Renegade iPhone App Stores No Threat To Apple

Before Apple (AAPL) opened the iPhone to third-party software developers last year, some bleeding-edge iPhone owners installed “jailbreak” software on their phones to install widgets, customise the way their phone looks, etc. When Apple launched the iPhone App Store, jailbreaking your phone lost most of its utility, even for early adopter-types.

Yet today’s WSJ insists that new, renegade app stores are “a growing threat” to Apple’s iPhone business. For example, a service called Cydia Store, launching today, which “could potentially sell hundreds of iPhone applications that are not available through Apple’s official store.” This potentially includes porn apps, camcorder apps, etc.

Jailbreak app stores are no threat to Apple. Why not?

  • They don’t cause Apple to sell fewer iPhones, which is the point of Apple’s mobile phone business.
  • They are useless to the vast majority of iPhone users, especially as Apple’s iPhone customers become even more mainstream — and less techie. (Most normal people do not want to tinker with their phone — they want their phone to work. And most apps that normal people want can be obtained from the real App Store.)
  • Apple’s App Store revenue, while nice, is icing on the cake. It’s a break-even business or a tiny profit at best.
  • The kinds of apps Apple wants to sell on the official App Store — high-end games, real software from real companies — will not show up in jailbreak stores.
  • Apple can easily disable jailbreak apps with a software update. Sure, the jailbreak folks can enable them again. But this hassle will get old for all but the most committed.
  • There’s plenty of porn on the Web, which any iPhone can access.

Will some people continue to jailbreak their phones and run renegade apps? Sure.

Might some people end up making money from this? Sure.

Is Apple losing anything? Or is this a “grwing threat to its iPhone business,” as the Journal says? Absolutely not.

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