Breaking Apple's Grip on the iPhone

wsj. ^ | MARCH 6, 2009 | YUKARI IWATANI KANE

[dennisw]

Apple Inc. faces a growing threat to its iPhone business, as renegade stores spring up online to sell unauthorized software for the device.

The developer behind some popular iPhone software on Friday plans to open a service called Cydia Store that could potentially sell hundreds of iPhone applications that are not available through Apple's official store. Users must download special software that alters their iPhones before they can run these programs.

Another small company plans a store called Rock Your Phone for iPhone users who have not yet modified their devices to make it easier to download and buy unauthorized applications. A third start-up is building an online store that specializes in selling adult games for the iPhone.

The new stores take aim at one of the underpinnings of the iPhone's success: Apple's App Store. Launched last July, Apple's online store sells thousands of applications developed by independent developers -- from games to news and entertainment features -- that customers can easily download to their iPhones, often for free or as little as 99 cents.

Apple, which collects a 30% commission from sellers on its store,

Apple maintains that jailbreaking an iPhone violates copyright laws. Mr. Freeman says software he created to modify the iPhone has been installed on about 1.7 million iPhones.

The alternative stores could cut into Apple's revenue at a time when software has become an important way for the Cupertino, Calif., company to continue profiting from iPhones, even after consumers have shelled out $199 to buy them.

[dennisw]

Very similar to the Psystar clone makers. Apple trying to suppress innovation by up and coming entrepreneurs. Because they cut into Apple profits a tiny bit

[ketsu]

Very similar to the Psystar clone makers. Apple trying to suppress innovation by up and coming entrepreneurs. Because they cut into Apple profits a tiny bit

Apple doesn't sell a product, they sell a brand. They protect it(their brand) religiously because that's what makes them money not their hardware itself. It's like Louie Vitton, the minute their products cease to be an "aspirational brand"(i.e., something that makes you feel like a member of an elite group for owning) is the minute they become another computer maker.

[dayglored]

> Very similar to the Psystar clone makers.

Not at all.

Apple sells SYSTEMS consisting of hardware + software. They make their money on the hardware (as any owner of Apple products can attest).

That's why they ENCOURAGE people to load non-Apple operating systems like Windows on Mac hardware.

But they DO NOT allow people to load Mac software on non-Apple hardware.

Think. Psystar sells hardware on which people load Mac software in violation of their license, so Apple must fight them.

Sure, the rogue applications for iPhone cut into Apple's profits, but not at all in the same way, or for the same reason, as Psystar does.

The problem with the rogue apps is that they necessarily get in the way of iPhone upgrades and changes to the operating system. Apple obviously can't warrant rogue systems.

> Apple trying to suppress innovation by up and coming entrepreneurs. Because they cut into Apple profits a tiny bit

On the contrary, Apple sets a high and constantly improving standard for idea creation and realization. The rest of the world follows shortly after with copycat versions that require a LOT of entrepreneurship.

Apple doesn't suppress innovation -- that is what they do themselves. They only discourage people from riding on their shoulders in violation of their licenses. Good lord, it's Apple's own product, of their own design and manufacture. They have the right to do what they're doing. They're not forcing anybody to buy their products.

There's a universe of innovation available for those who have original ideas. There's no excuse for whining that Apple gets in the way. They're not in the way of anyone with a truly original idea.

[dennisw]

Come on.... You have a few rogue applications or wish you did. You only have half an iphone without them

[Goldsborough]

Suppressing innovation? Hardly. A great deal of Apple's success over the years has been due to ensuring a quality end user experience via a "walled garden" model.

Not having to support every third party hack with a half baked idea while allowing some of these "innovators" to drag the user experience through their poorly coded digital hell, or outright malware, has been a pretty good way of going about business.

The nearly "anything goes" mentality of the PC world has never been something Apple has longed for, so they don't support that model via the EULA.

If one cannot make software up to the fairly mild technical and taste standards of the iTunes store, or within acceptable performance parameters of the iPhone's technical limits while running its OS and apps at the same time, perhaps one should reassess one's skill level, or their perhaps malicious intent, as they are violating copyright laws by encouraging "jailbreaking."

[dayglored]

> Apple doesn't sell a product, they sell a brand. They protect it(their brand) religiously because that's what makes them money not their hardware itself. It's like Louie Vitton, the minute their products cease to be an "aspirational brand"(i.e., something that makes you feel like a member of an elite group for owning) is the minute they become another computer maker.

You're partly right -- certainly the Apple brand has a cachet that no other computer/gadget brand can rival, and Apple fanboys are notorious for grabbing up whatever toy Apple comes out with next and declaring it "insanely great".

I find that kind of crap precious and annoying, but then I'm an old-fart computer designer who's been at this for 35 years and isn't impressed by the Apple cachet.

I do think they make some pretty damn good hardware and software, that if you're willing to pony up the scratch, works well and is generally worth the money.

But to say that the ONLY thing that makes the Apple brand is the "elite group membership" misses the fact that the reality behind the cult view is some damn good hardware and software.

[Swordmaker]

Wall Street Journal article on third party iPhone app stores... PING!

iBroke my iPhone Ping!

If you want on or off the Mac Ping List, Freepmail me.

[dayglored]

> Come on.... You have a few rogue applications or wish you did. You only have half an iphone without them

Actually I don't have an iPhone. I do have an iPod Touch that was a Christmas present -- I probably wouldn't have bought one myself.

I enjoy its portability, but it doesn't replace a real computer, for the things I do.

