iPhone Unauthorized App Downloads emerge

Apple may have some competition when it comes to selling applications for its popular iPhone, as several developers are launching their own stores selling unauthorized applications for the device.

(Credit: Apple)The Wall Street Journal reported Friday that at least one developer is planning to launch a new service called Cydia Store today that could sell hundreds of iPhone applications. These apps aren’t available through Apple’s official store, and they require already “jailbroken” iPhones. These are iPhones that have downloaded software that modifies the phone so it can run any application.

The article also mentioned another developer, Rock Your Phone, which also plans to sell unauthorized iPhone apps. But this new store doesn’t require iPhones to be modified, the article says.

Some of the applications that can be found in the non-Apple App stores are ones that Apple won’t carry in its own store. For example, there is an application for turning the phone into a modem for laptops and one that turns the iPhone into a camcorder. Other applications might include adult games, which are not sold on Apple’s App.

Apple launched its App Store back in July and it has become wildly popular. Apple said in January that there were a total of 15,000 applications available through the App Store, and the list is growing daily. Downloads from users had hit more than 500 million in just more than six months.

Soon after Apple announced the App Store, other smartphone companies started jumping on the bandwagon. In October, when T-Mobile introduced the G1, Google announced that it was also creating an online application store for all its Android phones. BlackBerry maker Research In Motion, followed suit with its own application store announcement. And last month at GSMA Mobile World Congress in Barcelona, Microsoft and Nokia announced they are creating their own application stores.

The idea behind these application stores is that allowing independent developers access to the software and hardware will spur new creative and innovative applications. But even though Apple has provided the building blocks for developing new applications, the company has maintained strict control over what gets on the App Store and what does not. While the company claims it is trying to maintain quality and protect the user experience, some developers have complained about their applications being rejected. And others have complained that once on he App Store, it’s difficult for their applications to be featured and discovered.

But the real beauty of the App Store for Apple is that it’s a huge potential revenue driver, helping the company monetize the iPhone long after it’s left the store shelf. Apple doesn’t break out revenue from the App Store, but the company collects 30 percent commission on all apps that are sold through the store.

It’s true that many applications are free. But there are also thousands of applications that cost $0.99 and up. Brokerage firm Piper Jaffray estimates Apple’s App store generated about $150 million in sales last year and projects total sales will grow to $800 million this year, the Journal reported.

So far Apple hasn’t taken any legal action against companies preparing their own iPhone App Stores. But the Journal noted that Apple appears to be preparing a legal case. Last month, the company filed a 27-page statement with the U.S. Copyright Office, which oversees patents, making the case that modifying the software on the iPhone is illegal according to the Digital Millennium Copyright Act.

Whether this argument will hold up in court is yet to be determined. The Journal quoted a University of California Berkeley School of Law professor who believes the developers have “a pretty good” defense under the DMCA.

My prediction is that there will definitely be a good number of iPhone users who make the extra effort to “jailbreak” their phones and buy applications that Apple refuses to put in its own App Store. But the vast majority of iPhone users will stick with Apple’s App Store. And the reason is simple. It’s easy. Still, if these rogue application stores gain any traction, Apple will fight. And they will likely fight hard.

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