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Free and paid iPhone apps - in-app upgrade or two separate apps?

I'm trying to figure out whether I should have one app that is upgradeable to ad-free with in-app purchase or two separate apps (free version and paid ad-free version).

Intuitively it seems that having two separate versions would generate more revenue because presumably some people would directly buy the paid version instead of trying the free version first.

However, most of the two version apps I've seen are differentiated by functionality or amount of content rather than by the presence or absence of ads.

Is it appropriate, and more common than I realize, to have separate free and paid versions of iPhone apps where the only difference is whether there is advertising?
Dan R Send private email
Friday, June 28, 2013
 
 
Most application writers make a paid version and a free version (+ads), because that's what everyone is doing. That is cargo cult.

Let's stop to consider things a bit. When you do a freemium model, there must be a clear path from free to paid. Example: for Dropbox, you will add more and more files, until you need to pay up to get more capacity.
It is very easy to do such a model for mobile apps if you have a server component. Otherwise, the limitations you put seem artificial, like the X days trials of sharewares (I'm not saying that it does not work, just that it seems artificial).

So, with freemium, the usage growth must lead to the paid version.

Most app developers did not think this through, so they try to monetize their free version with ads. That is interesting only if you have lots of users, and they spend a lot of time in your app (that can work well for games).
The result: you have a lot of apps with free and paid version, with the only difference being the presence of ads. Don't assume that the main reason for upgrade will be to remove ads. Most users can put up with the constant advertisement.
By the way, if you have both versions, make the upgrade an in-app payment of the free version. Otherwise, people will not know what will happen if they have both versions at the same time,  if they can kepp their data, if they can safely remove the previous app, etc.

If you don't have a very large potential user base, and you think they are willing to pay, just publish a paid version. That will be easier to market, and you won't need to upsell them constantly.
That is what I chose to do for Pilot SSH: my market is in system administrators, the app spares them a lot of time for common manipulations, and there would be no clear way to separate free and paid version (limiting to one server is stupid, but adding public key auth in paid version would be feasible).
Geoffroy Couprie Send private email
Saturday, June 29, 2013
 
 
+1 for:

"if you have both versions, make the upgrade an in-app payment of the free version. Otherwise, people will not know what will happen if they have both versions at the same time,  if they can keep their data, if they can safely remove the previous app, etc."



AC
Reluctantlyregistered Send private email
Sunday, June 30, 2013
 
 
Either way, one issue to consider is what happens if you decide to discontinue the free offering.

If there is no in-app purchase, discontinuing the free offering is relatively straightforward.

If there is an in-app purchase, you would want to offer some way of grandfathering in customers who have paid.  This gets tricky.  You may want to review the WWDC video regarding changes in receipt validation.
John Brayton Send private email
Sunday, June 30, 2013
 
 
Great advice from all of you, thanks very much.
Dan R Send private email
Sunday, June 30, 2013
 
 

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