Apple's Application Store: Not Just For iPhones?

In an earlier article I discussed how Apple new iPhone application store will promote an avalanche of applications as developers flock to both a super cool hardware platform and a marketplace designed to promote their creations to every iPhone owner.

In fact, the store is the only place where the average user can acquire third-party applications. A system described by many as being a "walled garden" around the iPhone and the iPod touch.

A point that has so many profound ramifications that one has to ask: can Apple enforce it? And if so, will they extend the concept to its obvious conclusion?

But first, a story.

In this day and age, being an independent software developer... well, sucks. One comes up with a great idea for an application or utility, spend weeks, or even months or years writing the code and zapping the bugs and polishing the interface until it shines. Biting the bullet, you even write the documentation.

Next, you figure out a method of distribution, create a website, write Google ads, and after much deliberation, determine a price you consider to be fair. The big day arrives, and with no small measure of pride you release your creation into the wild. A few blogs try out your product and rave about it. The bigger web magazines pick up on the trend, and you get even more publicity.

Deciding to focus on your creation, you quit your day job.

But after a while you notice that, while product registrations keep climbing, sales don't. Checking your database, you see that 70% of your "customers" have registered with the same three identical serial numbers. You exclude those numbers, and new ones pop up. You try a new scheme, and someone in Sri Lanka decides to remove the registration "nag" code entirely, posting their version to Pirate Bay.

Sales drop. You raise prices to compensate for the parasites, and sales plummet even further.

Sighing, and sick and tired of battling the pirates, you decide to go the "open source" route, offering your application for free, but charge for support. Unfortunately, you did too good a job back when you designed the silly thing—no one needs support.

Swallowing your pride, you decide to beg, putting up ads on your site asking for Amazon or PayPal donations. Those don't happen either, as everyone and their kid brother free rides, each assuming that someone else will pick up the slack.

This is the point where, in "alternative" models, you'd sell t-shirts and go on the lecture circuit. But no one wants a t-shirt for a task manager or disk utility, and besides, the lecture circuit's booked up with all of the Web 2.0 developers.

With bills piling up, you try going back to your day job, but that position's been filled. Next thing you know, you're spending your days welcoming people to Wal-Mart, and evenings asking "if you'd like fries with that".

While the last point might be exaggerating things, this is, by and large, the current state of the software industry. And in "niche" markets like third-party utilities and cell phones and PDAs things are even worse. Piracy and "sharing" are so rampant that many just don't bother.

But Apple's "App Store" changes that. Every application is signed, and the iPhone will only run signed applications. Applications downloaded from iTunes are encrypted with FairPlay and tied to your iTunes account, just like most of its downloadable music and all of the available movies and rentals.

So transferring a downloaded application from one phone to another won't work any more than would moving a movie. It's tied to your account. Altering the application's registration or copy protection code won't work. There isn't any. Grabbing the code and posting it elsewhere won't work either. It's encrypted, and besides, for most people the only place they'll bother to acquire applications is through the App Store.

Can you "jailbreak" a phone and get around the restrictions? Maybe. But as indicated, that's not going to help with the "commercial" applications sold through the store. I'm also fairly certain that Apple knows how each of the current solutions work, and precisely how to block them. They're simply waiting for their SDK to finalize and ship before they lock the phone down.

And most people won't bother. There's a relatively high percentage of jail-broken phones out there, but an official solution will lessen that number considerably due in part to the availability of third-party applications and also due to fears that messing too much with your phone will turn it into a $400 un-upgradeable brick.

Back in the heyday of VHS, copying tapes for friends was rampant. Then a small company named MacroVision came up with a way to protect commercial tapes from casual copiers. Blank tape sales suddenly declined. Yes, there were ways around the system, but most people simply didn't bother. It was too much of a hassle when all you had to do instead was visit Blockbuster.

I think that applies here as well. Apple has made a well-designed system where users can find applications and download them directly to their phone, if payment is needed, its automatically charged to their iTunes account. In this case I think convenience wins out. For a lot.

In fact, the is the very model that Amazon created for the Kindle, and one that's been touted by most as being it's very best feature. Get content anytime, anywhere. Quickly and easily.

Some developers may create applications outside of the store, perhaps to do "unauthorized" activities like VOIP over the cellular networks. But for the rest, I think being able to tap into the store's vast audience of people ready, willing, and able to pay for applications will prove entirely too seductive. Even authors writing free applications want people to use them.

All of which leads us to the final question we asked earlier: will Apple apply this model to software written not just for the iPhone, but for OS X itself?

It's possible. All of the pressures I enumerated above apply to the mainstream computer software market as well. And if it works for the iPhone as I think it will, I firmly believe that Mac software authors will demand their own version. After all, who doesn't like being paid for their work?

And since it enables yet another revenue stream, I suspect that Apple won't mind at all.

* * *Continued in The iPhone SDK: Promises Broken, Promises Kept.

Comments

[Luis Alejandro Masanti]

The "first step" is already done.
Go Apple Menu > Mac OS X Software...
Apple just has to "add" a Buy Now button as in the online Apple Store.
OK, that is not so nice as the new store, but it is already done. Why reinvent the wheel... It can get an iTunes-style front end.

[ML: Being able to "buy" is one thing. Code signing and FairPlay and programs tied to your account is quite another.]

[Michael Tomlin]

Would never work for OS X applications....
What if I didn't want and refuse to create an iTunes account?
What if I didn't even use iTunes and the first thing I do when I get a Mac is throw iTunes out?

You can't make the assumption that "Mac user" = "iTunes user". And if Apple were to force users to create an iTunes account, you can be sure a lot of them would be up in arms.

It makes sense to have a system set up like this for a mobile device, because iTunes becomes the gateway/interface to the device.

[ML: Doesn't have to be an "iTunes" account, just an Apple Store account. Little difference buying there or from some other online site.]

[Rob]

..and someday Apple will remove that app they deemed to remove, and POOF there goes your money. Netshare anyone?

Or Tris, which was, some say, a name change away from being legal?

Or one day the developer decides to pull it for whatever reason and Apple uses their back door to deactivate it?

Soooo many scenarios for losing your app/cash.