I agree with raising the price up a bit for this app - a security app that sells for a lower price gives off the impression that it's not very secure (imho)
I second itsprofitbaron's suggestion that a focus on product is definitely the path you want to take. Don't let competition deter you from an opportunity you believe is there. However, you should at least take the time to play around with what your competitors have to see what they're missing and get inspiration on what you can do to make a better product.