Developers could very well re-architect their application so that when you download the update to v2, you have to unlock the new features with an in-app purchase, but to be honest, it's a lot of extra work for the developer, and there is no way to make it less painful for the users, who will feel like they are getting nickel and dimed by the developer.

Also, for those users that are brand new on the v2 version, it's a very bad experience when they have to immediately buy an in-app purchase just to unlock functionality that should be included. If you drop the price of the v2 version to accomodate this, then your original v1 userbase will complain that they paid twice as much.

Here's an example:

v1.0 of App X sells for $9.99 on the app store. Users buy it and are happy.

v2.0 of App X comes out and to unlock the new features, you must pay $4.99 in-app purchase. Developer drops the price of the app to $4.99 so that new users don't have to pay $14.99 to get all the features.

New users now complain that they have to immediately make an in-app purchase just to unlock the software - they don't notice that it's half price now because they never bought it previously.

Existing users complain that they paid $9.99 and are now being nickel and dimed for updates, when the price is cut in half now.

You can't win. Unfortunately, Apple has create a model that makes a lot of profit for them, and makes it relatively painless for the end user, but it's a model where the developers suffer and can't really support the large applications that receive many new features every year.

The idea to have new features exist as unlockable extras actually is an advantage to users: if they don't need it, they still get updates for the feature set they bought.

So all that's missing is a way to give customers of "date X or later" unlockable features as part of the baseline sale.

Except the developer takes a hit there, too. Given that not everyone needs every feature, users end up subsidizing each other's desired improvements as part of a major upgrade. On top of that, not all features have clear lines that can be drawn around them, technically or marketing-wise.

It's a great model for games and certain specific types of apps (Paper is very clever). But to push all apps onto this model is highly unrealistic.

I'm not sure if the developer necessarily takes a hit. Say I have $15 to spend on a video editing app. $10 for the initial app and $5 for the only premium feature I want results in me giving $15 to the developer (less Apple's cut etc). However if the developer adds 5 new features to the app and I have to choose between buying features that I mostly don't want and can't afford or not spending the money I'll most likey give $0 to the developer.

Similar situation with luxury features on cars: it makes business sense to sell them individually.

If you wanted/needed the feature badly enough (ie, it was a mission-critical tool), you might pay much more for an update that included your desired feature in addition to stuff you don't need (or even stuff you might not yet know that you want). Also, the extra "wasted" revenue helps pay the developer for the thankless but necessary task of under-the-hood improvements, whose costs have to absorbed elsewhere.

I'm not saying the model can never work, but it's not a good fit for every product. The developer should be able to create the relationship with their customers that they think fits best; sometimes that will be IAP, sometimes subscriptions, sometimes upgrades. There will never be "one business model to rule them all", or else we'd see all marketplaces naturally converge in that direction.

For the developer, now they need to re-sell every single feature of their app. Why would anyone choose that over just bundling them together?

1. It's an easy way to charge for new development on platforms that don't have paid upgrades.

2. It can turn be much more profitable as long as you don't just take the price you'd charge for the upgrade and divide by the number of features. Games are leading the way with this business model.

For example, IIRC League of Legends is insanely popular right now. (I want to say it's the biggest game at the moment, but I could be misremembering. Anyway.) It's free to play, but unlike most games, you don't get any permanent characters or upgrades when you start. To unlock a character, you have to buy them. Buying all the characters with money would cost almost a thousand dollars. And if you want to customize your characters so they look cool – well, that can cost several times more. Suffice it to say, Riot Games is doing pretty well for itself by unbundling as much as humanly possible.

Why lower the price of the initial purchase? Just keep it simple: basic app is $10 forever. The basic version of the app comes with some basic useful features. Premium features become available via in-app-purchase as the developer makes them. Users can choose to use the premium features or not. Bug-fix updates are just free as they should be IMO.

