Apple OKs In-App Purchases In Free iPhone Apps

iphone-appsApple made the surprising announcement yesterday that they’re now allowing developers to integrate in-app purchases in otherwise free iPhone apps.

Apple previously only allowed in-app purchases in paid applications, meaning developers were forced to develop their paid application in addition to a “lite” version or “teaser” version of the same app to help get downloads and help upsell.  The only problem was that it created a lot of un-needed work on behalf of the developer.

With in-app purchases, for example, a user can now download the free version of a game, and then purchase the full version within the game itself- whereas the user would have had to go back to the App Store and download the paid version separately before.  In addition, developers will now have the option to add things like more levels for a fee from within a free game, and magazines, for example, can offer a free app- but also offer subscription plans from within the app itself.

Before, Apple had stood strong on the fact that free apps should remain free no matter what, which is why the announcement came as a surprise to most.  Now that the App Store has grown so massive, Apple likely saw a huge revenue potential and changed its mind.  As with paid apps, Apple will still facilitate the backend billing and take a cut out of the sale price of the in-app purchase.

What’s interesting about the move is that Apple, in its letter to developers regarding the announcement, stated that using in-app purchases “can also help combat some of the problems of software piracy by allowing you to verify In App Purchases.”  Many have always speculated about the growing problem of iPhone app piracy, and this is the first time Apple itself has acknowledged it.  It’s estimated that there are over 4 million “jailbroken” iPhone in use today, and with Apple starting to ship jailbreak-proof iPhone 3GSs, it’s apparent the company is starting to take steps to combat the issue.