OPINION
Apple's Store, Apple's Rules, Apple's Peril

Surely it's just another self-important quest; another case of MacMacs tilting at windmills.

Except this time they just may be right.

Their Store, Their Rules

For those wasting their time with such trivial pursuits as the U.S. Presidential elections or natural disasters and thus ignoring the real burning issues like the soap-opera-on-the-Web that is iPhone development, here's the story in a nutshell. After flexing its muscle by rejecting iPhone apps such as "I Am Rich" and "NetShare," Apple (Nasdaq: AAPL) informed an iApp developer that its offering, "Podcaster," was being denied entrance to the iApp store because it, according to the developer, "duplicates the functionality of the Podcast section" of Apple's own iTunes application.

Before we get around to deciding how to react to this news, let's break a few things down:

• Does Apple have the legal right to reject an application from being included for distributed on its own store? Read that question a few times and it practically answers itself. Even better, flip it around: Must Apple accept every application for distribution from its own store? Answer: Of course not. In fact, the Software Development Kit Agreement that every iPhone developer agrees to accept contains a very broad clause stating, "Apple reserves the right to approve or withhold approval and signing of any Application at its sole discretion." That's pretty unambiguous.
• But it's unfair; it's censorship. It's ... monopolistic! Um, no, it's not. There are lots of podcasting clients. There are other, more popular phone platforms. iPhones may be selling very well, but Apple still controls a platform with a very tiny market share.
• OK, Apple can do it. But it's immoral! Really. Keeping an alternative podcasting client out of the hands of iPhone owners is immoral. Are you sure you want to go with that? Besides, since when are businesses bound to make only "morally sound" decisions? And are you going to be the guy who gets to decide what is and is not moral and "fair?"
• Well, it's ... it's ... stupid. Ah, now we're getting somewhere. Elaborate, please.
• If Apple can just reject someone's app -- at the last minute, even if it doesn't violate the developer guidelines -- then why would anyone in their right mind want to invest time and money to develop them? Bingo.

Bruised Credibility

As its developers point out on their blog, Apple has already approved other iPhone applications that duplicate functionality: think calculators, for one thing. There appears to be nothing in Apple's developer guidelines that prohibits such duplication, either.

While we may agree or disagree with previous decisions on what gets to stay in the iApps store, up until now, there always seemed to be a defensible reason for removing them. This time, the reason seems to be simply "because it competes with us and we don't like that." That could have (and already appears to have had) a chilling effect on developer enthusiasm for the new platform. Jon Gruber's Daring Fireball gathers some developer reaction to the move. To a person, the developers Gruber cites see the potential for serious application development to stagnate. The result could be a "museum of poorly-designed nibware written by dilettante Mac OS X/iPhone OS switcher-developers and hobbyist students," writes Fraser Speirs, developer of the Flickr client Exposure.

In the not-too-distant past, a group of companies tried to exert similar control over how their product was distributed. "You'll buy it the way we want you to or not at all" was the general attitude. It didn't work. People found all sorts of ways to circumvent those restrictions, and when the record companies wouldn't provide a way for them to pay for what they wanted, they found ways to take it anyway -- without paying. If Apple is the new RIAA (Recording Industry Association of America), could a revived interest in "jailbreaking" create the new Napster? Already, the makers of Podcaster are working around Apple's rejection, selling their product directly using the method available for corporations to distribute apps internally.

It's possible that Podcaster's rejection was the result of lower-level ineptitude or a gap in company communication rather than a deliberate policy handed down from senior management. It's possible that by the time you read this, Podcaster will be available from the iApp store and Apple with clarify what is and is not acceptable in an application it sells. But regardless of what happens next, the credibility of the iApp store has been hurt, and many serious developers are likely to rethink their plans to invest the time and resources it takes to bring iPhone apps to completion -- I'd say "to market," but it looks like that decision still remains solely in the hands of Apple. That's a situation in which everyone -- developers, Apple and users -- all come out losers.