yes, the freemiun model using the In-App-Purchase is another way to solve the problem.
But from my experience it does work only for some kind of apps.
In case of educational game apps for kids, parents does not like the IAP model because let free the kids to buy the next levels or apps add-on without control.
This issue is a claim point with Apple on security to buy by IAP.
From coding point of view, you have to implement IAP and Ads both in the app and you have the vantage to have only one project to manage for next releases, bug fixes etc.
Sincerely I have not idea on what of the 2 models is more profitable!
I have done some work for an app that use IAP model with no ads, they have a huge number of free downloads but very little numbers of purchases!
http://itunes.apple.com/it/app/move-the-wood/id512581697?mt=8
Ale [import]uid: 30847 topic_id: 26992 reply_id: 109656[/import]