Apple to allowvirtual goods purchase from within free iPhone apps

Apple store (Reuters)pple told its developers on Thursday that it will allow the purchase of virtual goods in its free apps on the iPhone and iPod Touch.

The announcement is a big step forward as it could be the beginning of a virtual goods model.

App makers have been urging Apple to make this move for a while so that it can be as competitive on virtual goods as Facebook has become.

Apple previously allowed "in-app purchases," or purchase of goods from within an app, in paid applications on the AppStore. However, it refused to allow app makers from doing this in free apps.

But now it will allow the purchases of digital goods from within free apps. That’s important to fully flesh out a virtual goods model, where app makers can entice a user with a free app.

Then they can design hooks into the free app where they can get the user to make a purchase of virtual goods, such as a better weapon in a game. It thus becomes much easier to convert a freeloading user to become a paying user.