Innovation

Since the announcement of iPhone OS 3.0 in March and on the heels of the June WWDC, there have many rumors swirling about the possibility of a new model of iPhone as well as improved functionality built on the new operating system.

Buried deep in the iPhone OS 3.0 keynote was something which I believe to be very important. Basically, the new OS will offer an improved App Store, which opens many new possibilities for developers and consumers. Developers could sell more things on top of their apps, and consumers would be able to expand their experience with those apps. Apple has promised that improved OS will work within the applications, therefore you can purchase and upgrade new things through the app itself, even while the transaction still goes through the App Store internally. For example, an iPhone game developer could charge for additional game levels or digital content creators, such as magazines could charge for a subscription of 6 issues which ran out after a specific period of time.

What’s the opportunity here for Apple?

This got me to thinking that Apple has the ability and backend already in place to fill the void where Facebook, Google and Amazon have failed us. They could lead a revolution of publishers around the world monetizing content beyond your typical smart phone app. Picture a site that offers digital content subscriptions, collects membership dues on a periodic basis, or provides premium services on their page.  My theory is that Apple could transform your iTunes ID into a single sign-on (similar to Facebook Connect) enabling publishers to charge customers on a recurring basis using a single authorization anywhere digital content is sold.  I envision blogs, podcasts and mobile & social applications. Essentially what I’m talking about is a microtransaction using your iTunes log in.Anyone with a publishers account could now charge and earn significant income from a multitude of sources.

For me, this could do the same thing for online publishers as it did for the struggling music industry and in the same ways it created a marketplace for independent programmers.  Apple is definitely big enough and has the foundation in place to pull it off.

How I envision it working?

Here’s a quick and dirty mockup of how I envision an Apple payment program working on a site such as the NY Times.

Now this is all speculation, but I’d be interested to hear your feedback. Tell me how crazy I am in the comments below.

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