While users havent thought twice before shelling out the requisite amounts to download softwares onto their iPhones ; a lot of applications available on the app store are plain old free. So how do these companies recoup their investments? Or what do they have to gain at all? Well in some cases its viral marketing (case in point, the must have aplication of iBeer).

but the vast majority of free apps dont really want to indulge in just marketing. They want some cold hard cash to stay afloat. But since they are so small, its difficult for them to get paid (users would prefer other known software makers). Thats where the ad managers step in. Already companies such as AppLoop, Pinch Media, Medialets, and PurpleTalk are offering ways to app developers to embed advertisements inside their applications.

However that might ruin Apples plans to do just that in the near future. Also by allowing 3rd party and thus napproved ads , Apple could be allowing the iPhone to become unstable. Both of these are complete taboos in Apples carefully constructed world of Macs and Pods.

However so far Apple has not taken any stand and is allowing the free apps to run with ads. Perhaps they shall ban it once they realise the potential of the whole market. Or maybe they would want to enter as a regulator.

Source