Both apple and google don't support 'pay for upgrade' model. Its either subscription or pay once. Of course, you can roll out your own payment gateway(which apple has further issues with) or re upload the app under a new v2 name, but those are not very satisfactory solutions.

There is a way to provide upgrade pricing for iOS. It's an ugly hack though....

2015 - you sold v1 for $5.00

2017 - you start selling v2.

You sell v1 for $5.00 but in the description tell everyone not to buy it.

You sell v2 for $5.00 but direct people who have already bought v1 to buy the bundle of v1 and v2 that you price at $8. Anyone who has already bought v1 can buy the bundle for $3.

and now, you have v3. The bundling will grow exponentially!

It’s quadratic, not exponential. For N versions, you have prices:

  N * (N + 1) / 2

It is likely that you could reduce to something approaching an upper bound of 2*N, as with version 8 out, you can drop support for a discounted upgrade from v2 to v4.

I stand corrected!

>or re upload the app under a new v2 name, but those are not very satisfactory solutions.

Not very satisfactory, but very prevalent.

And, I'd say, given the low price of apps, it might be just right to not offer any special discount for an upgrade. You could always reward older users some other way.