[p2p-research] opening up the iphone

Sat Mar 14 20:47:20 CET 2009

Hi Michel,

Here are some notes that I hope to get some help in turning into a
full blog post (due to severe time constraints over here)

~~

The following are some notes in response to the WSJ article regarding
the emergence of hacker-founded startups that aim to profit from the
sale of "jailbroken" games and applications (that may otherwise not be
approved by Apple for sale on the iTunes AppStore for whatever reason,
e.g. adult content or applications that undermine Apple's closed
business model) and liberate the market for iPhone games and
applications.

Notes:

. Customers who "jailbreak" their iPhones (i.e. allow it to run
unofficial software) are not likely to pay for games and applications
at the iTunes AppStore or at any other store because the hacker
culture, which underlies the jailbreaking trend, is predicated on the
idea that software should be free. Therefore, the "paid" jailbroken
market is expected to remain a very limited niche market (e.g. limited
to porn and applications that compete with Apple's existing or planned
applications and services, which, thus far, have been much better
executed than those of the competition) and is therefore highly
unlikely to put a dent in Apple's iTunes AppStore revenue.

. Apple may benefit from having a small gray market for the relatively
small percentage of customers who do not normally pay for apps/games
at the iTunes store AND are willing to take the risk of a voided
warranty (and potential damage to the jailbroken device caused
deliberately by future Apple firmware updates) since the existence of
such a market would keep such customers from switching to Android or
other open mobile platforms.

. Apple will be announcing a Premium AppStore for the iPhone and iPod
Touch that will feature sophisticated games and applications (to run
on the next generation iPhone hardware) that will cost as much as $20
per download. A "paid" jailbroken market where games and applications
sell for $20 is not realistic because, once again, the primary reason
people jailbreak their phones is to run free games and applications.

Having said that, it's very possible for certain developers (and
consequently the jailbroken market operators who sell those
developers' software) to make substantial profit from adult titles or
applications in the non-Premium price range of $0.99-$1.99 that offer
great missing utility which Apple may wish to have as part of the
iPhone OS but has not yet thought about.

So far so good. Apple, the developers, and the market all benefit.

The serious issue for Apple comes about when a developer decides to
patent a certain critical utilitarian feature that is missing from the
iPhone OS and that Apple has not thought about (and has not patented)
and offer it for sale through an independent store. In such a case,
Apple will not be able to shutdown that developer's revenue or take
away their leverage which gives that developer the ability to battle
Apple in court and force them paying license fee for use of the
developer's patent. In other words, the emergence of hacker-founded
jailbroken markets is empowering to the developer, and while Apple may
benefit from such 3rd party markets they will ultimately force it to
open up it's business model.

However, such change won't come overnight; and it may take up to a
decade before Apple realizes that it has to strike a better balance
between sustaining the current production parameters and embracing
openness since closed production systems are destined to die, no
matter how well they're put together.

But that's not to say that open production systems survive longer just
because they're open; since they must also have a balance between
sustaining competitive production parameters and openness.

In other words, the notion of a purely open or purely closed
production system is reflective of flawed thinking that can only
results in the demise of the given production system.

Marc
p.s. I'll blog this when it's done on Evolving Trends, too.

On 3/14/09, Michel Bauwens <michelsub2004 at gmail.com> wrote:
> Hi Marc,
>
> Monday is fine, no problem!
>
> On Fri, Mar 13, 2009 at 12:59 AM, marc fawzi <marc.fawzi at gmail.com> wrote:
>
>> I had commented on this publicly on Venture Beat and elsewhere when the
>> developer program was announced back about a year ago.
>>
>> More recently, I've been thinking a lot about how Apple does business and
>> why their products are phenomenally better than those of the competition,
>> even when the competition is Google. In other words, I have looked at
>> both
>> the pros and cons of being a closed system vendor.
>>
>> The only problem for me now is I'm off the grid and internet access is
>> sporadic, and so is my bandwidth.
>>
>> I can write a post and send it to you by email before Monday. Let me know
>> if that works for you timing wise.
>>
>> Unrelated: I did send photos of the ranch here and the solar stuff with
>> learning notes etc but it was too large so it's awaiting moderation
>>
>> Marc
>>
>> On Thu, Mar 12, 2009 at 2:27 AM, Michel Bauwens
>> <michelsub2004 at gmail.com>wrote:
>>
>>>  http://online.wsj.com/article/SB123629876097346481.html
>>>
>>> Dear friends,
>>>
>>> this is a story that I would like to see covered on our blog, any
>>> takers?
>>>
>>> Michel
>>>
>>> --
>>> Working at http://en.wikipedia.org/wiki/Dhurakij_Pundit_University -
>>> http://www.dpu.ac.th/dpuic/info/Research.html -
>>> http://www.asianforesightinstitute.org/index.php/eng/The-AFI
>>>
>>> Volunteering at the P2P Foundation:
>>> http://p2pfoundation.net  - http://blog.p2pfoundation.net -
>>> http://p2pfoundation.ning.com
>>>
>>> Monitor updates at http://del.icio.us/mbauwens
>>>
>>> The work of the P2P Foundation is supported by SHIFTN,
>>> http://www.shiftn.com/
>>>
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>>>
>>
>
>
> --
> Working at http://en.wikipedia.org/wiki/Dhurakij_Pundit_University -
> http://www.dpu.ac.th/dpuic/info/Research.html -
> http://www.asianforesightinstitute.org/index.php/eng/The-AFI
>
> Volunteering at the P2P Foundation:
> http://p2pfoundation.net  - http://blog.p2pfoundation.net -
> http://p2pfoundation.ning.com
>
> Monitor updates at http://del.icio.us/mbauwens
>
> The work of the P2P Foundation is supported by SHIFTN,
> http://www.shiftn.com/
>