Apple expands e-commerce on iPhone

iPhone developers will be allowed to perform transactions within free applications

Apple has begun allowing in-application transactions for free apps on its iPhone and iPod Touch handsets.

The company said that developers would be allowed to perform transactions within free applications offered through the company's App Store service. Transactions had previously been available only in paid-for applications.

The addition of free apps to the payment service will allow developers to create one version of an app, allowing the user to pay to update to a premium version. Developers had previously been forced to create separate free 'lite' versions and paid-for 'premium' versions.

Apple also suggested to developers in a mass email that, by using a single version, studios can eliminate the user and developer hassles associated with migrating to a separate version of an application.

In addition to allowing users to purchase different versions of a game from a free download, the new feature can also allow developers to find new ways to monetise their applications.

Apple suggested that premium features such as content subscriptions, in-game upgrades and additional content could now be offered on an app that is an otherwise free download.