iphone app store’s in app payment: changing everything?

Apples new development which allows purchasing to be make within applications could become a significant change for the appstore revenue marketing.
Until now, apps were either free or paid. If you donwloaded the light version, you had to make a second download to upgrade to the paid app. Now, it can be done within the app itself. This seamlessness will undoubtedly encourage the take up of paid apps. At the same time I think it has good potential for the app consumer. Hopefully app developers will be more likely to offer free, lite versions as the upgrade option is simple.

However it goes further than that. The new move means that subscription and additional content can be sold through the app using micro payments. It will be interesting to see how this will affect the sales and revenue from istore apps.

There is a flip side to this though. According to MobileCrunch, however, the motive may have more to do with piracy prevention than anything. There is no doubt that pricay, or cracked iphone apps is a problem for developers. Many of them see 70-80% of their app usage coming from pirated copies. The in app purchase means that the app will require a unforgable receipt in order to run. These are authenticated on an app store server. Of course the problem is that it will require a data connection in order to run the app each time. Certain apps, such as single player games do not require any further connections. With the new system trying to use them on the London Underground, for example, will make them obsolete.
With a highly vocal anti-DRM movement out there, it could perhaps do more harm than good to the iphone appstore.

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