[ashu]

A website would require marketing, but an iPhone App does its own marketing, through its name

This is a myth. And people will realize in a couple months once there are tons of apps in the App Store. You will need marketing wherever you go. For word-of-mouth, your app needs to be really stellar. And that is true, everywhere.

I suspect the more appealing part about the App Store is that more people will want to actually pay for your app right away if you provide them with enough quality. It feels like the expected payoff with the App Store would be higher for individual developers this way as opposed to making viral apps on facebook and monetizing via ads.

[tstegart]

I don't think its a myth. Apple really has done a lot of the marketing on behalf of developers. Everyone iPhone user knows where to get their iPhone apps. Just that right there is huge. Yeah, you still have to work hard outside the store, but setting up the location, the trust (no need to worry about Apple) and the ease of use is a marketing marvel that webapps just don't have. I think its hard to ignore the advantages. Going above and beyond that will help you immensely, but at least you don't have to replicate Apple work.

[ashu]

Well, I can't deny all of this because it's true. However, it is not very useful ultimately since everything is relative. Everybody on the App Store gets these advantages. Yes, there is a central location to look for but when you have thousands of apps and you are not in the top few, you are essentially back to the user already knowing about your app.