Is iTunes the key to Apple’s paid app advantage?

itunes-appstore

Apple’s iOS  mobile platform tends to sell more paid software than its rivals, a fact that only seems to become more apparent as other gaps like the size of other platforms’ app libraries narrow. People cite a lot of different reasons for why Apple’s customers are more willing to pay, but its biggest advantage might be a head start that Google, Microsoft or any other mobile competitor can’t do much to eliminate: iTunes.

Video calling service Tango’s new paid features have experienced two million subscribers on both Android and iOS since their introduction, Tango founder and CTO Eric Setton told the New York Times on Monday. But those using Apple’s platform convert from the app’s free basic service to paid add-ons four times as often as do Android users. Setton thinks there is a very simple reason why that is, one that doesn’t have to do with app quality or platform user demographics:

It comes from years of collecting credit card numbers on iTunes. People can use their stored credit card numbers and purchase things easily. Punching in a credit card number on Android is more work.

Of course, you can add and store credit cards on the Android Market, too, but that’s an additional step on Google’s OS that isn’t required on Apple’s for most, since credit cards will already be on file, thanks to previous iTunes music or movie purchases. Also, iTunes allows multiple payment methods; you can tie it to iTunes gift cards or preapproved spending limits automatically, making it more flexible overall.

People are also slow to adopt new online payment methods, which is why it is so crucial that the App Store doesn’t require one; users simply have to continue using the same system they have already embraced for purchasing digital music online for nearly a decade. The iTunes Store has been the No. 1 music retailer since 2008, so it has had plenty of time to win the trust of a large number of users. Google, on the other hand, traditionally hasn’t asked its users to pay a dime for pretty much anything.

The good news for Google is that the barrier to entry for users new to any and all online purchasing is roughly the same for both platforms, meaning eventually users should be just as comfortable with paying on one OS vs. the other. The good news for Apple, though, is that for the time being, it remains the trusted vendor of choice for online purchases, particularly among the generation that cut its teeth on iPods and the iTunes Store.

So far, that role has led to increased consumer activity on Apple’s digital stores and devices, but Apple’s recently introduced EasyPay system indicates its effects could bleed over into real-world transactions, too. Google may have gotten Wallet out into the wild early, but trust could trump speed when it comes to long-term mobile commerce adoption.

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