What is the big deal with the in-app purchases? Well, Apple wants to 'encourage' app developers to offer additional content and services through the Apple infrastructure, using your Apple ID and password. There are theoretical advantages from an operational and security point of view for trying to filter all purchases through one channel, but the real reason for the Apple policy is that Apple wants its cut.

The policy states that purchasing done within an app must be done using the Apple system. Some apps, like the Amazon Kindle app, have gotten around this by not conducting purchases within the app--technically. Kindle purchases from within the app are redirected to the Amazon Website. So, Apple added another stipulation that if an app allows content to be purchased outside of the app, it must also provide the ability to purchase within the app using the Apple system.

Crushing The Little GuyOne app developer has already been forced out of business as a result of these policies. Amazon may have the financial resources to go head to head with Apple, but BeamIt Down Software--makers of the iFlowReader app-- selling books at a loss.

As long as iFlowReader could redirect users to a Website for book purchases, BeamIt Down software could manage a small profit from book sales. But, selling books within the app means giving Apple a 30 percent cut, which is more than BeamIt Down gets paid from the book publisher in the first place.

Bill Shock for ParentsParents learned the hard way that those in-app purchases add up quickly...even on "free" games. There are thousands of apps targeted at children that are available for free. Many of those free games, though, offered the ability to level up or purchase content from within the game, enabling children to rack up huge costs without parental consent.