Apple’s mysterious approval policies for its App Store have managed to infuriate developers and draw the attention of congressional do-gooders. So why does it stubbornly insist on being the exclusive distributor of iPhone apps?
The latest in a long line of dust-ups involves a developer named Perfect Acumen, which had managed to cram 900 relatively worthless apps onto Apple’s shelves before being banned last week. That move followed Apple’s graceless rejection of the official Google Voice app, which prompted an FCC inquiry and spurred speculation that AT&T may have demanded the ouster.
I understand Apple’s desire to monitor its retail space. Retailers have a right to determine what they stock their shelves with, of course, and can even differentiate themselves based on the merchandise they carry. And playing nanny has surely saved AT&T a bundle in customer-service calls from whiny users who, say, stupidly spend $1,000 to turn their phone’s screen red.
But Apple would be well-served to allow other outlets to offer iPhone apps, or at least permit users to jailbreak their phones to access downloads from other retailers — some of which are already gaining impressive traction among rogue developers and iPhone users. (Apple is currently lobbying the U.S. Copyright Office to continue to prohibit consumers from jailbreaking their handsets to circumvent DRM restrictions for copyrighted material.)
Apple could position itself as the premier vendor of high-quality iPhone apps, culling the best — and perhaps the most lucrative — apps and leaving the chaff for competing outlets. Not only would the move appease an increasingly irritated community of developers (who have plenty of new options when it comes to smartphone platforms), it might help prune Apple’s already unwieldy library.
Yes, Apple would certainly lose some revenue if it allowed others to sell apps to iPhone users, but analysts generally agree that the company doesn’t make all that much money from downloads anyway. Instead, the App Store and iTunes exist to fuel sales for Apple’s hardware business, where margins are far larger. Which is why Apple rakes in 32 percent of handset-industry operating profits, but a mere 8 percent of revenues, according to Burnstein Research analyst Toni Sacconaghi.
Developers are already souring on the App Store in a big way, and contempt for the iPhone may be spilling over from early adopters and techie geeks into the mainstream. Apple could do a lot to mend fences with both camps by permitting third-party storefronts, and it could actually help boost iPhone sales by permitting controversial apps to come to market through alternative channels. And, hey, if the company doesn’t do it voluntarily, the feds may force the issue.