In-app Purchases

Tim Cook welcomes Office for iPad...and Apple's 30% cut of in-app purchases

Tim Cook publicly welcomed Microsoft Office for iPad via Twitter today, and Apple will be taking a 30% cut of all in-app purchase revenue from the new apps. This is standard practice for the App Store and means that Microsoft will indeed be surrendering a cut of all Office 365 subscriptions it sells that way. So, there's every reason for Apple to be doubly excited.

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Wake up to Puzzle Retreat's sliding block puzzles

After a weekend spent lazing around the house, partying, or lazily parting, it can be tough to get your mind sharpened back up for the new work week. What better way to get the brain juices flowing than a devious puzzle game?

Puzzle Retreat is just such a game, coming from Australian developer the Voxel Agents. With more 60 free levels of block-sliding challenge (and many more available for in-app purchase), it will thrill - and stump - even the most intellectual gamer.

 

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Son makes £3,700 in app purchases, policeman father reports him for fraud

A U.K. policeman has reported his own 13-year-old son for fraud after the young man racked up a £3,700 charge for in-app purchases on his iPad that Apple refused to refund. The officer, Doug Crossan, says that his son was not aware that he was being charged for these downloads, and that he wants Apple to cancel the charge. Apple has refused to do so, so in order to get his money back, he reported the purchases as fraudulent.

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Stealing in-app purchases and what it could cost you

There's a story going around today about a new hack that appears to allow users to bypass iTunes and steal in-app purchases "for free". I put "for free" in quotation marks because, as Ally pointed out in her editorial on app theft, there's no such thing as free. This time, however, the cost could be something more than money. The way I understand it, the hack in question uses a proxy, requires you to install a bogus certificate, and change DNS settings. That allows the transaction to be intercepted before it reaches iTunes, and that's what lets it cheat developers out of payment. It's also what could let the hacker collect all your information instead.

And that's dangerous.

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Did Apple make a mistake with free apps?

Manton has an interesting post up where he theorizes that a lot of the problems we've seen in the App Store, from the across the board 30% revenue cut Apple requires for paid apps, to in-app purchases, to iAds, and now subscriptions can all be traced back to Apple's decision to host free apps for free. In other words, that the cost of approving, hosting, marketing, and delivering free apps is high enough that Apple is struggling and stumbling to make enough off paid apps and content to cover it.

When Steve Jobs said it, offering free apps for so little seemed almost foolish, like Apple was compensating for the high 30% by giving too good a deal to free apps. Why not charge some hosting fee? Or why not give up exclusive distribution and let free apps be installed directly by the user without forcing everything through the App Store? Unlimited bandwidth, promotion in the store, and everything else just for the $99 dev program fee was a pretty good deal. And now I wonder if Apple hasn't been backpedaling ever since, trying to make up for that mistake.

So in order to run the App Store at just over break-even -- as Apple reports they during their financial results -- they need to earn enough off paid apps to defray the cost of free apps. They also have to make sure they don't lose revenue -- they can't let developers offer free apps, shouldered by Apple, with ads that make money for Google or that use subscriptions or other forms of outside payments as a way to circumvent the revenue sharing. (Which is why we said from the beginning Apple couldn't charge less than 30% for subscriptions or every paid and in-app purchasing app that could would just switch to subscriptions in order to keep more of the revenue.)

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FTC investigating Smurfberries, other in-app purchases

The Federal Trade Commission (FTC) has said they will be investigating in-app purchases for applications marketed to children, such as Smurfs' Village. The argument is that some children do not understand the difference between real and virtual purchases.

In a letter to Rep. Ed Markey (D-Mass.), FTC Chairman Jon Leibowitz wrote:

We fully share your concern that consumers, particularly children, are unlikely to understand the ramifications of these types of purchases. Let me assure you we will look closely at the current industry practice with respect to the marketing and delivery of these types of applications.

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Apple responds on Sony Reader rejection: "We have not changed our guidelines"

Apple has responded to news this morning about rejecting the Sony Reader app from the App Store for not using Apple's in-app purchase system, which could have a broader impact on other apps like Kindle, Netflix and Hulu+. All Things Digital spoke with Apple Spokesperson Trudy Miller who stated the following about Apple's recent move:

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Dev tips: Editing metadata, submitting in-app purchases, using the same name for iPhone and Mac Apps

Apple pushed out 3 news items for developers today: editing metadata once you've submitted an app for review, how to prepare in-app purchases for app review, and using the same app name for iPhone/iPad and Mac apps.

Highlights after the break!

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PEOPLE Magazine for iPad available, free for print subscribers

PEOPLE magazine is now available for iPad. The application is free to download, but each issue is a $3.99 in-app purchase. However, if you are a subscriber to the print version of PEOPLE, you get the iPad version for free! Unfortunately, there is not a subscription model in place with the app. So subscribing to strictly the iPad version is not an option.

In addition to the content of the print version of PEOPLE, the iPad version offers even more:

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