Macopinion

The Real Revolution of iPhone OS 3.0

by Marc Zeedar macopinion@designwrite.com

There's been much talk about the forthcoming iPhone OS 3.0 Apple introduced this week. Everyone is excited to finally see copy and paste arrive on iPhone, as well as improvements such as search, landscape keyboards, and other niceties. And there are some amazing new things that will have longer-term impact, such as new APIs for programmers, including the ability for third party hardware companies to allow iPhones (and iPod touches) to control their devices.

But no one is talking about the one feature that is truly remarkable about iPhone OS 3.0.

It makes sense. The feature has to do with money, and it's impolite to discuss money. But especially in these times, money is extremely important. The iPhone is the hottest tech on the planet not just because it's cool and innovative, but because it is selling. And the App Store has turned the iPhone into the hottest marketplace because people are buying apps.

Like it or not, the financial side of the picture is critical for the future of the iPhone OS. If developers can't make money on the platform, they won't create apps, and without apps, the platform will die.

That's why I'm amazed no one is talking more about in-app purchasing. This is incredibly exciting and -- I will say it -- revolutionary.

In-app purchasing, to put it bluntly, is micropayments. We've been talking about micropayments for decades, but no one has succeeded. The two problems with micropayments is that the system needs to be:

• ubiquitous
• invisible

Current Internet purchasing systems fail on one or both of these counts. Paypal is getting closer to the ubiquitous goal, but still far too cumbersome and limited. Amazon's "one click" buying has the invisible part down, but it is limited to one website.

Apple's iPhone OS -- with the ability to embed web content right within a native app -- now has the ability to allow that content to be paid for. That is revolutionary.

One could argue that iTunes accounts are not ubiquitous. That is true in the "whole Internet" scheme of things. But within the iPhone/touch universe, they are ubiquitous. Everyone who has an iPhone has an account. The purchase process is the same for all users, in every app. It is invisible and simple.

And because iPhone can bring the entire Internet to it, you've now got a way to easily require the user to pay for access. Brilliant.

Paying for Stuff is a Good Thing?
Now some of you freeloaders out there are getting upset. You want your free content. Well, sorry folks, but the ride is over. With the new economy -- and yes, we are entering a new era, so get used to it -- the proliferation of free information is ending. Internet advertising is just not effective or lucrative enough to pay for all that content. Sure, huge sites can probably generate enough traffic to justify giving away stuff for free, but there are millions of tiny sites that just won't be able to keep up. Traditional media organizations are struggling as print readerships and advertising are down and the companies can't afford to keep giving away their product for free on the web.

But shutting down the website and requiring people to pay is extremely controversial and awkward. First, the whole method-of-payment thing is far too complicated. Say I'm writing a book on spiders and I see a link to an article on a scientific magazine's website. But the article is locked. I cannot read it unless I pay. My options are to:

• set up a unique account with this publication
• pay a not-insignificant fee
• possibly subscribe to the entire site even though I just want the one article

At this point I don't even know if the article's of importance to me or not. But the hassle of access is so great, I don't even bother.

Contrast this with the world of the future iPhone. I launch the magazine's iPhone app. It gives me some content right away (for purchasing the app), but the article I want is in the archive. There's a beautiful display and description/preview of the article so I can see it looks good and would be helpful to me. My choices are:

• buy just that article for 99 cents
• buy all the archives for $19.99
• subscribe to the magazine for six months for $4.99

I can do any of these options with one click and have immediate access. The system prompts me for my iTunes password and it's done. Apple handles all the ugly payment details. In seconds I'm reading the article. Beautiful. There's no unique login/password system I need to remember for this particular website/app, and it's secure as I'm not even sharing my financial details with the website (only with Apple). It's so simple and easy I'm far likelier to do this than the old web approach.

Even better, this identical approach -- the same universal payment system -- works in all my iPhone applications. I can now pay for my New York Times and National Review subscriptions via the same payment system!

No, this is not reality yet. But this will be happening and as it does, Apple's iTunes payment system is going to become the world's first successful micropayment system.

For those of you who still want free content, there'll still be some. Some of it may be cluttered with advertising, or perhaps in a form not as easily read (like sites that break articles into 20 smaller pages for more hits).

But for those of us willing to pay for content, it will usher us into a brand new era where digital content is actually useable and useful. Imagine sites where the design is for readability, not ad hits, where the goal is conveying you information quickly and accurately, not trying to get you to buy stuff. I picture powerful applications that offer customizable navigation, flexible formatting options, search, article translation, different article lengths (pick from summary, condensed, or full-length), and much more. All of those features cost time and money to create; they won't be offered for free via websites as sites are cutting back. But if people prove they are willing to pay for such convenience and access, sites will make the apps and offer the content.

One More Thing
Here's one more thought to stir your imagination. Right now Apple has only opened in-app purchasing to paid apps via the App Store. But what of the future? If this takes off, couldn't Apple add a way to incorporate this via Mobile Safari? Then websites, using custom Safari protocols, could securely allow you to purchase items -- anything they sell, digital or physical -- via your iTunes account!

And don't forget the rumors of an Apple iTablet device: a large-screen iPhone/touch would make reading all this content a dream.

Thus a true micropayment system is born.

macopinion@designwrite.com