Using a theoretical video editor as an example: $10 gets you basic clip cropping, placing clips next to each other, background music, importing, exporting and titles. So a basically useful app. Later the developer updates the app with a few bug-fixes and a premium "transitions" feature that's available via IAP. This update is of course free to download. So existing users get the bug-fixes for free. Anyone who want the premium feature just unlocks it and uses it indefinitely.

It creates a lot of ill-will from customers which translates into bad reviews:

"I bought this app for $9.99 and then I found out that all of the good features require in-app purchases - 1 star for you!"

I think you misunderstood. He's suggesting that instead of releasing v2.0 on the App Store, you release an in-app purchase option in the original app that upgrades it to v2.0. A similar idea would be to release new features a la carte as in-app purchases instead of releasing new numbered versions. I'm not sure if the marketing hit would be worth it, but it is one way to a consistent revenue stream.

Diner Dash follows this model. They update the app periodically and add new content available via in app purchase.

There are a lot of problems with that idea, but the biggest I can see is that the user experience is horrendous. You're basically describing a world of itemized crippleware, where buying an app that's more than a few years old involves a half hour-long process of adding on feature packs.

The problem is getting customers of version 1 onto version 2. There is no way to do this with MAS. I have a mechanism built into Shave so I can push "news", but it's annoying and bad user experience.

Why not a "fat" app? Always include two major versions in one binary, instead of putting the new features behind a paywall. Have an IAP purchase that just configures the app to run "Side B" from then on.

edit: no, I guess that does not work per below.

Why can't you update the app and hide most of the new features behind an in-app-purchase paywall?

New users who purchase the updated app would have to pay again to get the latest features.

I think the following set-up avoids that problem: app is always the same price to download and has a few basic features unlocked. App has an upgrade view or screen where users can unlock additional features via in-app-purchase.

It works like this: developer releases the app for, say, $10. People buy it and use the basic features for a while. So far there's no upgrades available. Developer codes up a premium feature and updates the app in the store. Existing users can use the app as-is with the basic features that came with the $10 price tag. Existing users can also make an in-app-purchase for, say, $5 that unlocks the premium feature. When new users download the app for $10 they just get the basic features. Since another "version" of the app is available the new users can just buy the premium features if they so choose.

Fast forward to version 5 of the app. Now there's 4 upgrades available via in-app-purchase. However users are only prompted to purchase the next version based on their in-app-purchase history.

I don't think there's a problem for new users who purchase the updated app.

This does away with everyone-is-on-newest-version paradigm of automatic updates that makes support easy - in fact, it makes it much worse. Instead of five old versions of the app, you might have 1 base + 12 permutations = 13 different combinations of functionality to support.

Good point. This approach probably wouldn't work for some apps. However if the app lent itself to a very modular design it could work. Certainly would take some creativity on the developer's part. For example premium features that are troublesome if only some people have them could be included in a free bug-fix update to make things easier.

I suspect it would be much nicer for both the dev and the users if there was just a single "Upgrade to the latest version for $5" option. Don't try to splinter the upgrade path into features or sub-steps. So, as a consumer story: you buy v3 for $10. Over the next year, v4,5,6 come out and you pass on them. V7 finally convinces you to upgrade and you shell out $5 to go from 3->7 with a single click. Meanwhile, if you were a power-user, you might have been impatient and shelled out $5 each for v4,5,6 along the way. But, I think that's a pretty reasonable way do perform price discrimination.

If a developer is going to offer a version upgrade, it's the fact of a previous version purchase that signifies eligibility. The app store clearly has this purchase information. So why not give the developer the option to set previous versions to act as "coupons" reducing the price of the new version by a developer specified amount? When version 5 is released at $20, let old versions be set so they can no longer be purchased anew. Let the developer set owners of version 4 as seeing the price of version 5 as $10. If you own version 3, then perhaps 5 is $15. Let previous versions themselves be upgrade coupons.

In-app purchases are left as orthogonal to these upgrades. The developer could perhaps be allowed to continue to push out bug fixes for older versions, or even old version DLC.

