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March 06, 2009

Creating An Alternative iPhone App store

Breaking Apple's Grip on the iPhone - WSJ.com

Some entrepreneurs are beginning to offer alternatives to the Apple App store to provide applications for the iPhone. Apple has previously resisted similar efforts--for example, trying to block Real's effort to supply music for iPods.

Why might the App store be less than ideal for software developers and consumers?

First, Apple controls what applications are acceptable on its official App store. The controls seem not only to restrain unstable products or spyware, but also kinds of uses it disfavors, including apparently the use of the phone as a laptop modem, the use of the phone as a video camera, and the use of the phone to view pornography.

Second, Apple takes 30% of the cost of the application. This commission seems quite high given what is likely to be the marginal costs of its service, and seems to exploit its role as the monopolist retailer of iPhone applications.

There are three principal stumbling blocks for those who would offer an App Store-alternative: (1) DMCA anti-circumvention (though here there is a possible exception for circumvention promoting interoperability); and (2) agreements entered into by iPhone users upon purchasing the iPhone; and (3) the technological ability of Apple to render unlicensed applications useless.

Countries around the world will likely scrutinize Apple's role as exclusive software vendor. Of course others have sought similar constraints on software.  Mobile phone companies, video game machine vendors, and even printer manufacturers have sought similar restraints in the past, but often the hardware vendors have taken losses on the original product, hoping to make up the losses and make profits on sales of add-on products (that may well be Apple's model as well, making up losses through the service contract and through additional sales).

Posted by Anupam Chander on March 6, 2009 at 08:56 AM | Permalink | Comments (2) | TrackBack