From a users point of view, if everyone bought the forever licence, where is the incentive for the developer to keep pushing the product forward?
True if the market is saturated. However, I think there is plenty of potential to keep getting new customers, and there's your incentive.
If I were in that position and had to provide a lifetime license, I would think it reasonable to set the price at somewhere between 5 and 10 times the two year license cost.
Sounds reasonable to me, though the high end of the scale is getting close to my pain limit.
From a technical perspective, no one knows how long Android, IOS and Java will remain an attractive/interesting platform to use and develop on. In 5 years, there could be a completely new OS that takes over, Anywhere Software could develop a new B4 for that, and it could make B4a/B4i/B4j redundant.
Meh, no one can predict the future, in this market or another. I didn't know that Pontiac would be shut down when I bought my Firebird, yet it's still rolling on the road. I didn't know that Honda would shut down their local brand workshop when I got my CRV, but, if a generic workshop can't fix it, I just grind my teeth and drives 150 km to the next nearest workshop then drive 150 km back (this is assuming that they can fix it while I wait, otherwise it's a two person, two car, dual trip operation...). Yet, neither of these risks has stopped me from making these, rather large, investments. Sometimes, one just have to take risks.
All apps that we sell in google-play must be updated for the whole lifetime without being paid again.
Not really. We get happy customers, which tells their friends about our product, and their friends buy it, which means more happy customers. And so on.
I have a rule of thumb that one good sale with a happy customer nets you five more customers. If they as well are happy, well, apply the rule recursively.
On the other hand, my combined app sales has just about made me enough money to buy a pizza (which I don't understand, as they are solid apps, two in high competition areas and one more or less without competion), so don't take advise from me...
Edit: One clarification:
I'm not saying that the current policy is inherently bad, I just want another option as well.