After iPhone Live: Is AppleTaking Down iPhone's Walled Garden???Or Just Building A New Fence?
Now that the dust has settled from yesterday's Apple's (NSDQ: AAPL) iPhone event, here's the big question: is Apple actually tearing down the garden wall or building a new fence? Unfortunately, it will be hard to answer until we see exactly how Apple starts to throw its weight around. For starters, they've confirmed that they will block some apps, even if they don't fall into obvious buckets of malicious or porn. But it's unclear exactly what will be fair game. They said yesterday that VoIP apps will be allowed only on WiFi, not on the cellular network??? and, as Engadget points out, that SIM unlocking remains prohibited, too???but what about more ambiguous issues, such as building an app to purchase MP3s from an iTunes competitor such as Amazon? Where will it stop?
One thing is exceedingly clear: Apple's control. CEO Steve Jobs said the only way to sell an app is to go through Apple???on the App store or on iTunes: "If the developer doesn't want to distribute it through the App store, then they can't distribute their app to the iPhone." Although, he added, why wouldn't they want that kind of distribution? "We think this will be a boon to developers."
If that's the case, it sounds an awful lot like a carrier's walled garden today. And, in this case, carriers will surprisingly have zero control. They won't even be getting a share of the revenues???70 percent goes to the developer and 30 percent goes to Apple. If the app is free, Apple gets nothing. When I asked if this was truly the case, Jobs said: "We've struck a new relationship with the carriers, where Apple is responsible for the software on the phone, and we define the software on the phone. We are running the developer program, we are distributing the apps???you have (an) iTunes account with a credit card and you pay for one if you want to buy one. Really, this is our program and we are running it."
Again, I asked, so carriers won't be receiving a share of the revenues? Jobs replied: "We don't go into financial arrangements with our partners, but generally we like to see money going the other direction."
If that's the case, how does this change the mobile content business, if at all? Does a 99-cent MP3 download become more feasible? Do profit margins on mobile games go up? Or, will Apple block anything they don't like? As a commenter astutely asked on a previous post: Will Apple demand a cut of a free application that's advertising supported?
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