iPhone's 'In App' purchases will be a boon to micro-payments

If it wasn’t already clear who owns the customer – Apple or its mobile carrier partners – yesterday’s announcement that ‘In App’ purchases will be a prominent feature of the next version of the iPhone’s OS suggests, once again, that power resides very much with Steve Jobs and co. in Cupertino.

When iPhone OS 3.0 is rolled out this summer, developers will be able to charge for additional content within their applications – so that, for example, an iPhone game could at anytime prompt a player to purchase additional levels or other in-game content, such as maps, without the user having to leave the app and billed through their existing iTunes account. For the privilege, Apple takes its standard 30% cut, once again bypassing the carriers. That in itself is disruptive enough. However, there’s another force at play.

Micro-payments. Or more broadly, in an era of free and ad-supported, getting consumers used to the idea once again of actually paying for content, albeit online.

Dave Zatz, over at Zatz Not Funny, has rightfully compared the iPhone’s ‘In App’ purchasing to Microsoft’s XBox Live service, which heavily relies on micro-payments — selling lots of add-on content for a few dollars at a time. So what kind of content will the iPhone’s ‘In App’ purchase feature spur?

The most obvious, as already noted, is game add-ons. Think additional levels, maps etc.

Next up are eBooks – leading the way to Kindle-like book stores, perhaps even one from Amazon itself.

It’s not clear if Apple would enable an iTunes Music store competitor, although technically that’s a possibility.

We know that turn-by-turn navigation is on its way, and so GPS maps, along with city guides, are another likely form of content.

And then there’s magazine and newspaper subscriptions – again Kindle-esque – as well as one-off or season tickets to sporting or live events – concerts or the Olympics maybe?

The possibilities, as they say, are endless – and all the time Apple takes a cut, leaving the carriers dumbfounded and further dumbed down.

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last100 is edited by Steve O'Hear. Aside from founding last100, Steve is co-founder and CEO of Beepl and a freelance journalist who has written for numerous publications, including TechCrunch, The Guardian, ZDNet, ReadWriteWeb and Macworld, and also wrote and directed the Silicon Valley documentary, In Search of the Valley. See his full profile and disclosure of his industry affiliations.

One Response to “iPhone's 'In App' purchases will be a boon to micro-payments”

  1. The Apple rumor mill is once again running overtime on the topic of netbooks. If you believe the reports, Steve Jobs is himself leading the charge. My take: Whatever Apple does, it wonÂ’t be a netbook in the usual sense, I also bet that Apple, if it does anything, will itself avoid using the n-word to describe it.

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