In its announcement, Apple suggested to developers that they could simplify the development process by creating a single version of an app that uses In App Purchasing to unlock additional or premium features, rather than creating both a full-featured paid app and free version with more limited features.
Apple also suggested that using In App Purchasing can help combat iPhone app piracy by providing a robust verification and authentication system.
Some iPhone developers, such as Ngmoco, have reported piracy rates ranging from 50% to 90%. In April, iPhone developer Victor Costan said that his StockPlay app had an effective piracy rate of more than 90%. Other iPhone developers report that about 10% of their users have jailbroken iPhones and around 6% of their sessions came from cracked versions of their app.
Pinch Media, a mobile advertising and analytics company, says that 60% of paid apps using its analytics service have been pirated and notes that the number is probably higher because software pirates often disable analytics tracking codes. Among apps that have been pirated, 34% of installations are pirated, the company says.
If developers take Apple's advice and create a single app rather than a free and a paid version, they may see a reduction in the wait time for app approval because Apple will have fewer apps to review. In July, Apple said in an open letter to the FCC that it received about 8,500 new and updated apps to review every week.
The expansion of In App Purchasing is being widely applauded by developers but not without some reservations. On the iPhone Dev SDK forum, developers welcomed the prospect of not having to maintain paid and free versions of the same application, but many had questions about how to implement the necessary code.
Apple's new policy does not address the major complaint developers have voiced about the application approval process: the absence of clear, consistent rules that would allow developers to be certain about an app's acceptability before any time or money is invested.
Eddie Marks, co-founder of Inedible Software, says he believes the new policy will change the whole market. "We've always been big supporters of the freemium model, but an upsell from within your free app is just so much easier than trying to get your users to the app store again to purchase your premium version," he said in an e-mail. "Additionally, you can now concentrate all of your downloads and marketing on one version, which should help you compete on the top 100 lists."
Marks acknowledges the anti-piracy and organizational benefits of the new policy, but sees the marketing benefits as the most significant aspect of Apple's announcement.
"The ability to maintain one code base is certainly a welcome help and should reduce clutter, but I think the biggest thing we're looking forward to is the increased ease and visibility of the premium upsell," he said.
What remains to be seen is whether the new policy will lead to more or less ads in iPhone apps.
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