In the Apple App Store it was already possible to offer in-app purchases to users of paid applications. This offered many potential new ways for developers to monetize their applications. Instead of only being able to charge a one-off fee , developers can offer subscriptions, new application content, virtual goods and much more in their paid apps.

Apple initially limited in-app purchase to paid applications, so developers with free apps still had to launch a paid version before being able to bill from the application itself. This now changed. Apple announced that in-app purchase is also available for free applications:

This is huge for developers wanting to upsell their apps. Because of the lower initial price point (free), many more customers will download the app, increasing the potential for upselling.

This can have a substantial impact on the proportion of free and paid apps in the Apple App Store and it will also be very interesting to see what the impact on application prices will be. As TechCrunch notes, many developers with free applications that wanted to make use of in-app purchase before, needed to launch a paid version of their app, for which a low price point was often chosen. So will average prices of paid apps go up because lower prices apps will go for free and enable in-app purchase? We will report on that soon.