How to Fix the App Store - BusinessWeek
During the last few months, there has been a lot of noise about "opening up" iPhone to other carriers and Apple being forced to permit Apps that go against its "policy". I can understand public pressure from customers that might force Apple to make these changes, but what role do regulators, analysts and columnists have in "forcing" Apple to change its commercial practices?
My simple argument is that Apple has no obligation, except to its customers and shareholders, to change its strategy with respect to the iPhone. The FCC or any other regulators have a role to play if market dynamics are getting distorted or becoming uncompetitive due to Apple's practices. Let's look at the exclusive deal between Apple and AT&T for instance.
Apple's share in the entire mobile phone market is negligible, it cannot distort the market. Even if one were to limit the market to "smartphones", Apple still has low double digit market share and is not the market leader. Further, this is not the first or only "exclusive" device deal with an operator... most US operators (unlike, say in India) bundle devices with the service and many such deals are exclusive. The Pre is available only with Sprint: why isn't that a big issue then? Of course, I can understand if iPhone customers (or likely customers) don't want to be on the AT&T network (as is indeed turning out to be the case now) and put pressure on on Apple to open up other networks. But what are Apple's options: the other major network in the US is Verizon which is on CDMA and so is Sprint. T-Mobile is the only sizable GSM operator and is a distant 4th... I am not sure iPhone users are looking at T-Mobile as a credible alternative.
Now take the Google Voice situation. I am sure a lot of customers want to use Google Voice and perhaps, a lot of iPhone customers want GV. Apple needs to consider their opinion, else those customers have other choices. They can move to phones that are on the Google Android platform which obviously supports GV, or any other smartphones that choose to support GV. Note: the customer has choices. Then why should any regulator seek to intervene and possibly seek to enforce that a particular App be made available on the device / service. I can understand it if it were a regulated service that is required to be offered, for instance 911 calling. But here we are talking about an Internet Telephony service which by its nature thrives on "free market" forces. Google cannot try and force its way onto every device. If that were to happen, then everyone would need to enable everyone else... I would love that world, but that is not a practical situation.
Regulators and analysts need to go after dominant players and platforms... that's where customer choice is limited and there is need for intervention. Apple is a relatively small player in most of its markets (PC, OS, Smartphone, etc. except MP3 Music Players and Online Music Stores); however it dominates public perception -- that's perhaps the reason everyone wants to regulate Apple like a dominant player.
Disclaimer: I personally disagree with the strategy of exclusive tie-ins between service providers and device manufacturers; I wish Apple would break its exclusive iPhone deals with a few operators. I am also indifferent to Google Voice because it is not available in India (and may never be, considering policymakers have sought to kill Internet Telephony in India). I wish Google Voice were available on the iPhone. But I wish these things would happen because Apple cares about customer needs, not because of some regulatory intervention!
