Monday, May 3, 2010

Apple's Unsung Innovation - Micro-payments

Apple has done a lot of things right with the iPhone / iPad over the past 3 years. However one thing that I haven't heard a lot of talk about is the iTunes payment system.

It might be a stretch to call it an innovation on Apple's part, but Apple certainly seems to be the first to get it right.

The success of the App Store I think is very strong evidence that people will pay for things if:
  1. They think it is a good product
  2. It is reasonably priced
  3. The purchase process is easy and fast
  4. They trust the store with their payment info
I think the ability to get customers to actually part with their money has drawn a lot of developers to the App Store. Sure I can write a quick flash game and toss it up on a website, but how to I get paid? Adds seem to be the only thing going, but it doesn't seem like there's a lot of independent software developers making a living off web based apps. Sure the big players can make it work, but for a lone developer with an idea to earn a living on the web usually requires venture capital, and years of planning. There are plenty of people making a living selling software in the App Store now, and they don't have VC partners to pay back eventually.

I think this also serves as strong evidence refuting some industry perspectives (RIAA/MPAA/etc) who think that the world is full of thieves, and only laws and technology will save their dying business models.

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