When I was at Apple yesterday, I was describing Posterous and our upcoming iPhone app to many people. Everyone asked me, “How much does Posterous cost?” It’s free. I think people at Apple don’t have an expectation for free software like people on the web do. At a traditional software company, you build something, then you charge for it.But people have a hard time paying for software these days. Google has definitely led the way in providing great free alternatives to desktop software, that have become the de facto tools for most users. That’s great, but makes it harder for new companies to charge money. Users aren’t willing to pull out their credit cards on the web (unless it’s at Amazon.com). And I never hear about people purchasing traditional desktop software, other than creatives who need Photoshop, Final Cut Pro, or other professional tools. This is partially because most machines these days come with great software (iLife, iWork). The exception to all this is the iPhone. The distribution model is magnificent. Every iPhone owner has an iTunes account, and every iTunes account has a credit card on file. Most iPhone owners probably already had one for buying music at the iTunes music store. So now these same people have an iPhone and can buy $0.99 applications with one click. Zero friction, it just appears on your iTunes statement. Even my mom does it. (This, btw, is the same on the Apple TV and it’s brilliant) I wonder how many people are buying software for the first time ever, now that Apple has made it so easy.