As much as we’ve enjoyed working with Apple and the iPhone, development for this platform has not been without its share of challenges. One of the biggest has been, and to a large extent, still will be, visibility: getting customers aware that your application exists and getting them to try out your applications have represented a major ordeal for some vendors.

Fortunately, one of the major barriers to the adoption of high-end iPhone applications has just been struck down. Apple just announced today that in-app purchases will now be allowed for free applications. This is fantastic:

In App Purchase is being rapidly adopted by developers in their paid apps. Now you can use In App Purchase in your free apps to sell content, subscriptions, and digital services.

You can also simplify your development by creating a single version of your app that uses In App Purchase to unlock additional functionality, eliminating the need to create Lite versions of your app. Using In App Purchase in your app can also help combat some of the problems of software piracy by allowing you to verify In App Purchases.

Visit the App Store Resource Center for more details about how you can add In App Purchases to your free apps.

One thing that we personally found amazing about this announcement was that it hit our email in the middle of a discussion that Chris Clark and I were having about which app store strategy we should adopt for one of our own applications.

The email made the entire conversation completely moot.

Marketing 101

One of the biggest challenges facing the developers of high-quality applications has been exposure. Most users are unwilling to pay $4.99 for an application that they can’t try, and many of these apps get passed in favor of cheaper, less risky offerings.

Obviously, one of the most important things for high-end app developers to do is get their application in front of users so that they can get a chance to try it and find out if it meets their needs. This is why companies like Adobe offer 30 day, full-functionality trials of their applications.

In-app purchasing can be used to unlock existing code in an application, which provides a good way to provide additional features for users. The problem with this was that, until today, you could only provide in-app purchases for paid applications, which meant that you needed to charge at least $0.99 for your upgradeable app.

Unfortunately, as Hog Bay Software discovered with WriteRoom, the number of people that will download a $0.99 app is less than 10% of those that will check out a free one. This means that the audience you could reach using in-app purchases for upgrades would be dramatically smaller than you’d get if you could make it free.

The two-fold path: lite apps

Prior to today, the only way to really get any exposure was to offer a limited-functionality lite version of the application for free in addition to a full priced, premium version of the application.

With the Lite app model, you’d have to maintain two of each app, and people would need to buy and install a completely different application if they wanted to go ahead and buy the full version of your software. This opens up a few different logistical issues, like the fact that any user data compiled using one application will either need to be transferred to the full version, or simply scrapped altogether.

Have your cake and eat it, too

Now we get the best of both worlds: the extensive exposure that a free application provides, a very easy registration path for users that want to unlock the software, and data coherence between the free and full versions of the application.

The very best option, which I do not think that Apple will go for (at least, based on what I knew before today) would be to have a time-limited period of full functionality for applications, that would eventually become disabled (resulting in ‘lite’ functionality) and could be permanently unlocked via in-app purchase.

Update:

Marco Arment has weighed in on this as well and raises some excellent points.

Update 2:

Additional commentary from The Unofficial Apple Weblog.