Apple (Nasdaq: AAPL) CEO Steve Jobs may be the most powerful executive since John D. Rockefeller led Standard Oil or Bill Gates led Microsoft (Nasdaq: MSFT). If there's anyone who can convince developers to change everything about how they do business, it's Jobs.
Even so, the effort is seamy -- and it has at least a 50% chance of backfiring.
What he wants
Jobs wants smartphone software developers to forgo efforts to create cross-platform apps. He said as much in an open letter about Adobe's (Nasdaq: ADBE) Flash technology:
We know from painful experience that letting a third party layer of software come between the platform and the developer ultimately results in sub-standard apps and hinders the enhancement and progress of the platform.
If developers grow dependent on third party development libraries and tools, they can only take advantage of platform enhancements if and when the third party chooses to adopt the new features. We cannot be at the mercy of a third party deciding if and when they will make our enhancements available to our developers.
Translation: Please write directly to the iPhone programming interfaces. Your cooperation is expected, and appreciated.
Why Jobs is a genius
Interestingly, much of Jobs' letter is in nodding agreement with Google (Nasdaq: GOOG) over open standards such as HTML5. But the reality is that the license agreement for iPhone 4.0 hamstrings developers who want their apps to call out to third-party services or compile code independently. Cross-platform software need not apply.
To be fair, there's a very practical reason for wanting to stunt the growth of apps that share a common executable code base. Self-contained technical environments tend to be faster and more secure, as Jobs rightly points out in his letter. Cross-platform apps come with a cost. (Hence Flash's reputation as a security risk.)
Also, economically, this is exactly what Jobs should do. Apple investors ought to applaud his stance, just as Microsoft's shareholders cheered long-ago efforts to sustain the dominance of the Windows operating system.
Stop looking at me like that. If you can't see the parallels here, you're either not looking close enough, or you don't want to believe it. Once developers were freed to write software for many platforms by Java, follow-on technologies began to embrace the idea of runtimes -- virtual platforms in which executable code didn't need to know the underlying processor.
Now, with the advent of Web programming, coders are writing less to operating system interfaces and much more to interfaces that govern how data is shared, stored, and executed in the cloud, much like the "third party layer" Jobs speaks of in his letter. HTML and XML matter more than Windows and Mac OS X.
The core of Apple's issue
You've got to love the irony. In PCs, the cross-platform movement was a boon for Apple. When users found they didn't need Windows for critical apps, Jobs' company began selling more Macs.
Today, the Mac business is thriving even as Dell (Nasdaq: DELL) and Hewlett-Packard (NYSE: HPQ) are shopping for ways to compete with Apple in mobile devices. Revenue from Mac sales rose 27% in the company's fiscal second quarter. Cross-platform software is great!
Except that it isn't. Now that the iPhone is rising in popularity and taking market share from Research In Motion (Nasdaq: RIMM) -- RIM's leading share fell 1.5 percentage points year over year in the first quarter, IDC Research reports -- Jobs says developers should be forced to choose the platform they wish to develop for.
That stinks. Writing code is a difficult enough business. Apps may either sell poorly, or require frequent updates, or need outsized levels of support, or any number of other issues that take time and cut into profits. Cross-platform development offsets some of these headaches by reducing the time between creation and release. Now Jobs wants to take this advantage away from smartphone coders.
Regulators have caught whiff of the stench and may choose to get involved. Media reports say that officials at the Federal Trade Commission and the Justice Department are negotiating over which agency will be given authority to probe the legality of Apple's iPhone app development policies.
In other words, it's about to be May 1998 all over again. Only this time, Apple, not Microsoft, will be the one under scrutiny.
Will the feds take action against Apple? Should they? Discuss in the comments box below.
