Marco.org

From Apple, via a developer mass-mail:

Now you can use In App Purchase in your free apps to sell content, subscriptions, and digital services.

You can also simplify your development by creating a single version of your app that uses In App Purchase to unlock additional functionality, eliminating the need to create Lite versions of your app. Using In App Purchase in your app can also help combat some of the problems of software piracy by allowing you to verify In App Purchases.

This could be a big deal if it’s adopted by developers in meaningful volume.

Why now? Apple’s previous reasoning for disallowing this, “free apps should remain free”, still applies just as much as it did yesterday. What was the motivating factor for this change?

My guess is that this is a big response to the $0.99-app problem. (It’s also worth noting that, as far as I know, this is the first time Apple has acknowledged app piracy as a problem.)

For new apps, there’s now little reason to make separate free and paid versions — it now makes sense in many cases to have what I’ll call a “free+” app until someone else thinks of a better shorthand term: free for a limited or ad-supported version, with in-app purchase for premium features or content. But this doesn’t completely solve the separate-app problem for everyone:

• For existing apps with the free/paid split, there’s no practical way to transition the existing paid customers to a new “free+” version without making them pay again like a new customer.
• The policy regarding minimum functionality of an app (without additional purchase) still effectively prohibits time-limited demos. We’re still limited only to paid content or functionality upgrades, not timed trial periods.
• In-app purchase is more complex for developers than paid apps, requiring them to add payment-tracking code in the app and operate a web service (or use some of the commercial hosted services that have cropped up for this purpose).

And it raises other questions:

• Do “free+” apps compete in the Top Paid or Top Free list? Neither choice would seem fair to the “pure” apps in each respective list.
• Will the Top Grossing list include in-app purchases? (Has it been?)

But, if “free+” pricing takes off, it could have a number of positive effects:

• Average prices can go up. People are more willing to pay for (relatively) higher-priced apps if they have free versions. This is a big deal.
• Customers who try the free version and decide to pay for an upgrade no longer need to delete the old app or re-enter their data in the new one. This significantly reduces the friction to upgrade from free versions, which should dramatically increase the proportion of people who do.
• Rankings, ratings, and management for popular apps with free versions no longer need to be split between two separate apps, which is much easier and more fair for developers.

There’s no question that this is a great move for both users and developers.