Jailbreak stores plot to plunder iPhone app revenue

Posted:
in iPhone edited January 2014
At least three groups are working to syphon cash from Apple's river of revenue between iPhone users and third party developers. Accomplishing that will require inducing more jailbreaking of iPhones, ensuring contention from Apple itself.



Following its existing iTunes game plan, Apple originally set up the iPhone App Store primarily to create a rich software library to attract the attention of potential phone shoppers rather than to make money on the software itself. The company proposed charging developers much less (a 30% cut rather than the more typical 40% to 70% of other online software stores) and handling all their promotion, updates, and sales transactions in the hope that an attractive market for mobile software would induce development.



The resulting success of the App Store has been a surprise even to Apple's executives. Mobile software downloads for the iPod touch and iPhone have been growing at a rate at least double that of the launch of iPod music sales, which had been a blockbuster event in itself.



On its six month path to the first half billion software downloads, Apple struggled to keep up with application requests from interested developers and wrestled with policy issues over the rejection of certain software titles based on content offensiveness, user privacy issues, and interference with the company's own goals, such as an attempt to build a copy/paste system using undocumented APIs.



Jailbreak wars



Those restrictions have resulted in a very successful App Store full of mainstream content without much that could offend anyone or result in spyware problems or piles of shoddy software that might significantly ding the iPhone's image. But it also results in complaints from groups that want to sell porn, or to access features that are not yet open to development. That includes video recording, Bluetooth features, and anything that wants to talk to external hardware peripherals through the Dock Connector.



Getting around Apple's restrictions means jailbreaking the iPhone, a step that bypasses its code signing security system to allow the device to run any software. That step complicates system software updates for Apple and opens the device to the spyware and adware business models familiar to Windows users that Apple worked hard to prevent from taking root in its new platform.



Apple has challenged attempts by the EFF to open up an exemption in the DMCA that would make it much harder for the company to stop the copyright infringement of its firmware and possibly even result in widespread iPhone software piracy that could topple the success of the App Store entirely, just as casual file trading gutted the music business.



Jailbreak stores



At the same time, some developers who got started on the iPhone prior to the release of its official Software Development Kit have sought to find funding sources for continuing their efforts. To most users, the jailbreak scene is now obsolete. However, there are still some types of apps that can't be delivered using Apple's official tools and store. Those developers can only give their tools away; they naturally want to sell their work, too.



Jay Freeman, the creator of Cydia, graphical wrapper for APT (Advanced Packaging Tool, a freeware software download tool for Debian Linux), wants to sell unofficial software in parallel with Apple's App Store for the same 30% cut, but without security code signing and without the quality control and content restrictions Apple imposes.



That would allow Freeman to sell his Cycorder video recording app, something Apple won't carry in the App Store because it accesses hardware features outside of the official APIs. It would also enable Freeman to earn a cut on sales of titles like PdaNET, a tethering app that would enable users to hog 3G mobile bandwidth to get a network connection on their laptop, a violation of Apple's service agreement with AT&T and forbidden under Apple's "no networking hogging" clause in its third party developer contract.



A Wall Street Journal article also cited two other attempts to similarly market unofficial software, one called Rock Your Phone, similar to Cydia, and another hoping to specialize in adult games. The key issue in each of these stores is Apple's right to run its own platform.



Who owns the iPhone platform?



"The overworking goal is to provide choice," Freeman told the Wall Street Journal. "It's understandable that [Apple] wants to control things, but it has been very limiting for developers and users."



Also writing on the subject of unofficial app sellers, InformationWeek complained that "developers continue to have applications rejected for things like ridiculing public figures, censorship that wouldn't be tolerated in print or other traditional media."



However, Apple isn't censoring speech by limiting what software it chooses to sell in its store or on its platform, any more than it is censoring speech by not stocking porn mags and political tracts in its retail outlets. Anyone can publish their opinion on the web, which is fully available, unfiltered, in the iPhone's web browser. The real issue is whether Apple has the right to build a platform it manages and secures as a competitive alternative to the unmanaged, unsecured mobile software platforms that already exist.



