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CNET News Video: iPhone OS 3.0: In-app buying
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CNET News Video: iPhone OS 3.0: In-app buying

3:08 /

Apple senior vice president of iPhone software Scott Forstall explains how iPhone users can buy new game levels, subscription content, and more from within an iPhone application.

[ Music ] >> Well, I'm happy to say that we are supporting all of these additional purchase models in iPhone 3O. And we're doing it with what we call InAppPurchase [assumed spelling]. Let me show you how it works. Let's say you have an e-magazine. In iPhone 3O, right from within this application, you'll be able to purchase the renewal. So you get this standard panel. Comes up and says in this case, would you like to purchase six more months for $4.99? When you tap "buy", you'll continue to receive all of the issues to this magazine right inside the app. Next, a game. You can now purchase a game that would come, with say ten levels. And when you're done playing those ten levels, just by the tap of your finger, you could purchase the next ten levels for the game. When you say you'd like to buy it, the game will automatically download those levels right into the game. One more example. City Guides. Again, before iPhone 3O, you would need to sell one application per guide. With iPhone 3O, you can sell a generic City Guide application, and then sell City Packs. So you can see here, I've already purchased, say the Boston and the New York City pack. So let's say I want to purchase Chicago. It's as easy as tapping on Chicago, and it brings up the standard alert asking if I'd like to purchase it. Now here's where it's really nice. This whole thing is tied directly into the iTunes store. So, when you tap on buy, it brings up a standard iTunes credential panel in a secure way, you know. Get your username, you type in your password, and when you do, it talks back to our iTunes store, validates the account, and when it proves the purchase, the application is free to download that City Guide right into the app. And now, you're good to go. So, InAppPurchase. The business model for InAppPurchase is the same as for the App store. Meaning, the developer sets the price for InAppPurchase items. Again, 70 percent of the revenue goes straight to the developer. There are no credit card fees. We will cover all the credit card fees, and developers are paid monthly. Now, to keep the model simple for the consumer, this is for paid apps only. So if a developer sells an application, and it makes sense in that application to have an InAppPurchase, say for a subscription, you're absolutely happy to go ahead and do that. But to keep it simple, when a consumer sees a free application, free apps remain free. You won't be asked ever to buy something inside that free application. And that's what we're doing for InAppPurchase. [ Music ]

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