Supply Chain Risk can hurt the little guys too

June 1, 2010 Leave a comment

Earlier today I was struck by ShiftyJelly – it didn’t hurt – that’s a screen name – and his assertions that as a developer for Groundhog Software in Australia, his company’s product for the ubiquitous iPad had been bombed by Apple’s App Store.   See his post for the gory details – in a nutshell his application was dumped by Apple because it allowed users to introduce an alternative desktop to the iPad.

You may or may not know that the App Store is the sole means of adding software to a “walled garden” device like the iPad or its famous sibling, the iPhone.  Not that that has deterred anyone.  Since the launch of the iPhone in 2007, and the App Store the following year, the Store has grown to host, at last count,  more than 185,000 individual applications.  Too many for a beginner’s sift, but with some attractive gems for people who know what they want.

As such, the iPhone has given rise to an army of developers – often individual bedroom-based hobbyists but not uniquely.  As in Groundhog Software’s case, serious investment has been made across an increasing number of commercial sector organisations.  With app downloads exceeding four billion at April 2010, there’s gold in them hills somewhere and an increasing number of commercial-scale development shops have joined-in.

So how do these developers define themselves?

That question is, I believe, absolutely critical to their, and perhaps even Apple’s future.

Maybe it’s easy to pour scorn on small-scale developers who have enjoyed a brief, if profitable flirt with opportunity for a year or two and are now taking cautious bites out of the hand that once fed them, waiting to see if things change before really sinking their teeth in.

On the face of it, Apple has created a set of products in its hardware and software that gives it massive scarcity power – nobody does it better, you might say.  But having spawned a market with all its inherent dependencies, to have the terms of that market dictated entirely by a commercial entity might prove a worry – we don’t vote for Steve Jobs after all, he only holds power while his products command the market.

What ShiftyJelly has hit upon is that Apple, with the backing of its shareholders,  now has the power to do what it will with the App Store including change the entry criteria, change the pricing /compensation model for developers or even just turn it off if it gets messy or goes off-track.   But Apple no longer controls the entire market, with Indie application web sites springing up to allow unlocked iPhones to download just what their owners please, at a price.

What I find really interesting here is that Apple’s main competitor in the app space is not going to be Android or Blackberry – because the verdict on the hardware is absolutely clear – but Apple developers who don’t work for Apple.  The real risk to Apple now is the mobilisation of that group – and from what I observe they are not incapable of such an uprising.

As an outsider it’s not difficult to observe a certain camaraderie among App Store developers – many are long-standing Apple customers who have stayed with them for years.  Perhaps some thought it was payback time for all that expensive hardware.  The power is not just in relationship either – many developers have what they consider excellent relationships with Apple – and in two of the cases in this post, Apple employees poured praise on their efforts despite having to toe the Apple party line on entry to the App Store.

So if you’re a small-time developer what measures should you reasonably take to limit your exposure?  All the traditional supply chain risk ideas apply.  The fundamental issue here is that Apple is your single source supplier – while the market for apps might be huge, your window onto it is tiny and under rigorous and increasingly unpredictable control.

Professionally-run businesses need to think about differentiation and routes-to-market.  Artificial controls such as Apple is imposing on the app market will come under increasing pressure while there is a public keen to purchase non-compliant applications – but if Apple is truly playing for a mass market, it will seek to control its market.  Last month, the BBC’s Rory Cellan-Jones reported on 19-year old developer Greg Hughes’ foray into developing for the iPhone – despite his sync app being turned-down by Apple he turned to the shadowy world of independent application distribution for Jail-broken iPhones and made a reasonable return, albeit significantly less than he could have achieved with Apple’s help.  Others are playing-safe with plug-ins for Apple’s Safari browser or offering games rather than more, ahem, serious business applications.

Apple now needs to watch two things, 1. the potential disenfranchisement of many brand-loyal followers and 2. that it is not caught pilfering innovative ideas from non-compliant apps in broad daylight – that could spark revolt.

The rest, I fear, will hang largely on Apple’s plans for the iPhone Operating System.  If, as some suggest, Apple is looking to safeguard a new world of computing that even the uninitiated can handle, it is unlikely to relax its standards any time soon.  Applications might end up a little more sterile but as mass-market consumers who generally want applications to perform simple tasks reliably, we are not likely to notice.  Innovation will flourish in bright spurts of glory in the independent sphere but will ultimately fall without official Apple legitimacy.  The status quo will also keep apps small and simple, with few possessing the will or resources to develop at a grander scale.  There is a gaping opportunity for brains at Apple to quit and offer some competition on the hardware front.

For now I am in agreement with my friend, Fraser Speirs – developer of apps including Darkslide for iPhone – that if this is the game you’re in, you need to be playing, that there are few plausible alternatives right now and we will need to see how the market itself and Apple want to take things forward.

If the worst comes to the worst, there’s always Windows and Blackberry.  We could use some reliable apps.