How Apple lost its Mac platform



In the early 80s, Apple gave up control over the emerging Mac platform to third party developers. The first step was that third party developers demanded that Apple not build its own office apps for the Mac as it had for the Lisa, thus providing them with greater opportunities for selling Mac software.



Apple's closest third party software partner, Microsoft, then took Apple's unique ideas (for a standardized graphical environment that was far more usable than its Xerox predecessors) and tied them to the existing IBM DOS PC monopoly, choking off Apple's hardware sales.



Microsoft then shelved support for its Office apps on the Mac in the early 90s, leaving Mac users without access to modern productivity software, despite the fact that Office had originated on the Mac as an Apple-allowed success story to appease third party developers rather than offering its own Mac office apps as it had for the Lisa.



Third party developers then got Apple to officially sanction their practice of patching the Mac's low level system software, which resulted in System 7's "Extension conflicts," which caused instability and crashing as well as throwing up complications to Apple's own ability to advance its software platform.



Successful platforms require leadership



Apple's failure to lead the classic Mac platform destroyed it within a decade. Palm similarly destroyed its Palm OS mobile platform by failing to aggressively incite developers to move with it, and instead simply bogged down and became irrelevant instead.



With Mac OS X, Apple accommodates new features as carrots to induce developers to stay current on its latest releases. It maintains a rapid pace of development and keeps users excited, ensuring that developers have an healthy audience to sell their products to.



Microsoft's Windows did the same thing in the 90s, pushing developers to adopt new features that would tie them closer to the platform. Microsoft's huge audience of users kept developers coming even as the company devoured them as competitors as it expanded its Office suite and moved into new markets from media playback to development tools to browsers to server products.



Jailbreak stores no threat?



Meanwhile, analyst Charlie Wolf for Needham and Company has issued an investor note stating that the risk of jailbreak vendors "cutting into Apple?s software sales" as suggested by the Wall Street Journal "misses the point on two counts."



"First, the rogue stores will be limited to selling applications the iTunes App Store won?t sell," Wolf argued, "largely offensive apps, not any of the 25,000 the Store has approved and is selling. So the App Store should experience no loss of revenues from the sale of rejected applications by competing stores.



"Second, as the story notes but fails to emphasize, the only purpose of the iTunes App Store is to lock iPhone owners to the iPhone and hopefully sell more iPhones to application-centric customers. As such, Apple manages the App Store as a breakeven operation." Wolf also wrote that "Third-party application stores could actually benefit Apple to the extent that they attract and lock in additional customers to the iPhone."



As noted in its comments on the EFF case, Apple doesn't necessarily see things that way, viewing jailbreaking as a threat to the iPhone's security model and an expensive support issue that generates millions of crash reports the company has to wade through. Additionally, because "rogue stores" are not seeking to build a platform but rather just to make a quick profit, they have no real interest in preventing software piracy. One of the main features of jailbreaking is that cracked phones no longer respect FairPlay DRM, enabling them to run stolen programs from any App Store developer rather than supporting the platform with micropayments of a dollar or two.



That threat to Apple's wild success in selling mobile software among so many failed previous attempts raises the stakes significantly, ensuring that the company will fight to keep jailbreaking out of the commercial mainstream. There's no doubt that iPhone 3.0, due for release this summer, will play a major role in that effort to make the App Store too attractive for competition.
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Comments

  • cu10cu10 Posts: 294member
    Market forces are driving this I believe.



    I wonder how long Apple can keep up its integrated way of offering services.
  • BuffyzDeadBuffyzDead Posts: 228member
    All Apple needs to do, is deliver what the people want.



    If you can get whatever application is available on a jailbroken iPhone (including "adult" applications through some age of consent purchasing T's & C's OR whatever.....)



    from Apple's official App store, then the jailbroken iPhone, and it's application store, will never survive.



