Mobile app developers have had their share of problems. Piracy, malware, and copycat apps are common obstacles that app developers need to overcome. A fairly new purchase model is slowly gaining popularity in Apple’s app store, and it might be a solution to a few of these issues.
Instead of offering both a “lite” trial version, and a paid version of an app, this new model has them combined into one free app. This free app is basically the equivalent of the trial version, but it has an optional in-app purchase to unlock it as the fully featured app. People sometimes use the (buzz) word “freemium” for this model as it’s free unless you want the premium features, then you need to make a purchase.
By using this model, developers can help to curb piracy because even if someone is able to download the whole app and install it, they still have to pay the in-app purchase price to use the app with its full feature list and on top of that there isn’t any incentive to pirate the app in the first place because it’s available for free to begin with. The initial download is smaller since it’s only the trial, and if you have no interest in the trial version it’s easy to make the in-app purchase to unlock it on it’s first launch.
This model may also lower the barrier of entry for apps that people are on the fence about, as it’s a simple way to sample apps with no obligation. It also conveniently allows them to purchase something they’ve tried and enjoyed, which might be the easiest sell you can make. It may even increase conversion rates for people that enjoyed a trial version of an app, but never bothered to follow up and seek out the full version from the store. The convenience of a one-click purchase puts the opportunity to upgrade to the full version in front of them every time they use the app in a non-intrusive manner.
This model is especially helpful for the Android. The Android market has had more piracy and malware problems than the Apple app store which some feel is due to its open nature. In late March of 2011, Google introduced a standard in-app purchase model that will allow Android developers to take advantage of this freemium app model. Over the next year, I would expect to see it taking off in the Android market with great success as it looks like a solution to many of the problems they face, and at the very least, they can recover some of the money that is otherwise lost to piracy. Developers like Gameloft have already started using this model for all of their releases, and so far it looks like it has been very successful for them.
The Apple app store is designed for the current model of trial and full apps, and may need a new section for this hybrid approach, or alter the way they display prices completely. Currently apps designed with this model show up as “free” and the actual price is listed with the in-app purchases. This is accurate, however, it has led to negative comments and ratings as consumers felt that the “free” price listing was misleading because they didn’t see the in-app purchase price immediately. If these freemium apps continue to gain momentum we’ll have to wait and see if app stores will be altered to accommodate this pricing model.