Yesterday, Apple announced that they would allow In App Purchases for free applications in the iTunes App Store. Previously, In App Purchases were only available in paid applications.
Software As A Service
This will allow developers to shift away from the Software As A Product model to the Software As A Service model. We have seen this shift on the Internet over the last decade with the rise of Web services.
Microsoft Office is a product but Google Docs is a service. iWork is a product but iWork.com is a service. iPhoto is a product but Flickr.com and MobileMe is a service.
Going forward, we will see mobile applications integrate much more tightly with web and location services.
Freemium / Free-To-Play
Freemium is a business model that we have seen in the web services world. Flickr is free for the most part. A Flickr Pro account is $25/year and buys unlimited storage and analytics.
We will start seeing this model in the mobile application business.
The big rumour is that Apple will release a tablet that will compete with the Amazon Kindle. In App Purchases will allow magazines and newspapers to charge a subscription for content. It makes sense that Apple would want to unify the way e-commerce works across all platforms and devices.