    Simply give the people what they wish to purchase.
  • tenobelltenobell Posts: 7,014member
    Apple has been using a vertical business model for the Mac for 30 years.



    Quote:
    Originally Posted by CU10 View Post


    I wonder how long Apple can keep up its integrated way of offering services.



  • gqbgqb Posts: 1,934member
    I've essentially come to the conclusion that Apple's first troubleshooting step (whether at Genius bar or on phone support) should just be, wipe the phone... full reset, and download latest version, end of story (or doesn't work, new phone, end of story.)

    The phone then works, and the user can re-load existing music, apps, etc. No need to even ask if its jailbroken.

    But jailbreakers can't have it both ways. If they jailbreak, then they can go to 'dev team' to fix their mucked up phones.

    But Apple shouldn't have to spend one second of their time supporting jailbroken phones.
  • nagrommenagromme Posts: 2,834member
    Quote:
    Originally Posted by CU10 View Post


    I wonder how long Apple can keep up its integrated way of offering services.



    For a very, VERY long time. Because integrated hardware/software/services is a strategy with BIG advantages--for the consumer, not just for Apple.



    And disadvantages too. Look how long it took iFart to get onto the App Store! Some apps never did make it there, and maybe never will.



    If third parties can step in to fill a need, I say go for it!



    I suspect the need is small--do we really need fart apps to be approved more promptly?--but a small fraction of a big number (the iPhone market) may still be worth serving.



    My only interest in jailbreaking is to hack the UI. Which is fun--I did it to my clickwheel iPod--but not important enough to make me do it. For me it's just NOT worth the hassle: when Apple comes out with their OWN UI improvements (and some are surely needed) or whatever the 3.0 OS brings, I'll want that update--without having to worry about whether my jailbreak will cause me problems or not. And certainly without having to wonder whether my jailbreak-only apps will stop running.



    Because they could: Apple can block jailbreakers intentionally (which I disagree with strongly) but even if they don't, they surely won't waste time and money making sure their updates are jailbreak-friendly.



    So I wish jailbreak stores well, but I'll be cheering strictly from the sidelines.



    (I will NOT of course, cheer for all those who jailbreak to promote piracy, which I know is one big reason. And the only reason I MIGHT be persuaded to accept Apple taking action against jailbreaking.)
  • g3prog3pro Posts: 669member
    *yawn*



    Yet another indication that Apple is scared s***less about competition. They can't take any hit to their bottom line, so they attack anything that tries to compete.



    Sounds like Apple took a page right out of Microsoft's playbook.
  • probablyprobably Posts: 139member
    As long as they keep updating it with meaningful feature additions, they'll stymy jailbreaking's impact on sales.



    I know when 2.0 came out, I was enticed enough by the free iTunes Remote app to lock my phone back up. Since then I've jailbroken to check in and little of the process is seamless.



    Having to jailbreak in the first place to get to this store is not viable!



    Why does anyone think this is serious a threat to any aspect of the business? Enthusiasts will go for it and always try for it. Cydia offers tools to make lifehacker projects and the sort a dream, but the 2nd Gen iPod touch can't even be jailbroken by the average user yet after being on sale for months!



    And then in a handful more months, let's say we see 2.5 or some other significant firmware upgrade, everything is either broken again or you are forced to stay away from the new software underpinnings. This is, of course, a lesser problem if you ignore the likely different hardware of the next iPhone as a source of headaches.



    Getting jailbreaking software from a rapidshare or a torrent is not a serious effort.
  • hill60hill60 Posts: 6,959member
    It seems like a pretty stupid way to try and make money.



    Remove all copy protection from your applications and sell to people who obviously don't mind cracking their firmware.



    Wouldn't those same people get the same software "free"* from somewhere else?



