Which purchasing option is best - Free+IAP or paid?

Solution 1:

I followed up with a couple of developers of such apps that provide these two purchasing options.

It turns out that the sole reason that a second standalone purchasing option is offered (rather than just sticking with a single app with an IAP) is for those people who use Family Sharing.

As I alluded to in my question, IAPs don't work across Family Sharing so purchases that way wouldn't be reflected across all the devices you share.

If Apple didn't have this restriction, then a single free app with IAP would work for everybody - however because they do, then it doesn't.

Solution 2:

In App-Purchases

This option is particularly useful for long-term use: the App itself is free, this makes it easy to spread to as many users as possible. But then, in the majority of this type of Apps, there are ads implemented which make a huge profit to the developer based on how many users watch them, and as said in then point before, the App is free and this allow users to get it very easily.

Thus, people tend to make IAPs because they usually allow them to get useful stuff in the App (like in a Game) which will grant them many advantages respect the normal free users of the App.

Paid Apps

In this case, I think the App Store has points in advantage as people tend to spend money more than in other platforms. Thus, paid apps, tend to appear more premium, and as they cost money they are extremely well designed and cured in any tiny details in order to make that little price be worth.

Summary

In App-Purchases are great to earn when you're probably a beginner and need money but need customers, this way you can spread your Apps and get rewarded!

Paid Apps instead are a great way to serve great products to customers in return of money. People usually love such Apps 'cause they are "Pay once and Play" and thus they have no boring ads.

Solution 3:

Paid version of an app lets a business or organization pay for many copies one time. That way dozens or hundreds or thousands of employees don't need to handle expense reports or associate credit cards. This is especially important in school settings where pupils might never be expected to have payment for a school owned device.

Also paid apps work better for MDM and VPP programs to manage all the licenses programatically.