iOS developers are well aware of the shift in price models away from charging up front, to free with In-App Purchase.

I have been pretty resistant to this change, especially in the light of the forthcoming ability to host preview videos on the App Store. The rationale is that getting people to buy your app without evaluating it is a massive hurdle, and a video preview could help with that.

Now I find myself having a change of heart.

Our new app needs to go live before we can do all the work needed to adopt iOS 8 — something that is likely to make it iOS 8-only as we want to go deep with iOS 8 eventually and not have to maintain two code bases.

I was reminded by Marco Arment speaking on one of the many podcasts he’s been on recently, about his similar problem with Overcast — that iPhone 4 will not be supported by iOS 8.

If we launch soon and charge iPhone 4 users to download the app, they will legitimately be pissed if a few weeks later we cease providing any updates for them as we switch to iOS 8 only.

Marco’s solution with Overcast was to make it free with IAP, and to detect iPhone 4 users so that the app can give them the full set of features (AKA “Unlock Everything”) for free. After all, you can’t really complain about lack of updates when it cost you nothing.

I can’t see a better solution than this for the iPhone 4 problem, which means we have to think what parts of the app we can charge for with In-App Purchase. With apps that do not have an obvious consumable, such as coins in a game, this can be rather tricky.

That your purchasable items are hard to define is not news. The flip side is that I’m warming to the possibilities of the app being free and being able to have many more users, who perhaps pay a little for some features they need, but less than the full “sticker price” would have been.

What is causing me more difficulty is that “Unlock Everything” is an attractive model for its simplicity, but is a potential problem for future revenue, as well as possibly reducing total revenue. We want to build sustainable businesses.

In Marco’s case, Overcast 1.0 has two premium features – Smart Speed and Voice Boost. There is only one in-app purchase, to “Unlock Everything”. There are other features included, but most feel like hobbling usage rather than adding great functionality.

At least this is the case for now.

What happens when a developer sells like this and adds more premium features later? In the old pre-pay model there would no further charges… until the developer saturates their market and has to release a separate 2.0 app “rewritten from the ground up” or to support a new base iOS version. If you’re paying for specific features you can see how the 2.0 equivalent of an app need not be a separate app, but you pay for the feature set it provides.

This is the kind of model Apple follow – they likely rewrite their apps a fair bit but they don’t add new discrete “2.0” apps to the store. The option they added to set “this build is the last good build for iOS version X” makes this pretty clear too, in terms of drawing a line at SDK epochs where the app can’t feasibly continue to support both old and new iOS versions.

So it would seem that “Unlock Everything” is an economically inefficient use of In-App Purchases. I’m no economist but I sense that money is being left on the table, and customers who want some features but not all could feel they are overpaying (yes, we’re considering that £2.99 may be an overpayment for software — it’s a sad world) or worse may not purchase anything at all.

We have after all been told to show the user exactly what they will get for their money, and this naturally leads people who don’t want to spend money to have an internal dialogue about all those things you listed that they will never need.

So I find myself considering per-feature purchases with low item prices, and an “Unlock Everything” that is slightly cheaper than the sum of its parts or, perhaps obtusely, a bit higher than the sum of the parts.

You see, if we’re charging per feature, when we add new features we should charge for them shouldn’t we? Over time you have an increasing cost of ownership for people who buy many but not all features, and possibly a constantly rising “Unlock Everything” option too. Do you grandfather in all previous users who bought “Unlock Everything” to give them all new features in perpetuity or do you not and risk their wrath as they complain that they paid for everything in advance but now you want more from them for new features? Do we add a caveat “Unlock Everything (for some definitions of everything)”?

When you look back at this landscape it feels awkward to break down by feature… And yet getting £0.99 for one feature from 50% of users would be pretty great compared to nothing at all because they are too cheap to buy the full package at £2.99 — which is essentially the assumption underlying free downloads, that most people will not even pay £2.99 for an app.

Those people who buy one feature for £0.99 may continue to buy more over the coming years, providing the holy grail — recurring income, without having to release a separate app every couple of years, or complain about lack of upgrade pricing,

It is true that charging for each headline feature makes it start to feel scummy and complicated as the features increase over time. The code base will suffer a bit, and so will the UI. You may be accused of pushing people to “Unlock Everything” because of the befuddlement resulting from presenting them with fifteen different features to buy.

Then again, perhaps “Unlock Everything in Version 1” is the way to go with this, alongside per feature micro purchases. Then you can release a 2.0, offer a discounted “Unlock Everything in Version 2” IAP, and keep everyone happy?

Even if you had, say three tiered purchases that were not for specific features but a conceptual level of commitment (bronze, silver, gold), the user would not know the value of these as they can only understand it in the context of what the application features are right now, and have no idea what the correct tier to purchase is for the future. So then you’d need purchases for upgrading from lower tiers to higher I tiers.

It is all so messy, and there are many cross-cutting business concerns.

Anyway, I’m very interested to know what other people think and what their experiences have been.