    *free apart from spyware, adware, Trojan and other threats which are often included with "free" software sites.
  • jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by g3pro View Post


    *yawn*



    Yet another indication that Apple is scared s***less about competition. They can't take any hit to their bottom line, so they attack anything that tries to compete.



    Sounds like Apple took a page right out of Microsoft's playbook.



    You mis-spelled "Apple objects to criminals stealing their intellectual property without payment."
  • trip1extrip1ex Posts: 109member
    Not sure the article states the reason the Mac failed. I thought it was because Apple didn't follow MS's model of licensing out their OS/X and working with 3rd parties as much as they should have.



    MS's model allowed as cheap as possible hardware and easily upgradeable machines. That was much bigger back then when speed increases really did something for the everyday user.



    I also don't think App store is in trouble. It's open enough from what I can see. I am less sure Apple should only have 1 iphone hardware model.
  • tenobelltenobell Posts: 7,014member
    Hacking a proprietary system and profiting from other people work is not competition. Developing your own system and competing against a proprietary system is competition.



    Quote:
    Originally Posted by g3pro View Post


    *yawn*



    Yet another indication that Apple is scared s***less about competition. They can't take any hit to their bottom line, so they attack anything that tries to compete.



    Sounds like Apple took a page right out of Microsoft's playbook.



  • bouncingbouncing Posts: 1member
    I certainly don't see the collapse of the Mac form as being attributable too giving users and developers too much access to their own hardware. After all, IBM and Microsoft never seriously restricted much of anything and they won a vastly larger market with an inferior platform.



    Here's the basic fact that makes this all clear: Apple sold far more computers than IBM.



    Apple sold more units because they had a better platform. But Apple was the *only* player selling the platform and it's lonely at the top. And much like a lonely mountain climber, a lonely platform developer is unlikely to succeed.



    Apple had better software and (actually) better marketing than anyone. But if your marketing is twice as good as anyone else's, but EVERYONE else is selling a PC, you're still the odd man out.



    Unfortunately, Apple is repeating its, frankly stupid, mistake. The iPhone is undoubtedly better than the G1, but Google's Android platform (while not open) at least lets user install what they want, from whom they want. And if you're willing to fork over $400 up front, you can get a G1 directly from Google complete with root password and the ability to reflash the thing; with permission from Google.



    Just like they did in the 80s, Apple will sell more units than HTC, Nokia, Samsung, or any of the other hardware vendors. But those hardware vendors will have little choice but to use Google software, so in aggregate, Google will win and the iPhone will die.



    Steve Jobs is a better designer than a strategist. As long as Apple presumes to be able to control anything, they will always do well with innovative products and lose their advantage when their product is poorly copied by a company that understands the software world as it really exists.
  • tenobelltenobell Posts: 7,014member
    Welcome to AI.



    Part of the problem in your assertion, is the fact that no one company completely dominates mobile phones. In this case its not Apple vs PC. This is Apple, Nokia, RIM, Windows Mobile, Palm, and Android.



    The serious flaw in your assertion is that everyone will be forced to use Google Android, there is absolutely no evidence this will happen. Android has been unable to capture the same amount of marketshare as the iPhone over the same amount of time. There is absolutely no reason for Nokia, RIM, or Palm to use Android.



    Quote:
    Originally Posted by bouncing View Post


    Unfortunately, Apple is repeating its, frankly stupid, mistake. The iPhone is undoubtedly better than the G1, but Google's Android platform (while not open) at least lets user install what they want, from whom they want. And if you're willing to fork over $400 up front, you can get a G1 directly from Google complete with root password and the ability to reflash the thing; with permission from Google.



    Just like they did in the 80s, Apple will sell more units than HTC, Nokia, Samsung, or any of the other hardware vendors. But those hardware vendors will have little choice but to use Google software, so in aggregate, Google will win and the iPhone will die.



