Thus, by removing arbitrary restrictions on functionality, and thereby obfuscating the need for an unauthorized app store, Apple stands to achieve its stated goal of improving the user experience, while substantially profiting, without severe backlash from the major telecom companies.

UPDATED DRAFT:

Apple built itself as a proprietary, rather than “open”, company, and actively seeks to quell efforts by third parties to promote innovative but “unauthorized” software on iOS devices. From the moment Apple released its handheld devices users were imprisoned. Apple restricted the devices such that any new software would come from, or with the approval of, Apple and Apple alone. Not only were users unable to install third-party software, but also they were prohibited from using their devices on “unauthorized” networks, and performing certain functions or tasks. To free users from this industry-created jail, an underground community of software developers, “jailbreakers,” began investigating ways to access the system disk on Apple devices and open it. These jailbreakers sought to enable third-party developers to create programs and functions, make them available for installation by the average user, without Apple’s approval, and allow users to operate their phones on a carrier of their choosing.

Apple makes blatantly false statements about how jailbreaking will impact a user’s “experience” with the device. Natalie Harrison, an Apple spokeswoman, stated, “Apple’s goal has always been to ensure that our customers have a great experience with their iPhone and we know that jailbreaking can severely degrade the experience.” [SOURCE] This statement is unfounded. The jailbreak community, like Apple, has it in its best interest to insure reliability; people won’t jailbreak if it is going to crash their device, just like users won’t buy apps from the App Store if it will crash their device. In waging war against the jailbreakers, Apple subordinates its stated goal of offering truly innovative and efficient products to the goal of profit maximization, often to appease the major telecom companies. If Apple embraced the jailbreak community by removing the arbitrary restrictions it places at the behest of telecom companies, Apple would still profit substantially and maximize innovation and efficiency, likely without severe backlash from the telecom companies.

With the iPhone 4, Apple introduced FaceTime? , a feature allowing users to video chat with other iPhone users. To this day, Apple restricts the great potential of FaceTime? , permitting its use only over Wi-Fi connections, likely at the request of the major telecom companies. Kim Streich, a third party programmer, quickly developed Unrestricted, an application enabling FaceTime? over 3G connections, allowing users to video chat on the go instead of only in stationary locations, such as home or school. This feature is clearly useful and would greatly enhance the user experience, but Apple swiftly rejected Unrestricted from the App Store. Unrestricted quickly found its way into Cydia, an unauthorized app store, in the form of a paid app. Streich stated, “people are so annoyed by Apple and their shit, and if you give them the opportunity to go around it, then they’ll even pay for it.” [SOURCE] Within just two weeks of its introduction into Cydia, the app garnered $19,000 in sales. This demonstrates that if Apple embraced the jailbreak community, thereby permitting apps like Unrestricted to be sold in the official App Store, Apple would profit. Creators are not deterred from using the App Store in favor of Cydia because of Apple’s fees. Cydia creator Jay Freeman, like Apple, charges 30% per app sale. Creators are deterred simply because the App Store, as it currently operates, implements arbitrary restrictions which hinder functionality. Without arbitrary restrictions on functionality, there would be no reason for unofficial app stores.

Most users do not jailbreak their phones, so what incentive does Apple have to stir the pot with telecom companies in favor of jailbreakers? Tim Cook, CEO of Apple, reported that as of October 2011, China is Apple’s second largest market, accounting for roughly 16% of sales. [SOURCE] Further, roughly 35% of iOS devices in China are jailbroken. [SOURCE] If Apple removed arbitrary restrictions on functionality, these applications would be available on the official App Store, for 100% of all iOS users to purchase, and these 35% of users would convert to the official App Store for purchasing their applications. Further, many people purchase non-iOS devices specifically because Apple is a closed system with arbitrary restrictions. Removing the restrictions will induce more people to convert to iOS. Thus, Apple stands to profit substantially from embracing the jailbreak community. Not only will Apple profit, but also the user experience will be greatly enhanced, thus achieving Apple’s stated goal; new, innovative features such as free tethering, Adobe Flash, and text messaging enhancements will be offered, through the user-trusted App Store, to all.

