Apple To Introduce In-app Payments For iPhone To Lure App Developers

By Partho, Gaea News Network
Saturday, June 6, 2009

iphone With the air over iPhone getting hotter and the App Store about to spill over with apps, Apple plans to allow the developers to in-app payments to applications through the iPhone App Store.The in-app commerce would be one of the the significant additions to the much awaited iPhone 3.0 OS.The idea seems quite simple, with transactions taking place within the application Apple is trying to change the economic trend of mobile application market. In addition, it could be a lucrative inclusion for the developers offering the opportunity to make money from their applications. From what could be anticipated, Apple could leave the smartphone competitors to dust if their plan is executed accordingly.

Reacting to the news, Bart Decrem, CEO of Tapulous, a small developer that creates applications exclusively for the iPhone, said this will lead to Apple increasing their lead in the market even more. Further, he explained that the Apple’s move would be a direct challenge to the competitors trying to build their own app stores to get traction with developers. Clearly, the small developers might find no interest to work for other platforms.

App Store’s Success Story

Apples new resolution is fed by the success of its App Store. Already Apple has announced its billionth application download just after nine months of its launch. Still there are mixed financial gains for the developers.While some of the applications are highly demanded, and earned huge sums, there are others that are far below the break even.

Currently, the App Store offers most of the apps for free download. For more a majority of them that have a price tag doesn’t cross the 99 cents mark. That makes it tough for the developers to sell their stuff for more than a dollar, especially when there are lots of free apps available.

Benefits to the developers and users

Apple’s concept to add in-app purchasing would open up the ambit for developers to generate some cash. This could be interpreted as Apple’s attempt to encourage the developers to invest more time, money, and effort developing applications for iPhone rather than the smartphones like the Android devices or Windows Mobile devices.

The in-app commerce would allow big game publishers like Electronic Arts to thrive app development for App Store. Currently, EA produces games for iPhone at around $ 9.99 and higher. According to Adam Sussman, vice president of worldwide publishing for the game developer, new in-app commerce feature would allow the companies to lower the price of the game to extend their audience by monetizing the elements of the game. For instance, EA will be able to sell the additional maps to play games at 99 cents. There are other possibilities
like offering more digital features like a clothing’s or other items for virtual embellishments in the Sim games.

According to Adam Sussman, vice president of worldwide publishing for EA, the paid apps in the App Store will move away from a single download model. The new model will include more micro-transactions that would broaden the installed base of users and might extend the life of particular applications.

Why Apple’s Scores Over Other Mobiles

Well, Apple is not the first company to sell downloadable applications for mobile phones. But it was the first of its kind that made it easy for the customers to discover, download and pay for applications. Evidently, all the other cell phone application stores, and those with third-party support lack such approach.

It appears that Apple’s smartphone competitors have caught onto this lesson as evident from the imitating application storefronts from companies, such as Nokia, Google, Research In Motion and Microsoft.

The App Store offers ecommerce platform, iTunes that allows bill for customers. It makes it downloading and paying for applications as easy as purchasing and downloading a games. Apple’s competitors are required to build their own mechanism for discovering and paying for new applications.

With Google’s android lacking the momentum and Palm Pre still in its beta, there seems not even a distant threat to iPhone supremacy in app market. Apple will likely introduce new products into the iPhone family, and with added opportunities in the form of in-app commerce. It is difficult for the developers spend resources.

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