iPhone Profits, Mac OS X Terms Could Squeeze Apple Developers

 
 
By Nicholas Kolakowski  |  Posted 2011-11-05 Email Print this article Print
 
 
 
 
 
 
 

Apple's iPhone profits and unit sales means a broader audience for Apple products, which means more business for developers. But Apple is also a gatekeeper.

Apple is earning more than half of the handset industry operating profits, according to a new research note. The company's iPhone 4S looks to follow on the heels of its predecessors as a mega-selling device. But is that necessarily good for app developers?

"Due to softer iPhone sales during the September quarter ahead of the iPhone 4S launch, Apple relinquished the [number-one] smartphone market share to Samsung during [third quarter 2011]," T. Michael Walkley, an analyst with Canaccord Genuity, wrote in a co-authored research note Nov. 3. "However, Apple generated a remarkable 52 percent share of estimated [third-quarter] handset industry operating profits among the top 8 OEMs with only 4.2 percent global handset unit market share."

Furthermore, he wrote, the iPhone 4S was October's bestselling smartphone model at AT&T, Sprint and Verizon. "As such, as believe Apple's [first quarter of fiscal 2012] will mark a record quarter for iPhone sales, and we are modeling unit sales to increase roughly 70 percent sequentially to 29 [million units]."

In theory, that's a great bit of news for third-party Apple developers: most iPhone units sold means more interest in Apple products as a whole, and a "halo effect" that extends to sales of the company's other products. That creates a larger potential audience not only for iOS apps, but also Mac OS X apps. And that means more revenue and profits for everyone, right? Perhaps.

However, a set of new Apple policies hints that, if those developers want to run around in any part of Apple's playground, they'll need to conform to a more stringent set of controls.

According to Roger Kay, principal analyst at Endpoint Technologies Associates, Apple is planning on sandboxing any apps submitted to the Mac App Store by March 1, 2012. "Essentially, sandboxing allows Apple to decide which apps get access to which resources, and such access can be severely constrained," he wrote in a Nov. 4 posting on his Forbes blog. "It means that Mac OS X is going to be locked down just like iOS." 

He sees this as restrictive for both software developers and distributors: "The Wild West days of software development are fast coming to an end. Since Microsoft is following the same path with Windows 8, we are witnessing quite literally the end of software distribution freedom." With an approval process locked in place for consumer software, the whims of a particular company will ultimately dictate whether a developer's product can reach an audience.

The more popular a platform or company, in other words, the higher the potential for profit for third-party developers who rely on that company to help distribute their products to a growing audience. But when the company dictates the terms of that distribution, it can also put those developers at risk. A double-edged sword indeed. 

Follow Nicholas Kolakowski on Twitter 

 
 
 
 
 
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.
 
 
 
 
 
 
 

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