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Taking Back the Market

The Unwritten Rule Behind Apple's App Store Rejections

Tim Nash - 2008.10.02

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If you want to work with someone, don't attack or try to take over part of what they think of as theirs. This is a lesson many learn at school.

If you want to have and keep a partner, you make sure that you have their agreement before moving into their area, and anyone signing the SDK and submitting an app to the store is looking for a working relationship with Apple.

The iPhone is the key product for Apple's future. It is the first really successful new computing platform since the Internet. For many, mobile computers like the iPhone will replace PCs.

If someone is given the fart app and embarrassed by it, how does that make them feel about the iPhone?

If they are embarrassed in a professional gathering, the consequences will be even worse. At the very least it will lead to even stronger corporate monitoring of the App Store and what is allowed. At the worst it will lead to sexual harassment lawsuits, with the iPhone as a highly publicised part of the evidence. IT departments, many of which don't want to support the iPhone, will then use "problem apps" like this as a further reason for delay.

Netshare from Null River, the tethering app, looks to have been rejected because of the limitations of AT&T's 3G network. The combination of large iPhone sales, an immature network (even in major urban areas), and well publicised connection problems has doomed tethering for the short term. Walt Mossberg of the Wall Street Journal recently said that in the Washington, DC, metro area, AT&T promised to have some 800 towers ready at launch; it delivered 80.

Although it makes business sense for Apple and AT&T to support tethering when more bandwidth is available, clearly selling more iPhones and customer plans makes more business sense now.

Apple wants iTunes to be the distribution system for apps, podcasts, music, and video sales. Clearly Apple has few issues with internet music radio as Pandora, Last.fm, Virgin Radio, etc. all have apps in the store, but as these are run by businessmen, they may well have checked with Apple before writing the apps.

Podcaster provides an alternative download mechanism to iTunes for podcasts. If Apple lets Podcaster on the App Store, then companies with deep pockets and interests in music and video distribution will submit apps that access their stores. When Apple rejects them, a lawsuit will quickly follow, and allowing Podcaster risks weakening Apple's defense. Even if Apple successfully defends the rejection, the court may impose restrictions on what Apple can reject. Far better (and cheaper) for Apple to reject Podcaster.

At the end, let's remember this is business. Apple decided not to promote Podcaster through the App Store because it already offered a way of downloading podcasts. The author decided he had more to gain from the publicity surrounding the rejection than by reworking Podcaster. He then used iPhone certificates designed for beta testing to distribute hundreds of copies of Podcaster while asking for $9.99 per copy.

Apple issuing a set of rules for developers could only help those developers unwilling to apply the unwritten law. That is, help until a developer either decides the rules are unreasonable or that the rejection was not covered by the rules.

America is a litigious society. Nearly every quarter Apple has to defend an increasing number of lawsuits despite others being settled. This is a consequence of lawyers going where the money is - and Apple has over $20 billion in cash and short term investments.

A published set of rules would give lawyers another way of trying to get their hooks into that cash mountain. If they succeed, Apple could look at reducing the 70% developers receive from the App Store to cover settlement costs.

For Apple, the App Store is only a means to the end of selling more iPhones. Like the iTunes music business, it may grow to be usefully profitable.

However, what drives Apple now are the profits from hardware.

Tim Nash lives with his wife, her website on the area ariege.com, two daughters, a cat, and a dog in the French Pyrenees. He has worked for computer companies for more years than he cares to remember, lapsed for a while after the Apple II, but became a Mac fan when his wife introduced him to the IIsi. If you find his articles helpful, please consider making a donation to his tip jar.

Recent Taking Back the Market columns

No Verizon iPhone Any Time Soon, but Verizon May Have Another Apple Opportunity, 10.23. Put simply, the iPhone is a GSM device that Apple would have to re-engineer for Verizon's CDMA network. But Apple's tablet could benefit from Verizon's 3G network.
How Apple Will Beat Sony and Nintendo in Handheld Gaming, 10.16. The iPhone platform has more users than Sony's PSP, and it will pass Nintendo's DS platform within two years.
Palm Pre: Cutting Off Business Customers, 10.05. Palm contines to shoot itself in the foot by making the Pre increasingly unattractive to business users.
Competing Visions: Apple, AT&T, Google, the FCC, and Google Voice, 09.03. Apple wants to sell hardware, Google wants to sell advertising, and AT&T wants to sell you minutes. Some conflict is inevitable.
More in the Taking Back the Market index.

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