Open versus closed and the iPhone app store

I am a big believer that in the long run open always wins out over closed, and that is an argument which at the theoretical level that rarely gets much pushback these days.  At the practical level it is often different though, and Mike Masnick has a good post up on Techdirt that goes a long way to explaining why, focusing on the case of Apple’s iPhone app store:

I’ve been getting into some interesting discussions with people lately concerning open vs. closed platforms — especially in light of the supposed “success” of Apple’s iPhone app store, which is a very closed platform. And the point that I’ve tried to make is that you have to understand the trajectories of these things over time. At any given time, it’s never difficult to find a closed platform that is successful. In fact, I’d argue that if you are reshaping a market, often it helps to have a closed platform initially to drive that market in a useful direction — though, this can really only be accomplished by someone visionary (Steve Jobs certainly counts). The question is how does this play out long term. And the answer is that you can’t stay closed too long, or open solutions will catch up and surpass you. We’ve seen this pattern multiples times (closed AOL –> open internet?).

Mike goes on to point out that open solutions are often substandard to closed ones, at least in their initial stages, and also that the point when momentum shifts is often a subtle one that participants in the closed solution ecosystem can be slow to recognise.

Focusing more squarely on the iPhone and app store – it is a relatively closed solution (all content has to be approved by Apple) but one that is a massive leap forward from anything available previously, but it is not a perfect solution, particularly not from the perspective of developers.  I’ve written about this before, giving some anecdotal data on the frustrations that Apple’s developer partners feel and wondering whether Apple’s culture is an inhibitor to them being fully open and working well with third parties, and now this post on marco.org gives more colour to the topic, the whole piece is well worth a read, but here are two highlights:

iTunes Connect, the interface through which developers submit and manage apps, is extremely buggy and frequently mishandles important operations. On multiple occasions, it has posted screenshots and description text from an in-review update submission to the live app page, revealing upcoming features to competitors, blowing press exclusives, and causing my customers to email me angrily asking where the features are and accusing me of bait-and-switch.

and

Trying to communicate with Apple is like talking to a brick wall. The ADC phone reps can’t do anything, emails are rarely answered, and nearly every response that actually gets through just tells you to keep filing duplicate bug reports (that rarely get answered) until the problem goes away, which may never happen.

The simple problem is that in a closed ecosystem there isn’t enough incentive for Apple to fix these problems, or as the post on marco.org has it “Apple thinks this is good enough”.  I’m a strong believer that at some point an alternative will emerge that is good enough on one narrow dimension to take a corner of the market and then it will expand from there, and others will arrive, and that will force the market to become open.

At this point though the Apple solution is still far superior to anything else out there, and I don’t think we have yet reached the point of momentum shift, which makes it difficult to see past the iPhone and the app store.  As with all areas of business, there is no certainty, but given all of the above if I was running a startup in this space I would avoid coupling myself too tightly to the success of the iPhone and app store.

  • Very interesting subject.

    Facebook is another example of a closed platform. If you have a significant lead in either functionality/brand (iPhone/app store + iTunes/iPod) or like Facebook, have the benefit of a massive network effect, then I can see why you would remain closed in the short/medium term to maintain your advantage.

    In Facebook's case, I can see them opening up gradually – but probably only in the areas where they do not dominate such as status updates/Twitter like functionality.

    For the iPhone, as you say above, the app store is currently a big differentiator. Once the other platforms catch up and developers split their time between the platforms, the benefits of remaining closed will reduce/disappear.

    It will also be interesting to see how iTunes reacts to the change in consumer behaviour in consuming music from download -> streaming. Music portability is still important so they may be protected from this.

    I guess it comes down to balancing whether the advantage of staying closed outweighs the disadvantages of pissing of your customers and development community.

  • On the subject of music, it will be interesting when Spotify properly comes to mobile. Apple will have to choose between allowing them onto the iPhone platform and cannibalising iTunes music sales or risking people going to other devices just so they can get Spotify.

  • Good point. Do you think Spotify will be able to provide a good enough streaming service for mobile? No problem with wifi, but personally speaking, I find my mobile signal is not that reliable.

  • Apple could be much more developer-friendly, yes, but I wonder how many of the problems described on Marco.org are attributable to a lack of planning and preparation for the App store's rampant success? Perhaps Apple are still playing catch-up with a logjam? Admittedly, as an app producer I'd prefer to believe that Apple are throwing millions of dollars at improving the App store's approval/deployment process, and I certainly hope that Nic's diagnosis is incorrect. Perhaps it's too early to say?

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  • Nic, assuming such an open platform existed (at least in embryonic form) do you know of any VCs who are particularly interested in this space?

  • Nic, assuming such an open platform existed (at least in embryonic form) do you know of any VCs who are particularly interested in this space?

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