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New business model alert: Lite is dead as freemium comes to iPhone
Apple has announced a change to its terms of service which paves the way for new business models on the iPhone.
Historically, virtual goods could only be purchased in paid apps. That led to a series of anomalies, in particular that developers had to follow an upgrade path of:
Lite version -> paid version -> virtual goods/add-ons
The change is likely to eliminate Lite versions. Developers can offer a single version with a clear upgrade path to new features or content. There are some limitations, though: no virtual currencies and no “rentals” – i.e. if a user downloads content, it can’t be time-limited.
I think we’ll see a lot of changes to the iPhone business models very quickly.