Apple Changes The Game (Again) By Allowing Commerce In Free iPhone Apps

$100 Million iPhone Apps

Apple (NSDQ: AAPL) has expanded its iPhone e-commerce platform to free apps, essentially, cracking the market for micro-transactions on the iPhone wide open. The company emailed developers the news today. Previously, In App Purchase capabilities were only allowed in paid apps, so this creates a number of new money-making opportunities for developers and content publishers.

Startups can create “freemium” versions of their apps, for example, that only let users access a limited number of features as a trial, and require a paid upgrade for full service. Game developers that may have been wary of charging $5.99 for a title can now offer it for free with on-going subscription charges, or even monetize through virtual goods sales.

Even enterprise-facing apps can benefit; restaurants and hotels, for example, could create free apps that let users pay for reservations or prix fixe events in advance. “This announcement changes the landscape of the App Store as we know it,” said Colin Smith, co-founder and vice president of Freeverse, which offers a number of popular iPhone games and augmented reality apps.

The news also has potential benefits for online publishers that are trying to figure out how to get users to pay for their content. While media companies like The Journal, CNN and Hachette Filippachi have launched premium apps, others can give readers access to some of their content for free, and then charge for special reports and articles.


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