Last week Apple reversed policy and made an announcement regarding a change to now allow free apps the option of supporting in-app purchases via the Store Kit. It remains to be seen how the change plays out, but I suspect it’s a win for consumers and Apple and something of a mixed bag for developers.
Previously, the revenue model in the app store was narrow: paid apps could continue to charge; and free apps needed to stay free. This produced a bounty of “lite” apps where developers would strip out functionality from a paid app and offer it for free in order to entice consumers. While it’s hard to gauge the affect of this duplicity, the previous policy undoubtedly has lead to a fair amount of app bloat in the store as developers released multiple versions of the same app.
For developers, the older model required maintaining a completely different app or conditionally building source. Both choices require additional testing and support. Now, the code can be unified but the burden shifts to adding and integrating in-app purchase features into the app itself. While the APIs are pretty straight-forward, the UI experience isn’t and each developer (based on their needs) will need to create a meaningful interface within their title and do a bit of bookkeeping to manage purchases.
While this announcement benefits newly arriving apps, it leaves those functioning under the older model somewhat out in the cold. Given multiple apps with similar functionality, wouldn’t a consumer rather try the free app over the paid one at least initially? One could argue that nothing precludes developers using the current approach of multiple releases and in some cases, it may still make sense.
However, it puts further pressure on developers to deliver more substantial content to consumers in a free format as the download rate of free apps is typically significantly higher than a paid app alone – especially given the market saturation. With nearly 100,000 apps available at the moment, my suspicion is that this will make competition amongst 2nd tier developers more fierce but largely leave the major developers unaffected. I can’t imagine we’d see a free version of an app from major commercial developer who’s price points hover well north of the $0.99 median of most apps. Maybe that’s a good thing, as there are a plethora of shovelware apps out there already.
By encouraging in-app purchases, Apple helps to reduce the App Store clutter and duplication of effort in approving multiple titles. Further, each in-app purchase nets Apple another 30%, which for the providing a distribution mechanism and platform, starts to seem pretty steep. I can see why the music industry balked a few months ago at Apple’s cut and renegotiated the terms. While the major studios had a reasonable block, I can’t see that happening with the 22,000+ different app developers.
Perhaps the biggest winners of this change are the consumers. New apps that offer “more” for a price can now be unified as one app rather than multiple versions. This will help remove some bloat and allow people to better find what they’re looking for. Plus, it provides a business model that might support more innovative apps – like a “chapter based” adventure, or subscription based games.