The major updates V3 to V4 are not free.
1Password 4 for Mac is a free upgrade for users who purchase from the Mac App Store. This is _only_ for the Mac App Store. For background, this was an offer we made when we initially made the Mac App Store version available. It's an ongoing thing now.
1Password 4 for iOS version is a paid upgrade (a separate app) from version 3 with an introductory price of $7.99.
So, if you purchase from the Mac App Store while it is on sale, you are effectively getting 1Password 4 for free. Only for the Mac.
Remember, we cannot bundle iOS and Mac apps together. So they are separate products.
1Password 3 is not being abandoned on Mac or iOS. We will continue to support it and provide bug fixes. They won't be receiving new features, but we aren't going to leave existing users without any options. We want you to be happy and as a result we will continue to support 1Password 3 for iOS and for Mac even after 1Password 4 is released. It changes nothing for those products.