store (or App Store Plus) story from back in January. While that story focused on Premium Games, and Wired re-enforces that focus, they all suggest there could be a wider range of content:

This “velvet rope” section of Apple’s store could feature software programs that cost $20 or more, making it friendlier to publishers whose products are too complicated to be created in one developer’s spare time. That change would make the App Store more friendly to game publishers, as well as enterprise software companies such as SAP that would otherwise prefer to focus on the more business-user targeted BlackBerry phones. BlackBerry is expected to launch its own app store, called the BlackBerry App World, later this month.

I would pay $20+ for an app that was worth $20+, and if separating those apps off from the $0.99 fartsnjiggles crowd helps developers pay their bills while making what we hope are the Next Great Apps, more power to them.

The question then becomes, what’s worth $20+ to you in an iPhone App?