Xcode now costs US$ 4.99
Seeing this reminded me of a Microsoft focus group I was invited to be a part of a few years ago.  As a CTO who had decided to build everyone on top of free software, they wanted to know what it take to make me to switch to a Microsoft stack.  I told them they were 10 years too late.  You see, I made the decision to use LAMP stack not because it was cheaper, but because it's what I knew.  And the reason I knew LAMP stack was because that's all I could afford when I was 15.  The question for Apple isn't whether businesses or experienced developers can afford their development tools, it's the teenagers they should care about.  And while, $5 is still well within the average teenagers reach, it's still a lot more friction than free.  This decision seems short sighted to me even if the effects of it aren't immediately apparent.