Implications of Free In-App Purchases

15 Oct 2013

Shortly before iOS7 was released, Apple made a small – but interesting change to the rules surrounding in-app purchases: IAPs can now have the price tier Free.

I haven’t seen this change discussed anywhere, so I thought I’d outline some of the impacts.

Simpler code: Previously, to support free downloads, you would have to host them on your own server, and then have two code paths - one for free items, and one for paid through the app store. Now you only need to host your content with Apple, and remove all that other download code1.

Metrics: Integrating a full-blown analytics system is the best way to understand how people are using an app, but having a free IAP is a simple way to test engagement. If you aren’t seeing a 1:1 ratio of downloads to a free IAP you might have a problem; your IAP might not be compelling, or maybe users can’t figure out how to buy it.

Reducing Friction: The huge pain with IAP is that each app has to build a little storefront for these purchases. Providing a free IAP is a great way to train your users how to download something. Hopefully that will help to convert them to paying users.

Increased reliability: The StoreKit API is far from perfect (a few more error codes would be nice), but the downloading and installing aspect works extremely well. Downloads can be paused/continued and even run in the background. So, if your IAP downloads contain non-trivial amounts of data, using the App Store to host this content is a huge win.

Sales/Promotions: Dropping an app’s price to free always results in a huge spike of downloads, so it’s interesting that developers now have the option of making an IAP free. Of course, IAPs are outside of the app store ecosystem - so no one will know about your sale unless you tell them. Still, making an IAP free for a day is a great excuse to send out an email to your users or even a push notification2.

If you’ve seen any interesting uses of free IAPs in the wild, leave a note in the comments.

  1. In practice, I found my own download code was great for testing. Also, if you rely on Apple for hosting, then it does make it harder to port your app to another platform.

  2. Hopefully you have a way to get in touch with your customers!

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