Apple and the Peril of Success0
JR posted in Operating Systems, Web news, Devices on September 30th, 2008
I’ve (somewhat enviously) been following the success of Apple and their iPhone/iTouch success with the applications store. Lots of good programs there and many of the small makers are receiving remarkable amounts of money from their creations. This has been undeniably good for the software makers and the iPhone community. More importantly, Apple has provided a single, convenient and reliable source for acquiring software for their device.
There have been some drawbacks to this. First was that Apple was taking 30% of the price on any of the “for pay” applications. When the initial wave of applications hit and about half were free and almost all of the remainder was priced under $5, this wasn’t much of an issue. After all, how much was actually going to be involved with this App Store? It couldn’t really amount to much revenue when compared to the devices themselves.
Then we started hearing about the success of the iPhone 3G and with it the success of the Apps Store. Five millions iPhones quickly sold and just as quickly came the reports of 100 million applications downloaded. Whoa. That’s a lot of apps, even if half were free. And the party hasn’t stopped. Sales from the Apps Store appear to be continuing at that same pace as new iPhone buyers discover the universe of software they can download.
Watching this and comparing it to the rest of Apple now has me worried. Sure the obvious reason for concern is the widely reported instances in which Apple has denied applications for the Apps Store. There is also the developer concerns about the wide coverage of the very restrictive parts of the NDA. But that isn’t what worries me.
The real source of concern is the success that the Apps Store has had in providing the very convenient and controlled single place to get applications for Apple’s devices. This just feeds into the Apple tendency to want to tightly control and optimize the experience for the user. They want to make everything so smooth and easy for us; while taking a reasonable profit for themselves.
Apple fans are long aware that one of the problems with being an Apple user is that it is more difficult to find software for their preferred platform. Sure, they are comfortable with downloading and installing applications from the makers, but it isn’t easy to find software when most retail outlets only carry a tiny amount of Mac software, if any.
Now we start seeing the way that the Apps Store might change this. What if there was an Apps Store that Apple managed for Mac software? Just like with the iPhone, it could easily tap into your iTunes account for billing information. Apple could control the offered software and insure that there was not hostile malware that was offered. Wider exposure to the Mac community would be good for many software publishers and they wouldn’t have to fight with the software distributors for shelf space in retail stores.
But this leads even further to the ghettoization of the Mac just when it is starting to grow in popularity. Just as more people are buying Macs and there is a growing demand for Mac software that the retail stores will want to serve, Apple could be taking in all the applications to the App Store, leaving no reason for retail distribution. And Apple would modestly take a slice of the sale price (albeit less than the normal distribution chain would). (Incidentally, getting a slice of the revenue that independent developers create has to be something that would make Microsoft salivate enviously.)
So a Mac Apps Store is unlikely at this point. What will happen next?
Just recently, Apple instructed retailers to remove AppleTV displays and get ready for something new starting today (September 30). AppleTV was a nice front end to the iTunes store and brought the elegant Apple experience to the HDTV, but it never really caught on with the public. Popular with the hacking community, many people have expanded AppleTV’s capabilities greatly from the original product.
What if Apple brought the App Store to AppleTV? Because the platform hasn’t been successful to date, it is a good test area for whether adding the Apps Store will expand its market. If successful there, the Apps Store concept could be expanded to the Mac itself.
Let’s see what happens.