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June 1 doesn't just herald the start of the Atlantic hurricane season. The winds of gossip and speculation regarding Apple (Nasdaq: AAPL) are already swirling in anticipation of next week's Worldwide Developers Conference, and the latest squall line focuses on those beta-testing the new iPhone 3.0 operating system.
Several blogs and tech Web sites are reporting no more free lunches of iPhone apps already paid for -- at least not unless you physically plug the phone back into your computer. When trying to load a previously purchased app, testers of the new OS report this dialogue box pop-up: "You've already purchased this. You can redownload it for free on your computer or tap Buy to buy it again."
Currently, redownloads of purchased iPhone apps are allowed for free over the air. Users can replace a lost phone, get a new phone or run a system restore, then sign onto their iTunes account and go about downloading the lost apps on an as-needed basis anywhere they get a data signal. With the upcoming operating system, though, it appears users who need to reload their app portfolio will have to do so at a laptop or desktop rather than on the fly -- unless they want to pay up again.
Why would Apple kill this convenient feature? It might have to do with a loophole in the over-the-air application purchasing process, as outlined by the tech blog Gizmodo: Currently, User A can log User B's iPhone onto User A's account and start downloading, thereby allowing User B to get free apps. With the update, everybody will have to sync their phones to their iTunes-loaded computers to replace lost apps.
Consumer, Developer Reactions
Apple's media relations team did not respond to a request for comment by press time, and getting analysts to comment on rumors and speculation can be as difficult as getting your iPhone app chosen for an Apple commercial. However, 451 Group research director Chris Hazelton isn't seeing any major new threats to consumer wallets in the reports. It may be an issue of app developers not updating their offerings yet for the 3.0 OS beta version, he said.
"Will there be apps out there that aren't updated? Yes," Hazelton told MacNewsWorld. "It's mostly the free applications. But anybody who's earning an income off their app is going to be more than willling to update their apps. They've had a long-enough lead time to know."
If Apple is indeed changing up its redownloading iPhone app policy, Yankee Group senior analyst Josh Martin doesn't think it will cost the company a lot of customers. "Realistically, they (Apple) are the 800-pound gorilla, and there's still a lot of money to be made on that platform, so I don't necessarily see a lot of movement away from that, or a big cause of concerns."
Consumers naturally wouldn't want to buy an app over-the-air twice, but "I would say that based upon some of our data of new applications usage and re-usage, it may become likely that [consumers] may never have used that app a whole lot," so they wouldn't necessarily miss it, Martin told MacNewsWorld.
New iPhone Download Rules?
Central to the discussion are the classic questions of what's a new feature and what's a software bug, according to IDC analyst Al Hilwa. "You never know in a beta," Hilwa told MacNewsWorld. "That's why it's called a 'beta.' There's no way of knowing how things will finally work. I would expect Apple to resolve this."
One way to do that would be for Apple to be more forthcoming with its App Store strategy, especially with competitors like Android and Palm on the horizon. However, a change that discontinues free over-the-air redownloads, Hilwa said, may indeed be tied to speculation that Apple will boost its iPhone multimedia offerings -- in the form of more movies and TV shows -- at WWDC next week.
"Vendors of content are very concerned that once a person buys something, they have it for life -- no matter what device they have that'll have access to that," Hilwa noted. "They're struggling with that; how do you price that, how do you make money and how do you make sure everybody has rights?"
