Developers Looking To Set Up App Store Alternatives On The iPhone

from the competition-is-good dept

We all know about the somewhat "benevolent dictatorship" position that Apple holds concerning its iPhone App Store -- at times arbitrarily banning apps from the store. This has (reasonably) upset some, who feel that it's not particularly fair that Apple gets to decide what works and what doesn't -- and now a few are even looking to set up alternative app stores, though they'll only work on jailbroken iPhones. The article speculates on whether or not Apple will send its lawyers after these upstarts, noting Apple's decision to file a protest against an attempt to have the Library of Congress make clear that jailbreaking an iPhone does not violate the DMCA. However, if Apple is smart, it makes sense for them not to do so. After all, they make more money from each phone sold -- and increasing the value of the phones by allowing more apps to run on it should only help sell more of the devices.

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Opening Amazon's Walled Garden Could Prove Tricky

from the wireless-worries dept

Mike Arrington offers some unsolicited advice to Amazon about how to expand the market for the Kindle. In a nutshell, he thinks Amazon should aggressively license the Kindle hardware specs to third parties, and allow authorized vendors to use the Kindle brand. Amazon would require licensees to use the Kindle store, and would share the associated revenues. There's a lot to be said for a plan like this. The key to long-run dominance of many high-tech industries is to be the platform around which other firms build their products. Amazon's got a solid product with a fair amount of buzz at the moment, but that could easily evaporate if another company comes along with a more compelling product. Getting a lot of third-party vendors to build products around the Kindle ecosystem could help establish it as the standard e-book platform.

The difficulty with opening up the platform is that the Kindle business model—particularly the wireless aspect—depends on limiting the Kindle's functionality. Amazon is able to offer free cellular access for the life of the product in part because it controls the applications that will run on it, and can therefore guarantee to cell carriers that users won't start running bandwidth-hogging applications on it. And Amazon is willing to pick up customers' bandwidth bills in part because it charges premium prices for content, some of which is available for free off the open Internet. So if Amazon licensed the Kindle name to third parties, it would have two choices. It could tell the vendors they're on their own in terms of negotiating their own wireless plans, which would be a headache for the vendors. Or, if Amazon wants to bring third parties in under its own wireless umbrella, it will presumably need to impose some draconian restrictions on the functionality of the Kindle clones. And how many vendors are going to want to sell Kindle clones that have all the same limitations as the original?

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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Openness Is A Winning Business Strategy

from the it's-not-just-a-philosophy dept

For some unfortunate reason, there seems to be this idea that "open" solutions are somehow a less feasible business strategy. There are still those that sneer at open source companies as somehow being less-than-true-businesses, despite an awful lot of evidence to the contrary. But beyond just being a good business strategy, it's worth pointing out that "open" solutions will almost always win in the end, because they simply provide more opportunities. For years, AOL insisted on a walled garden strategy -- and in the mid-90s there were many who believed that AOL's proprietary system would "beat" the wider internet. How's that looking these days?

More recently, there's been concern about the various "walled gardens" in the mobile space -- which folks like Walt Mossberg have referred to as "the Soviet ministries." Jonathan Zittrain has been beating the drum, insisting that a closed system, like the iPhone's, is a dangerous trend. However, it seems quite like looking at AOL vs. the internet in the early- to mid-90's. While the proprietary iPhone system may seem a lot better at first, there are problems under the surface -- and openness is coming to the rescue.

Now, we've been beating on mobile providers for their silly "walled garden" approach for years, so you'd expect that maybe we'd be pessimistic. But, competition does wonderful things for innovation, and Apple's presence in the market is driving everyone else to become a lot more open. Hell, even Apple is now a lot more open than it was just a little while ago, when Steve Jobs thought that 3rd party native apps would ruin the iPhone. He changed his mind when he realized that the iPhone needed a more open app environment to compete with what was coming down the road from others (competition drives innovation again).

But, Apple's iPhone apps aren't really that open -- something that we warned would be an issue. That's getting some attention now as Apple is, without explanation, making some apps disappear completely, without even telling the developers why. That will cause one (or maybe both) of two things to happen: developers will start concentrating greater efforts on other, more open, platforms to avoid having to deal with the mysterious Apple gods, or Apple will have to give in and be much more open itself.

In discussing this phenomenon, Princeton's Ed Felten points out:

Generally, the closer a system is to being open, the more practical autonomy end users will have to control it, and the more easily unauthorized third-party apps can be built for it. An almost-open system must necessarily be built by starting with an open technical infrastructure and then trying to lock it down; but given the limits of real-world lockdown technologies, this means that customers will be able to jailbreak the system.

In short, nature abhors a functionality vacuum. Design your system to remove functionality, and users will find a way to restore that functionality. Like Apple, appliance vendors are better off leading this parade than trying to stop it.

Openness isn't just a business strategy -- it's the natural evolution of the marketplace, because, in the long run, it will be the business strategy that succeeds.