I have added two apps to my iPod Touch -- an SSh terminal app so that I can log into my servers, and the Kindle ebook reader, though I don't have any ebooks yet.

Both apps from the approved store, FWIW.

[Fred]

kewl... Libs like Jobs only want free market capitalism for themselves....

iphone...jailbreaked!!

[ketsu]

You're partly right -- certainly the Apple brand has a cachet that no other computer/gadget brand can rival, and Apple fanboys are notorious for grabbing up whatever toy Apple comes out with next and declaring it "insanely great".

I find that kind of crap precious and annoying, but then I'm an old-fart computer designer who's been at this for 35 years and isn't impressed by the Apple cachet.

I do think they make some pretty damn good hardware and software, that if you're willing to pony up the scratch, works well and is generally worth the money.

But to say that the ONLY thing that makes the Apple brand is the "elite group membership" misses the fact that the reality behind the cult view is some damn good hardware and software.

Luxury goods *do* have to be high quality. They don't necessarily have to have good quality control though.Apple's love for the latest and greatest has burned them quite a bit recently, the macbook pro I'm writing this on has a wonky GPU from Nvidia that isn't broken enough yet for Apple to fix.

[dennisw]

Among the programs that Apple doesn't allow is a free one called Cycorder, which turns the iPhone into a camcorder. Another program, which costs $29, dubbed PdaNET lets people use their iPhones as laptop modems to connect to the Internet.

Both apps seem very cool
You can definitely save on access charges when you use iPhone as a modem for your laptop
Jailbreak your iPhone is a no brainer
Steve will face a consumer revolt when he returns from sabbatical

[dayglored]

> They don't necessarily have to have good quality control though.Apple's love for the latest and greatest has burned them quite a bit recently, the macbook pro I'm writing this on has a wonky GPU from Nvidia that isn't broken enough yet for Apple to fix.

Sorry to hear you got bit by the Nvidia GPU snag. I understand (from the tech sites) that Nvidia overtly lied to Apple about the bad chips for months, so it's not too surprising that a bunch got into released production Macs.

I'm disappointed to hear that Apple refuses to fix your MacBookPro, though. That's lame.

[Goldsborough]

They might seem "cool," but both unauthorized apps were probably rejected for cause.

My guess would be the camcorder SW is likely both a memory and processor cycle hog while extending the OS in a way that Apple does not like. The laptop modem workaround was probably rejected at the behest of the carrier, as it undermines one of AT&T Wireless' offered services.

Any way it's parsed, jailbreaking violates the EULA. Watch for Apple to one day nonchalantly "brick" such phones, or simply disable/change the OS hooks the unauthorized apps rely upon, via an update to the OS.

[miliantnutcase]

I think I’m going to convert one of my PC’s to a “Hack-intosh” one of these days.

BTW, does Algore still serve on the board of that elitist company?

[ketsu]

Sorry to hear you got bit by the Nvidia GPU snag. I understand (from the tech sites) that Nvidia overtly lied to Apple about the bad chips for months, so it's not too surprising that a bunch got into released production Macs.

I'm disappointed to hear that Apple refuses to fix your MacBookPro, though. That's lame.

I'm really not that picky. It still works enough for me to get work done. If I beat on it enough it turns fun colors but other than that it's fine.

I've managed to get hit by some of the doozies of quality control.

My favorite(not really apple's fault here though) was my iMac that had the faulty capacitors from the Taiwanese company that stole a faulty capacitor recipe from another company. I had little Volcanos inside my machine. I got a new logic board for my trouble.

[Star Traveler]

The hackers are interested in doing this, but I can’t see the average consumer wanting to jail-break his iPhone. It really does cause problems and you have to watch out for the next update that comes along, because your previous work will “crash and burn”. Then you’ve got to wait for hackers to hack through the next update that caused your iPhone not to work any more... LOL...

Believe me, after one or two times of that, the average consumer will say “Forget that sh*t!”... :-)

—

But, let me tell you about the fantastic thing about the Apple iPhone online store for the programs there. There was one guy who got an application out (a simple one) and sold $250,000 worth of a $5 app, in about two to three months. Wow!

What makes it fantastic, is that Apple hosts it for you, puts your “wares” in front of everyone’s face that has an iPhone, and all they’ve got to do is click on the application and it’s instantly downloaded to your iPhone.

You can’t beat the exposure and the absolutely seamless way of marketing the product. If you’ve got something worthwhile (and not like the Windows junk that they put out...) then you’ll make money selling your app, the “easy way”...

[dennisw]

The laptop modem workaround was probably rejected at the behest of the carrier, as it undermines one of AT&T Wireless' offered services.

My thought too. I would say tough luck At&T

Any way it's parsed, jailbreaking violates the EULA. Watch for Apple to one day nonchalantly "brick" such phones, or simply disable/change the OS hooks the unauthorized apps rely upon, via an update to the OS.

Apple won't be bricking. Too much ill will
OS update is the way to go

[Star Traveler]

You said to another poster — “Come on.... You have a few rogue applications or wish you did. You only have half an iphone without them”

Ummm..., I can answer that for myself. I tried the jail-break thing and did it for about two updates. I just got tired of the problems with the apps and then having to wait for the “hacker/crackers” for the next jailbreak to fix the recent update.

I wanted the update, so I would have to revert back to the clean system do the update, see how it worked, then later update again, do the crack and so on. It got to be tiresome and those apps (some of them, anyway) are not all they’re “cracked’ up to be... LOL...