The Dangers of Power

At the beginning of the week Apple banned sexually explicit content from its App Store. This move got a lot of attention from the press and blogs and put Apple on its heels to justify its moves. For those who aren't familiar with what happened, Apple, without notification, removed about 5,000 applications from its store because they contained sexually explicit content. Apparently Apple was responding to numerous complaints from customers about the inappropriate content. As we all know, selling applications has become a big business, so the removal of applications has serious repercussions for the developers who make money of the apps they created. Businesses also loose any customers their app might have generated, like the company who sells swimsuits whose app was removed during the purge. Playboy share holders shouldn't worry about this post because the Playboy app was not removed from the store. Apple decided that Playboy was ok, but a swimsuit company was not because Playboy is an "established brand."

I believe this episode, which may be resolved by the creation of an explicit app category, reveals the hole in Apple's armour. The company has been incredibly successful selling devices because of the content that is available for those devices. How popular would the iPod have been without iTunes? What about the iPhone and iPod Touch? I haven't seen sales figures, but I'm willing to guess there was a large increase in sales when Apple allowed third party apps onto the devices. The app store shifted the balance of power towards Apple in a dangerous way by making it the content gatekeeper. Pre-App store Apple would sell whatever the major labels would let it and supply wasn't really an issue. The App store was the first time Apple had to screen content, and put the company into the position of gatekeeper.

By removing apps without explanation or notification Apple sent a message to developers that their rights were secondary to the ideology of the company. Not removing Playboy also sent the message that Apple looks out for the big guy more than the little guy. If you were an App developer do you want to spend the next few months coming up with an app for iPhone, or would you prefer to invest your resources into an open platform like Google's Android? In the long run, my money is on Android. If there is no gaurantee from Apple that your app will be 1. accepted to the store or 2. remain in the store long enough to turn a profit, why would you invest your time and energy? Most of the developers are not large "established brands" either. They are small one and two man shops taking a risk that their time investment will pay off.

The danger of the power that Apple now holds as gatekeeper is that its small actions like the one this week, will lead the very people that keep it alive to leave. Apple does not have a monopoly on the computer, music, movie, or app business and it must remember that. No matter how nice their products are, they are nothing without content to put on them. Content is king. Loose the content, and you loose the power, and the profits.