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Apple's Walled Garden Will Hurt iPhone Innovation

from the barriers-to-entry dept

The release of Apple iPhone SDK got a ton of attention on the blogosphere. Personally, I found the announcement to be a huge disappointment, because the rules for getting applications on the iPhone are chock full of restrictions. TechCrunch notes some of the major ones: No VoIP over the cell network, no exchanging data between applications, no multi-tasking (third-party apps quit when you switch out of them). But the more serious problem isn't strictly technical, but contractual: the only way to get third-party applications onto the iPhone is through Apple's "App Store." And Apple plans to carefully monitor the apps available through the store. Apparently "porn, privacy-breaching tools, bandwidth-hogging apps, and anything illegal" are examples of what will be off-limits, but that's not an exhaustive list.

The problem here goes beyond the mere possibility that Apple might block apps that some users would find useful. The more serious problem is the effect that the approval process will have on developers. Given how vague the rules are (what counts as bandwidth-hogging?) and that Apple is free to change them at any time anyway, it's going to be risky for a developer to start developing an iPhone app that Apple might reject. TechCrunch wonders, for example, if Apple would allow an app to download songs from Amazon's MP3 store. To avoid a nasty surprise at the end of the development process, any serious developer will want to talk to Apple ahead of time, but negotiating the feature set ahead of time could delay the product by months.

Perhaps most importantly, these barriers are going to be a serious disincentive to casual tinkering. Some of the greatest applications on the Internet -- including email and the Web -- were developed by one or two guys without the support of a large organization behind them. They were able to deploy their applications because the Internet (and the ARPANET in the case of email) didn't have any kind of approval process. You could just install your application and start using it. On an open iPhone platform, the killer mobile app might have been developed the same way. But if a developer has to spend a lot of time arguing with Apple's iPhone bureaucracy, they're likely to give up and develop the app for an open platform like Google's Android instead.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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Kindle's Overpriced Content

from the hello-walled-gardens dept

On Friday, I expressed skepticism that e-book technology has reached the point where it will overtake the paper book. Now Amazon's PR blitz has begun, and so we're getting more details about the Kindle's features and pricing. I'm not impressed. First, there's the obvious point that the device's DRM will make a lot of customers wary of getting locked into Amazon's proprietary platform. But the even bigger flaw is the pricing model. Apparently, Amazon will charge you $1.99 for public domain books like Bleak House. Kindle also provides you with access to blogs, but only 250 of them (including Techdirt), and you have to pay at least a dollar a month for the privilege of reading what you can see here for free. And you can subscribe to the New York Times, but you have to pay $13.99 per month for that. This really seems like a strange pricing strategy. A lot of consumers will balk at paying for blog content they've always gotten for free online. Likewise, giving away public domain books would be a good way to spur adoption of the device at very low cost to Amazon. And it's weird to charge so much for a digital newspaper at the same time newspapers are dropping their paywalls online. Even the price for new books, $9.99, seems too expensive. Publishers don't have to print, ship, and stock e-books, so their costs are obviously a lot lower. On top of that, the demand for a lot of books is likely to be quite elastic—cut the price in half and you could easily double the number of sales.

The one undeniably innovative thing about the Kindle is the free wireless EVDO access. The limits on access to Internet content may be an attempt to keep the bandwidth consumption down. But in a world where you can get an unlimited data plan for your iPhone for $20 per month, they should at least have an option for a flat rate "all you can eat" data plan, which would allow you to access Internet content and subscribe to an unlimited number of blogs, newspapers, and public domain books. Bezos obviously wants this to be the iPod of the printed word. But one of the crucial factors behind the iPod's success is that it gives you free access to content in open formats. You can rip your CDs and listen to them on an iPod. You can subscribe to an unlimited number of podcasts. With the Kindle, in contrast, Amazon apparently expects customers to buy an unfamiliar proprietary device, and then pay a premium to read content like blogs and public domain books that's available for free on the Internet. Somehow I don't think that very many people are going to go for that.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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Do Walled Gardens Promote Innovation?

from the not-that-I-can-see dept

A former chief economist for the FCC, Thomas Hazlett, has written an article claiming that walled gardens promote innovation -- which seems like an extraordinary claim. Unfortunately, he completely fails to back it up in the article itself. Instead, he mostly focuses on why regulating open access in the wireless space doesn't make sense -- a statement we tend to agree with. Regulating mandatory openness is excessive, and hopefully unnecessary as the industry realizes that openness actually provides more value and opportunity. It's on that point that we appear to disagree with Hazlett. He claims that walled gardens are better for innovation, arguing that innovations like the Blackberry and the iPhone came first to US networks because of their closed, rather than open, nature. That's not necessarily accurate. It's much more likely that both came to North America first because both Apple and RIM are based in North America. And, it's worth noting that both have expanded overseas.

Hazlett then uses the example of i-mode as another example of a success story of a walled garden -- but ignores that it was actually the freedom and openness aspect of i-mode that made it an initial success -- and it was the closed nature that later limited it. By enabling many developers to compete, real innovations were created. It wasn't because it was a walled garden, but because the folks behind the project recognized the benefit of being quite open within that platform. Hazlett also seems to ignore the longer term history of most walled garden platforms. They may have initial success by creating a limited sandbox, but almost all of them eventually suffer as people go in search of more open and more innovative platforms. That's what happened with AOL. It's also partly what caused i-mode to stumble when it was unable to keep up with the innovation of others in the space. So, yes, it's true that mandatory openness may not make sense, but it's a huge leap to go from there to saying that walled gardens promote innovation. Walled gardens simply leave open the opportunity for someone else to innovate a more open solution.

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