Nope, you can get around that. Store the version of the app that is first run. Those that have the new version as the first run get the new additions.

How would this work? I mean, even assuming Apple let you get away with it:

If you store the version on the device, the user would simply have to delete the app (which wipes all data the app has stored on the device) and re-download from the app store (which is free) to get the latest version. It's not going to take long for users to notice that and then you'll never sell an upgrade again.

So you'd need to move away from a straight app and also create a server component. But to store it on the server, you need something that uniquely identifies the user.

You can't get access to the UDID any more (and besides, people would catch on when upgrading their phone got them new version of everything for free).

You can't generate some kind of GUID, because that has the same problem as just tracking it on the device. Upgrades are just a reinstall away.

And you can't force them to sign up for your site on first launch: App Store reviewers won't approve apps that make users register solely to store information about them. So you'd need to push content through the site, at which point you've moved well beyond the purview of most apps, and you ought to just give up the game and sell access to the content itself.

Anyone who has purchased any IAP content at all has an IAP receipt that you have access to even across installs.

This leaves the problem that v>1 first time buyers will have to IAP something immediately after buying the app, kind of pushes you to have a free trial mode.

Hopefully apple will eventually introduce time-limited free trials and upgrade options. If their history with iOS and Mac versioning is any hint, the current simple system is not a religious thing for them and they will listen if they see enough negative feedback. Which we should provide.

Is that necessary? For some reason I can't think of any problems with the freemium-like approach. Basic app has a fixed price and basic features. It's what everyone gets initially. "Versions" are really just premium features available via in-app-purchase. Bug-fix updates just affect the basic version of the app. And they're available for free to anyone who has the app just like the iOS store.

World of Warcraft is a bad example of this. The client you have downloaded is always patched to the latest version, even if you haven't bought the expansions.

Each expansion unlocks content. So once you buy The Burning Crusade, you get access to the Outlands zone. That only matters if you have a character that's level 58 or higher.

Blizzard redid the entirety of the Vanilla WoW experience in the Cataclysm expansion. Even if you did not buy that expansion, the level 1-60 are still the new content.

Having version 2 as in-app purchase means your version 2 app has to include version 1 in it. Good luck with implementing that. What if my version 2 is a major rewrite and I change software architecture or want to use new features. Can you imaging writing an application with 2 different interfaces, database formats and feature sets, just to make it possible to upgrade with in-app purchase? No, thank you.

Think the problem is policing it. Apple doesn't want it to become the standard that people are being charged for bug fixes every version.

Can't people decide not to purchase the app then? They have a content review system - 10 recent 1 star "Bug fixes cost $$$" and the app is dead, no? Or am I overlooking something?

That's right. Then the app is dead and users are dissatisfied. No one wins.

did you just compare a game with a 15$ subscription and 40$ expansion packs for major updates and lvl bumps to a 10 dollar app? do you realize how asinine that is and how dumb you sound?

if i want to get to current content in WoW i would of had to get Vanilla(50$ at release) + burning crusade (40$ at release) + wrath of the lich king(40$ at release) + cataclysm(40$ at release) PLUS every month im paying 15$ on subscription

if i just buy vanila i would be limited to 1-60 content, not allowed full access to any of the later continents and cities, skills, talents, cant pvp properly, not allowed in arena, cant do any endgame, and am generally wasting my time. how is that at all conducive to what you are saying? for any real application that does work or major game that requires constant updates you cant expect support and update for 10$ that's completely unfeasible.

you sound like someone who never played world of warcraft in his life, and it baffles me how you came up with such a nonsensical rebuttal

>do you realize how asinine that is and how dumb you sound?

That was unnecessary and did not add to the conversation.

And I'm not sure that I understand your point. Parent comment is saying that apps can follow the WoW model to create a consistent revenue stream without paid version number upgrades. As you mention, "for any real application that does work or major game that requires constant updates you cant expect support and update for 10$ that's completely unfeasible."