  • obs1970obs1970 Posts: 22member
    reasons the Jailbreak store won't work:

    1. Developers overall: With the current AppStore there is no software piracy. Why would developers support piracy?

    2. Apple will keep chasing jailbreakers with software updates enough to make any jailbreaker's life miserable

    3. The current model works exceptionally well

    4. The reason Apple fell behind in the Mac platform is that they sat on their bums from 1991-1996 and made no significant improvement to their OS (palm sounds familiar here) while their competition was offering much cheaper hardware with almost equivalent software

    5. The hardware price for the iphone is similar to all competitors. This was not true with mid 90s macs

    6. The iPhone's success will resemble the iPod's success (better than competition at equivalent prices) more than the mac's.
  • princeprince Posts: 88member, moderator
    Quote:
    Originally Posted by g3pro View Post


    *yawn*



    Yet another indication that Apple is scared s***less about competition. They can't take any hit to their bottom line, so they attack anything that tries to compete.



    Sounds like Apple took a page right out of Microsoft's playbook.



    Well when your "competition" is the widespread piracy and content devaluation that destroyed music sales and is ravaging the market for video and up-ending publishing and killing newspapers, then yes, it is scary.
  • princeprince Posts: 88member, moderator
    Quote:
    Originally Posted by bouncing View Post


    I certainly don't see the collapse of the Mac form as being attributable too giving users and developers too much access to their own hardware. After all, IBM and Microsoft never seriously restricted much of anything and they won a vastly larger market with an inferior platform.



    IBM immediately lost control of the PC hardware market because it failed to exert proprietary control over it in time. Within five years, it couldn't even market PS/2 against the clone invasion.



    Microsoft certainly benefitted from seeing its inferior platform spread, but Apple makes zero money on the iPhone OS and very little on marketing third party software. Exchanging its very valuable hardware market for nothing but "freedom" it no longer controlled would not be a genius strategy.



    Quote:

    Here's the basic fact that makes this all clear: Apple sold far more computers than IBM.



    Apple sold more units because they had a better platform. But Apple was the *only* player selling the platform and it's lonely at the top. And much like a lonely mountain climber, a lonely platform developer is unlikely to succeed.



    Apple had better software and (actually) better marketing than anyone. But if your marketing is twice as good as anyone else's, but EVERYONE else is selling a PC, you're still the odd man out.



    Unfortunately, Apple is repeating its, frankly stupid, mistake.



    This is the same "favorite mistake" Apple made with the iPod. Your arguments could also have been used four years ago to suggest that Apple should give away its multibillion dollar iPod market in order to "get rich" reselling DRM music to other hardware makers for mere millions (which a lot of people at the time were suggesting).



    Since much of the value of the iPhone comes from its secured, vibrant software platform for third parties, ceding this to third parties to run would also be "risky" to a superlative extent. Allowing third parties to set up a piracy-friendly substitute store (despite the assurances that this piracy won't be the main reason for doing it and that nobody will actually pirate anything rather than paying for it) will clearly damage Apple's ability to sell software and to sell hardware that could not longer reliably run that software.



    "Freedom" clearly isn't doing enough to make Android hotly competitive, which is why are markets are based on money rather than principled ideology about sharing and altruism. For people who aren't primarily interested in making money, the option to create software and offer it for free in Apple's App Store to a wide audience simply solves most of their needs.
  • nagrommenagromme Posts: 2,834member
    Quote:
    Originally Posted by obs1970 View Post


    reasons the Jailbreak store won't work:

    1. Developers overall: With the current AppStore there is no software piracy. Why would developers support piracy?



    I know what you mean, but the reason devs would support JB stores, in spite of piracy, is if their app can't be sold any other way. Better some sales than no sales! Apple rejected iFart, for instance (although they changed their mind). Not my cup of tea, but if I was the developer, I'd be happy to have a way to sell it if Apple's (vague and puzzlin) guidelines barred it.



