Apple’s “Closed” App Store Actually Hurts Profit Potential of iPhone

The word on the web the last day or so is that Apple has only made somewhere between $20-$50 million from the sale of iPhone Apps.  While not chump change, it doesn’t make a big impression on Apple’s overall revenue.

As SAI says:

Apple has said publicly that its plan is to run the App Store near breakeven. The main idea is to make money by selling iPhones and iPods, which Apple is doing nicely.

If the point of Apps is to boost the sale of iPhone, why would Apple be so against opening up the App Store to all application? Why not step away from the constantly problematic position of moral/ethic/technical boarder guard and let Apps for the iPhone be an open marketplace?

The coolest Apps out there are often only currently available to the few out there willing to jailbreak their iPhones, voiding their warantee and risking having their iPhones bricked with Apple’s latest update.

Many of the Apps that Apple have rejected (video recording, cut and paste, etc.) are exactly the ones that would encourage more people to buy an iPhone and that’s where Apple claims all their profit lies.

It’s also downright creepy and weird for Apple, a hardware/software company, suddenly trying to decide what is “appropriate” content.  Since the iPhone comes with a web browser capable of opening the pages of porn sites, it seems completely absurd to tell adults they can’t have certain software because it violates some vague concept of morality in the eyes of Apple.

Not only that, but because of Apple’s crazy position as gatekeeper there is a constant stream of bad press on which App was or wasn’t accepted by Apple.  What does Apple get for all this negative press?  If they just opened up the system they would have a simple defense: Hey, it’s not our job to tell people what they can and can’t do with their iPhones once they buy them.

Video on the iPhone – Sweet Solution Proposal

Sure, it will be a nice day when the iPhone finally incorporates Flash (not to mention cut&paste) but that doesn’t really get me excited.

However, Mashable has an insider look at an app being developed by the gang at Revision3 that is just what the doctor ordered.

How totally cool and smart.  All their programming in one place, constantly updated and allowing me, the viewer, the follow the shows I like and discover new ones.

Is this sort of what we will get with the addition of podcast downloads? A bit, but this is so much more dynamic and allows the content distributor to control their own environment.

What is holding back these sorts of apps, Apple?!