November 12, 2010, 4:42 PM — To many companies and independent developers -- not just software publishers -- mobile apps represent something even more powerful and important than a brand-new platform to deploy apps on. It's a new and dynamic source of revenue, one with a lot of room to grow. And given how tough it can be to make money selling software at all, especially in this world of open-source and free Web apps, any proven way to make money in that field can become a magnet.
Just like there's more than one way to deliver software in general, there's more than one way to monetize mobile applications. The various strategies aren't conflicting, but complementary. Each app can use the business model -- or models -- best suited to it.
The line at the register
With mobile apps, the purchasing process varies wildly, depending on which operating system you're dealing with. On the iPhone, everything's done through one interface: the App Store in iTunes. Windows Phone 7 supports direct payment via credit cards and third-party billing of the customer's service provider. Purchasing through a service provider is convenient, but I imagine people might still opt for credit cards to avoid the possibility of spurious charges on their phone bills.
But with Android, the dreaded "F" word -- fragmentation -- comes into the picture. The main way to pay for apps through the Android Market is via Google Checkout, widely criticized for its bad end-user experiences. You can also pay the app merchant directly and there are a number of other merchant mechanisms ... all different. (PayPal has also recently been added to the mix.)
What's most lacking in Android right now is a single, consistent interface for payments. The most seamless solution would be an API that allows app purchases to be added to the carrier's bill (with user consent, of course), which would make the process of purchasing an application all but frictionless. This hasn't happened yet, but Patrick Mork, vice president of marketing for GetJar, a cross-platform mobile app store, claims that it is "right around the corner" and that Google has made no secret of its negotiations with the various carriers to make this possible. Integration with PayPal is also a step in the right direction, even if not everyone uses it.