Some argue that removing restrictions which were implemented at the request of the major telecom companies could actually hinder Apple’s profit potential and could have an adverse affect on user’s in that telecom companies could simply charge more for mobile service. Given the current structure of the mobile device industry, however, this is an unlikely result. A year ago, if Apple were to remove the restrictions implemented by AT&T and Verizon, surely data charges would increase. However, given that Sprint has pledged $20 billion to Apple for the iPhones, AT&T and Verizon are now facing potential competition; Sprint will do whatever it can to realize its investment in the iPhone. Given that it subsidizes the cost of the devices, Sprint intends to make the most off of service charges. Thus, Sprint will do whatever it can to convert customers away from AT&T and Verizon. The release of the iPhone 4S was Sprints best sales day ever. Thus, Sprint could potentially make a comeback in the industry and pose a substantial threat to AT&T and Verizon, reducing the risk of AT&T and Verizon increasing services rates. Given that iOS commands a substantial market share, telecom companies want Apple to remain in business and will not act in ways that negatively impact Apple users.

Thus, by removing arbitrary restrictions on functionality, and thereby obfuscating the need for an unauthorized app store, Apple stands to achieve its stated goal of improving the user experience and stands to substantially profit without severe backlash from the major telecom companies.

-- AustinKlar - 21 Oct 2011

I think if APple opened up these possibilities for users, yea, it would make the telecoms unhappy....but to so what. In 2011 alone, Apple's market share for phones grew 115% according to a news report issued by market research firm IDC. According to the Nielson Company in March 2011 Apple had 25% of the smartphone market. With Apple selling LITERALLY over 1,000 iPhone 4s a minute (having sold over 4 million in a week), that share is ONLY going to grow.

Think about how much money these telecom companies make off charging 60-110 a month for iphone plans. Are you suggesting that if APple allowed these features, carriers would drop Apple products? I think that this is especially less likely a possibility given that now Sprint is in the iPhone game. The release of the 4s was Sprints BEST sales day EVER and the company has bet $20 billion on the iphone. I don't think Sprint would let this go to waste simply because APple opened up those features.

There will always be a carrier to provide the phone. I switched to ATT because they had the iphone first. Id switch to Sprint for the iPhone if they were the only one left, and i think many would (but also many wouldnt). The point is, Verizon and ATT make so much money off the iPhone that they wouldnt drop Apple altogether and they are restricted from raising prices because Sprint is there to combat them if they need to be combatted. There is more competition now than in previous years amongst carriers regarding the iPhone.

Many people don't buy iPhones because they are "closed" and prefer android for that purpose. theoretically, if Apple opened up those features, more people would buy their phones, or less people might jailbreak which means these phone companies could also benefit. Apple makes most of its money a ton of money off of the handset itself. More people buying the handset means more money for Apple. Since the carriers won't go anywhere, no users are harmed. The carriers wont like increase prices because there is more competition

-- AustinKlar - 20 Oct 2011

Apple surely makes a lot of money off of the 30% they charge developers for App store cuts. But, jailbreakers don't pay ANY money so Apple could potentially gain from those people who are persuaded to no longer jailbreak for these specific features like tethering and 3G video. Further, selling more phones to people who formerly refused to buy iPhones because they are too "closed" or "proprietary" would help also offset losses Apple takes from becoming completely open sourced. Developers are still free to charge for Apps and will be able to draw in a market for those paid Apps so long as those Apps funciton better than their counterparts. It will be a constant battle between developers of Apps and jailbreakers to make better Apps. That benefits the user and makes them more willing to be a part of that system and this leads to more money for apple because the users need apple handsets to do these functions. They need the phones

-- AustinKlar - 20 Oct 2011

-- CrystalMao - 20 Oct 2011