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.

[coconutt2000]

Luxury products are getting killed these days. Apple will be joining their ranks. Will post a loss within 12 months. One plus for Apple is the stock price is stable despite Steve's sabbatical. An end to the cult of personality.

With billions of dollars in cash and short term investments, Apple is well positioned to use the slow down for research and development. If Jobs returns, expect him to repeat his past statements to the effect that Apple will just R&D their way out of the recession. Plus, a slow down in sales will mean that Apple will probably start focusing even more on increasing the quality and value of their products at every price point in order to entice buyers and switchers.

In the long run, if Obama doesn't succeed in completely trashing our economy into a decades long recession, Apple is likely to thrive in the next recovery, just as they did in this last boom cycle.

[Swordmaker]

You can buy a Mac from Psystar but uncle Stevie has siced his lawyers on them

Sorry, Dennis, but you cannot buy a Mac™ from Psystar... Mac™ is trademarked. That's why Psystar had to quietly change their original monicker from OpenMac to just Open.

Incidentally, adding the optional gear needed to make that $550 Psystar Open features somwhat close to the off-the-shelf $1199 iMac brings the Psystar price to $1132. Adding Shipping and Handling brings your Psystar to a grand total of $1211.

The iMac shipping is free so the grand total for the iMac is $1199. That's only $12 more expensive than a name brand iMac... and you still have a slower processor (2.53GHz Psystar to 2.66Ghz iMac), a smaller monitor (19" v. 20"), slower firewire (400 v. 800), no video camera, no sound, no iLife suite of software, and no world-class free support from the Apple Genius bars.

Where's the savings?

In addition, Apple is now offering a 2.4GHz 20" iMac in their Refurbished store for only $849.

[Swordmaker]

Luxury products are getting killed these days. Apple will be joining their ranks. Will post a loss within 12 months. One plus for Apple is the stock price is stable despite Steve's sabbatical. An end to the cult of personality.

March 12, 2009:

Apple ups Mac build plans on strong reception to new desktops

[Proud_USA_Republican]

Stop being so dramatic. I didn’t say Apple was going to cease to exist next year. I simply stated that sales will be dramatically impacted this year because of the recession and that with Steve Jobs no longer the figurehead of the company, that will impact its business and image as well. Apple will be just fine longterm. They have billions in cash reserves to ride out this storm and still invest heavily in R&D. But I see their stock price coming down this year. Sales are going to take a major hit.
And,
Apple was able to take advantage of all the bad press on vista and get some people who had never tried one to try a MAC. They did a great job of being able to tie in the MAC products, with the Ipod and Iphone. But if Windows 7 is an improvement, Apple won’t be able to use that as much of a sales weapon anymore. Plus given the current economy, people are also going to be looking at prices much more carefully. MACs are more expensive for the same level of hardware, then PCs with the same level of hardware.

[dennisw]

Apple was able to take advantage of all the bad press on vista and get some people who had never tried one to try a MAC. They did a great job of being able to tie in the MAC products, with the Ipod and Iphone. But if Windows 7 is an improvement, Apple won’t be able to use that as much of a sales weapon anymore. Plus given the current economy, people are also going to be looking at prices much more carefully. MACs are more expensive for the same level of hardware, then PCs with the same level of hardware.

Windows 7 will be a Mac killer. Vista is OK by me but obviously got  a lot of bad press

7 Ways You Will Save Money with Windows 7
Microsoft has a hit with this great upgrade
http://www.usnews.com/articles/business/technology/2009/03/12/7-ways-you-will-save-money-with-windows-7.html

 

[dennisw]

Incidentally, adding the optional gear needed to make that $550 Psystar Open features somwhat close to the off-the-shelf $1199 iMac brings the Psystar price to $1132. Adding Shipping and Handling brings your Psystar to a grand total of $1211.

Only problem is the $550 Psystar Mac is "good enough" for most people. Maybe add memory and you can get 2 x 2gb for $17 these days

[SunkenCiv]

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.

*Very* well said! Thanks dg.