by Kevin Miller

Software industry is being damaged by Apple

Jun 02, 2010
Mobile Small and Medium Business

Apple’s recent decisionto amend the terms of its software development licensing agreement for the iPhone and related platforms caught many by surprise. The move prevents developers from using a raft of software programming tools.  On the surface, the change appears to be aimed primarily at Adobe yet the furore that it has created serves to mask another aspect that has been largely overlooked.  That is Apple’s imperative move into the mobile advertising arena. The irony is that Apple’s decision may inadvertently deliver a boost to rival Google and its Android platform by alienating the very people that have been such loyal supporters – the developer community.

As one of a number of software companies affected by the move, one might assume that we have an axe to grind. Far from it. We enjoy a good relationship with Apple, based partly on the fact that one of the original investors in Apple is one of our main backers. This gives us an extraordinary insight into some of the thinking and rationale and is the reason why I believe that Apple’s decision is a smokescreen.  What is clear is that the business of application development and the application development business are becoming two very different things. The former is centred around the software tools whilst the latter is increasingly focused on identifying future revenue-generation.

Apple’s acquisition of Quattro for $275 million earlier this year is testament to a strategy designed to take-on Google in the mobile advertising space.  Apple’s recent decision is, in my opinion, a further extension of this strategy. Steve Jobs believes that locking down the platform will ensure Apple can keep moving their iAds service in exactly the right direction without having another platform vendor stand in the way. The fear is that should a third party platform fail to support new innovations on the ad platform, it could cost Apple serious revenue by slowing down their ability to remain competitive in this space.

By contrast, Google’s ‘open’ approach to Android seeds innovation amongst devices and developers alike and helps drive new business. We’re starting to see that already amongst our own user community. By effectively limiting what appears on the Apps Store platform, Apple is shutting out a wider group of enthusiasts and professional developers from designing new applications for the iPhone. Apple claims the issue is about ‘openness’ reliability, security and performance yet Apple’s response to our submission suggests it is fundamentally about control and growth.

Our offer to create an iPhone-only product was rejected by Apple. What struck me throughout our discussions was how much Apple’s decision is anchored in the trauma of events in the 1980s. Microsoft was the main competition then and it stole a march on Apple.  Google is the main competition today and the stakes are much higher.  Having launched the iPod, iPhone & iPad, Apple needs to create new revenue streams that are not wholly dependent on hardware sales of new classes of device. iAds has the potential to deliver just that, but at what price?

Polling amongst our own user community shows that they do not want to be dictated to as to what development tools they should use. Many have indicated that they plan to switch platforms and develop applications for Google’s Android platform. These Apple devotees have spent vast sums of money creating applications, only to discover that Apple will not allow them to deploy them on the iPhone or related platforms.  The anger that this has generated is truly surprising, given these individuals’ traditionally loyal support of Apple.

In choosing these tactics to pursue its mobile advertising strategy, Apple has unintentionally cast aside a group of loyal and very vocal supporters. What has started as a growing clamour of voices could soon turn into a crescendo that becomes a crisis.   The Chinese use two brush strokes to write the word crisis. One brush stroke stands for danger; the other for opportunity. Whilst we understand the reasons behind Apple’s decision, we cannot ignore the opportunity that presents itself. That opportunity is Google’s Android platform and Apple may have given its rival a new set of fans with a point to prove.

About the Author

Kevin Miller is founder and CEO of RunRev, an Edinburgh-based software company. The company was founded in 1997 with the goal of empowering rapid creation of applications for enterprise, commercial, creative and academic environments.

Using an intuitive and robust programming language, Revolution is a modern descendent of natural-language technologies such as Apple’s HyperCard, and enables software creation for everyone – from entrepreneurs to researchers, educators to enterprise software developers.