iPhone In-App Purchases Already Leading To The Dreaded Two Words: Bait And Switch

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bait-and-switchSince it launched a year ago, Apple’s App Store has had a series of successes (50,000 apps, a billion downloads, transforming the market), but also some failures. While plenty of people talk about the abundance of junk apps in the store, I have never seen that as a problem since no one is forcing anyone to download them — and believe it or not, some people actually do, for whatever reason, love fart apps. But one real problem has been Apple’s uneven policy when it comes to the acceptance and rejection of apps into the store.

It looks like we should be seeing some improvements on that front shortly, as the new iPhone 3.0 software has parental controls built-in which will restrict kids under a certain age from using certain apps. While that won’t solve some silly rejections, it should ease the burden on app screeners having to look closely at apps that are clearly intended for a mature audience.

So, I’m hopeful on that front. But there’s a new potentially troublesome front opening up as well: Bait and switch apps. Yes, the old practice of luring customers with a shiny price, only to reveal the real cost after (in this case, the download), could find its way to the App Store, thanks to in-app purchases.

Let me be clear: I think in-app purchases are potentially the most exciting thing about the new iPhone 3.0 SDK for developers. I believe it will mean a boatload of money for a great many of them as well as Apple, which takes its 30% cut. But where there is money to be made, there is money to be taken. And we’re likely to see a rise in apps that seem priced way too good to be true — because they are, until you download them.

Now, this won’t be a huge problem because no app can force you to make an in-app purchase. But it could potentially clutter up the store with these falsely cheap apps. And depending on how misleading Apple allows some apps to be with the in-app purchases, we could see a bunch of people buying stuff they didn’t really want to be buying.

One of the first potentially troubling apps in this regard for the iPhone 3.0 software launched last week, Gokivo [iTunes Link]. The app sells for $0.99, but that doesn’t give you access to the biggest selling point of the app: Turn-by-turn navigation. That will set you back another $9.99 a month. Now, to be fair, Gokivo does give you plenty of other features for your $0.99, but as you can see on the App Store review board, most people believed they were getting the turn-by-turn functionality with that money as well.

picture-311Part of that was Gokivo’s somewhat tricky wording when the app first launched. That wording has been cleaned up now, but it’s still not good enough. Basically now you have a series of asterisks on the app page sidebar denoting the most important part of the app: That it’s $9.99 a month to use the turn-by-turn features.

Apple should create an obvious way to see that these type of apps feature in-app purchase components as a key part of them. Hell, there should be a prominent label any app that uses any in-app purchases, so consumers know what they’re potentially getting into. This should definitely be on the App Store page for these apps, but it should also probably pop-up when you go to download the app itself. Developer-made text asterisks are not going to cut it.

But it’s probably unfair to pick on Gokivo, because it is just the first of many turn-by-turn GPS apps that are likely to hit the App Store. And all will likely have the same type of pricing structure. It make sense, most GPS apps/units do charge a monthly fee, so why shouldn’t the iPhone versions? That’s why I think this is just all about the way Apple highlights these apps.

But that’s a reasonable example. Just wait until the first $0.99 games come out that feature basically no content for that price, and force you to buy additional content to gain any experience. Gaming is the obvious one, but really, it could be any app that does this. And I think those are coming.

Maybe Apple expects its app screeners to look to make sure all apps have an appropriate level on content for the $0.99 price point. But that’s a foolish dream given what we’ve seen so far from these screeners.

And what else is a bit annoying to a number of developers I’ve talked to, is that Apple is forcing you to charge at least $0.99 to have in-app purchases as an option. As I understand it, this is because Apple wants to maintain a section of the App Store that is totally free. But by doing that, it’s sort of creating situations like the Gokivo app, where it appears like they’re charging only $0.99 upfront to be deceptively cheap — that’s probably not the case, but it looks like it. And that’s a problem. Because it could make a lot of apps look like classic bait and switch ones. And why do that, when real bait and switch ones are coming too?

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