    But Apple is improving their guidelines over time, so the number of good apps being rejected may shrink. We've got farting AND GPS now! (Not, as far as I know, combined into one app, though.)
  • jimdreamworxjimdreamworx Posts: 1,060member
    Quote:
    Originally Posted by AppleInsider View Post


    ... possibly even result in widespread iPhone software piracy that could topple the success of the App Store entirely, just as casual file trading gutted the music business...



    Please. The music business was not gutted. Some argue that it has actually increased sales. Not to mention forced the biz to reconsider how it offers its product; otherwise the iTunes Music Store may never have been.
  • abster2coreabster2core Posts: 2,497member
    Quote:
    Originally Posted by bouncing View Post


    Steve Jobs is a better designer than a strategist. As long as Apple presumes to be able to control anything, they will always do well with innovative products and lose their advantage when their product is poorly copied by a company that understands the software world as it really exists.



    Totally disagree. Jobs is probably one of the greatest strategist of all time.



    He developed the strategy first. Then he had the product designed and created, and then put the necessary action in place to make it successful.



    Probably the best example of his strategic prowess is the "The Untold Story: How the iPhone Blew Up the Wireless Industry." http://www.wired.com/gadgets/wireles...urrentPage=all



    http://www.pagelines.com/articles/st...keting-method/



    http://www.augie.edu/dept/bsad/facul...ocs/iPhone.pdf



    The fact that Apple sits with billions of dollars in the bank, continues to progress while others perch on the brink of bankruptcy and just keeps on dazzling its competition, defies the idea that anybody here could critique them so maliciously, let alone teach anybody anything.
  • halvrihalvri Posts: 146member
    Quote:
    Originally Posted by bouncing View Post


    I certainly don't see the collapse of the Mac form as being attributable too giving users and developers too much access to their own hardware. After all, IBM and Microsoft never seriously restricted much of anything and they won a vastly larger market with an inferior platform.



    Here's the basic fact that makes this all clear: Apple sold far more computers than IBM.



    Apple sold more units because they had a better platform. But Apple was the *only* player selling the platform and it's lonely at the top. And much like a lonely mountain climber, a lonely platform developer is unlikely to succeed.



    Apple had better software and (actually) better marketing than anyone. But if your marketing is twice as good as anyone else's, but EVERYONE else is selling a PC, you're still the odd man out.



    Unfortunately, Apple is repeating its, frankly stupid, mistake. The iPhone is undoubtedly better than the G1, but Google's Android platform (while not open) at least lets user install what they want, from whom they want. And if you're willing to fork over $400 up front, you can get a G1 directly from Google complete with root password and the ability to reflash the thing; with permission from Google.



    Just like they did in the 80s, Apple will sell more units than HTC, Nokia, Samsung, or any of the other hardware vendors. But those hardware vendors will have little choice but to use Google software, so in aggregate, Google will win and the iPhone will die.



    Steve Jobs is a better designer than a strategist. As long as Apple presumes to be able to control anything, they will always do well with innovative products and lose their advantage when their product is poorly copied by a company that understands the software world as it really exists.



    Yeah, see the problem with that idea is that people said the same thing about iTunes and that turned into complete crap, as people were willing to buy an iPod for a superior experience. People are willing to do the same with the iPhone for exactly that reason. And whether Android winds up being the dominant platform or not, it certainly won't ever be as profitable as the iPhone is (which, by the way, companies are been ripping off to no avail for two years now).



    Apple has never cared about market share, only about profits and for that reason, it doesn't matter who the market leader is as long as the profits are being raked in. Apple's hardware has only 10% market share, but steady profits. Microsoft, on the other hand, has 87% of the market and just laid off several thousands of people (and then tried to screw them out of cash) because its model is too dependent on market trends. That's exactly the reason Microsoft will always be a follower, not a leader.



    One way or another, without Apple, Microsoft wouldn't exist. Hell, just look at MS advertising, would they really have come up with "I'm a PC" without Apple having done it better first?
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