Apple Allows In-Application Purchases For Free Apps

The iPhone application development can be a lucrative business as long as you can catch a simple concept and turn it into a viral application. As long as you choose the right business model for your app and market your app properly, you can make more than just a few dimes on your iPhone. Many developers have focused on making money from free apps. Whether it is using ads or using free apps to sell premium apps, giving away apps for free can help you spread the word around about your business fast. But perhaps the best possible way to make money with your iPhone app is by adopting a freemium business model. Till now, you could do that by creating two version of your apps (lite and premium) and hope for people to download your premium app as well. It was inconvenient but got the job done.

Apple’s latest move to allow in-app purchases for free apps would now allow developers to develop their freemium business in a more seamless fashion. It will be easier for indecisive developers to come up with free apps and ask their audience to upgrade for money. Even those developers who have been relying on ads to make money from their free apps can now focus on providing more value to the iPhone community and make more money in return.

Developers have already started taking advantage of this new feature. The developer of Boxcar is one of the few developers who have jumped on this exciting development to go fully freemium. Instead of charging money up-fr0nt, developers can now give away something for free and empower their prospects to choose what premium features they want to add to their app. I fully expect more people to adopt the freemium business model to make more money from their apps and provide more value to iPhone fans. A lot of people were already familiar with the concept years ago, and those who have read Chris Anderson’s material seem to have jumped on board.

One would hope that developers will now use this latest opportunity to develop more sophisticated applications and focus more on providing value than making money. But it’s hard to tell how this move will affect the overall quality of apps on iTunes. Let’s just hope developers don’t go overboard with this feature.

Your turn: how will in-app purchases affect the quality of free apps on iPhone?