READY FOR REVIEW

*Introduction*

Apple's handheld software is largely proprietary rather than “open” and Apple actively blocks third-party efforts to implement innovative software on iOS devices. From the moment Apple released its handheld devices users were imprisoned. Apple restricted the devices such that any new software would come from or with the approval of Apple, and Apple alone. Not only were users unable to install third-party software, but also they were prohibited from using their devices on “unauthorized” networks, and performing certain functions or tasks. To free users, an underground community of software developers, “jailbreakers,” began investigating ways to “open” Apple's handheld devices. These jailbreakers sought to enable third-party’s to develop innovative programs and functions, make them available for installation by the average user, without Apple’s approval, and allow users to operate their phones on a carrier of their choosing.

Natalie Harrison, an Apple spokeswoman, stated, “Apple’s goal has always been to ensure that our customers have a great experience with their iPhone and we know that jailbreaking can severely degrade the experience.” This statement is unfounded. The jailbreak community, like Apple, has it in its best interest to insure reliability; people won’t jailbreak if doing so will crash their device, just as users won’t buy apps from the App Store if those apps will crash their device. Thus, it is unclear how jailbreaking, which could bring a plethora of valuable and innovative functions to iOS, will degrade the user experience. In waging war against jailbreakers, Apple subordinates its goal of offering truly innovative and efficient products to the goal of profit maximization, often to appease the major telecom companies. If Apple embraced the jailbreak community by removing the arbitrary restrictions it places at the behest of telecom companies, Apple would maximize innovation and efficiency, while still profiting substantially, likely without severe backlash from the telecom companies.

*Testing the Theory*

With the iPhone 4, Apple introduced FaceTime, a feature allowing users to video chat with other iPhone users. To this day, Apple restricts the great potential of FaceTime? , permitting its use only over Wi-Fi connections. Kim Streich, a third party programmer, quickly developed 3G Unrestrictor, an application enabling FaceTime? over 3G connections, allowing users to video chat on the go, instead of only in stationary, Wi-Fi-connected locations. This application is clearly useful and would greatly enhance the user experience, but Apple swiftly rejected 3G Unrestrictor from the App Store. The application quickly found its way into Cydia, an unauthorized app store, in the form of a paid app. Streich stated, “people are so annoyed by Apple and their shit, and if you give them the opportunity to go around it, then they’ll even pay for it.” Within just two weeks of its introduction into Cydia, the app garnered $19,000 in sales. This demonstrates that if Apple embraced the jailbreak community, thereby permitting apps like Unrestricted to be sold in the official App Store, Apple could profit. Creators are not deterred from using the App Store in favor of Cydia because of Apple’s fees. Cydia creator Jay Freeman, like Apple, charges 30% per app sale. Thus, creators are deterred simply because the App Store, as it currently operates, implements arbitrary restrictions which hinder achievement of optimal functionality. Without arbitrary restrictions on functionality, there would be no reason for unofficial app stores.

*Should Apple Care?*

Tim Cook, CEO of Apple, reported that over 250 Million iOS devices have been sold worldwide. In China, Apples second largest market (16% of sales), over 35% of iOS devices are jailbroken. If Apple removed arbitrary restrictions on functionality, formerly unauthorized applications could be available on the official App Store, for 100% of all iOS users to purchase. The 35% of Chinese users would convert to the official App Store for purchasing their applications, as there would be no need for any unofficial app stores. Further, many people purchase non-iOS devices specifically because Apple is a “closed system” with arbitrary restrictions. Removing arbitrary restrictions will induce people to convert to Apple and iOS, and as a result, Apple would sell more handheld devices and applications. Thus, Apple stands to profit substantially from embracing the jailbreak community. Moreover, the user experience will be greatly enhanced; innovation and efficiency will develop unfettered, thus achieving Apple’s stated goals.

*Possible Complications*

Some argue that removing restrictions that were implemented at the request of the major telecom companies could actually hinder Apple’s profit potential and could have an adverse affect on users; Telecom companies could simply charge more for mobile service. Given the current structure of the mobile device industry, however, this is an unlikely result. Sprint pledged $20 billion to Apple for the iPhone. As a result, AT&T and Verizon are now facing further potential competition; Sprint will do whatever it can to realize its investment in the iPhone. Given that Sprint subsidizes the cost of the devices, Sprint intends to make the most off of service charges. Thus, Sprint will do whatever it can to divert customers away from AT&T and Verizon to gain subscriptions to its service. Adding Sprint into the mix only decreases the likelihood that Apple and its users face backlash from the major telecoms.

Further, there is no reason to assume AT&T and Verizon will act collusively. For example, assume AT&T harms Apple users (i.e., increases service charges) as a result of Apple’s decision to “open” iOS. Verizon could then react positively to the change in an effort to gain disgruntled AT&T customers’ service subscriptions. Given the substantial market share iOS commands, the increase in customers to Verizon could offset any losses Verizon would incur as a result of an “open” iOS. Each telecom company stands to gain should one of the other telecom companies react unfavorably towards Apple and iOS users.

*Conclusion*

Thus, by removing arbitrary restrictions on functionality, and thereby obfuscating the need for an unauthorized app store, Apple stands to achieve its stated goal of improving the user experience, while substantially profiting, without severe backlash from the major telecom companies.

-- By AustinKlar - 26 Oct 2011

Here is a new article and data that iOS marketshare is very significant in today's market

http://9to5mac.com/2011/11/01/web-usage-ios-widens-its-lead-on-strong-iphone-4s-sales-android-finally-overtakes-java-me/

-- AustinKlar - 01 Nov 2011

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