Apple Opens Up the App Store

Apple (Nasdaq: AAPL  ) has been running a tight ship in the iPhone App Store --  too tight in many cases, inviting scathing criticism from users and developers. I'm sure you can appreciate the irony of Apple becoming a draconian enforcer of rules, after decades of thumbing its own nose at the establishment.

Maybe Steve Jobs saw that oxymoron developing, too. Apple has now relaxed some of its more infamous restrictions on what you can publish in the app store, and what tools you can use to create your applications. Adobe Systems (Nasdaq: ADBE  ) shareholders saw this as a major boon; the software company's shares shot up more than 11% on no other news of any significance.

But I would posit that Google (Nasdaq: GOOG  ) actually stands to benefit more than Adobe from the new rules. For one, Adobe's Flash platform is still not allowed to run in Apple's iPod/iPhone/iPad ecosystem; instead, you can now merely translate a Flash-based app into Apple's Objective-C code without fear of automatic rejection from the App Store. But more importantly, Apple has removed from its guidelines language restricting third-party advertising platforms from showing up in app code. That gives Google's pending $700 million purchase of mobile ad platform AdMob a lot more bang for the buck.

The App Store rules are still fairly restrictive when compared to the Android market (though Android's store has plenty of other problems). Then again, I guess that's the price you pay for quality control. Apple's app store is still three times larger than the Android equivalent. Microsoft (Nasdaq: MSFT  ) , Research In Motion (Nasdaq: RIMM  ) , and Nokia (NYSE: NOK  ) all have app stores as well, and there's even a tiny little virtual lemonade stand for Palm fans, even after the Hewlett-Packard (NYSE: HPQ  ) buyout of the company.

All of these competitors would do well to copy what Apple is doing right -- which now includes clearly defined and published rules for what your apps can and can't do. But seriously, Steve, how much would it really hurt to allow Flash to run on Apple's hardware?

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Google, Microsoft, and Nokia are Motley Fool Inside Value picks. Google is a Motley Fool Rule Breakers recommendation. Apple and Adobe Systems are Motley Fool Stock Advisor picks. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Google and Microsoft. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


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