Operating system vendors don’t like it when an operating system sticks around for long, but a large segment of their customers do. Large corporations and small business share a common practice – get the most out of the system you have, because the cost of upgrading infrastructure is incredibly expensive.  Walk into a bank like US Bank, and you’ll find most desktops running Windows 2000 Pro. Many home users  and small businesses are happily running Windows XP desktops because Windows XP lets they do what they need to do. And as much as Apple doesn’t want to admit, K-12 schools aren’t throwing away their old PPC based Mac OS computers.

A decade ago, it was true that the vast majority of software purchases took place for computers within their first six months of ownership. That was a time when solutions weren’t being delivered by server side or social service applications.  Shrinkwrapped software was sold primarily through resellers or distributors, though vendors were beginning to wake up to direct download sales. The channel hasn’t gone away, but the life cycle of a software release is shorter.

A lot of early adopter iPhone buyers are sadly learning that they won’t be able to take advantage of the next big release of the iPhone OS.  However, it is characteristic of early adopters of every stripe to want to trade up. That is a relatively painless obsolescence because it is the expectation of the type of customer who is willing to pay a much, much higher price for a product, rather than waiting a year or two for market forces to reduce the cost.

Planned obsolescence is very much a concern for independent software  vendors; not only for their own products, but what is forced onto them by their hardware or operating system partners.  For ISVs, the key is to sell as many units as possible, and one way to retain or gain new customers is to allow customers to use their titles on top of old operating systems. That’s why as a developer you need to consider carefully what tools you use, and also what operating systems you target. One thing that Microsoft Windows and Linux have in common is that developers can choose to have longer product revs if they want.

The language in the iPhone 4 SDK that is stirring up developers is the following:

3.3.1 — Applications may only use Documented APIs in the manner prescribed by Apple and must not use or call any private APIs. Applications must be originally written in Objective-C, C, C++, or JavaScript as executed by the iPhone OS WebKit engine, and only code written in C, C++, and Objective-C may compile and directly link against the Documented APIs (e.g., Applications that link to Documented APIs through an intermediary translation or compatibility layer or tool are prohibited).

At issue then are applications built with languages other than Objective-C, C or C++ (unless a web application). The most interesting word here is original. Of course, these languages are the ones supported by coding in Apple’s tools, and any third party tools – integrated development environments and compilers – have continuous markets because they are not represented by Apple, with the biggest being the forthcoming CS5 version of Flash that Adobe is targeting for iPhone development.

Like many Apple strategies, it isn’t always about blanket denial but about control.

Even though the SDK seems to target almost any non-Apple development environment, there is no reason why Apple cannot provide to selected tool vendors a selective amendment – meaning, in order to get around onerous terms, such tool vendors would have to enter into an agreement directly with Apple. It turns the party from being all street to invitation only, wherein they could allow some tool vendors but deny others.

Now back to the term original. This is interesting because it begs the question of what original is. Does this mean a vendor tool that allows designing of applications in one language, but ultimately can generate an Objective-C based project is original? Does that mean that an environment and components that are entirely built with Objective-C, C or C++ also be considered original?

Updated April 9, 2010 12:55 PM

Rev Journal and developer Richard Gaskin has some interesting faqs about the Apple iPhone market share and why it is a mistake not to support high level languages.

The Valentina for iPhone Client library doesn’t include its own local data store, but that’s okay. You are better off having your complex queries crunched on you server hardware; its fast, and communication is very fast.

I don’t want to talk about the technical details of the release, but as John Milton put it, to justify the way of God to men on the release format and what the business implications are for the release and the iTunes Store venue. Along with the interfaces, you get an updated version of Apple xCode. Like most developer releases, you should always expect to be running Apple tools on the newest generation of processors and the most up-to-date version of the operating system. Yes, that means as a hard core developer, you need to have a modern computer and the most modern version of the operating system – if you are a starving student on an old PPC Mac, you are out of luck. While backwards compatibility would be nice for the unmonied, at the end of the day, Apple – like any sensible company that is giving its tools away for free – needs to control its costs. Getting you to upgrade means you aren’t actually developing for free, but it does mean Apple can release tools sooner rather than later. Apple is also offering an official developer program for iPhone for $99, which if it just answers one question for your commercial product – more than pays for itself.

Why the New Version of xCode?

If your experience with cross-platform development consists of working with products like Runtime Revolution or REAL Software’s REALbasic, you’ve been mostly protected – unless you go out of your way to support native features – from historic cross platform issues such as the nuances of operating systems. On the other hand, except if you were using these products during the move from the PPC processor to x86 architecture, you didn’t really have to worry about the hardware end. Apple’s move from PPC to x86 was extremely smooth, and a real joy compared to the move from the Motorola 68000 series to PPC.

With the Apple iPhone, you don’t have a move to a huge assembly of parts in a spacious tower case, but an entirely new hardware framework that has to also include a (for its size) spacious screen and the ability to synchronize data very, very quickly.

If the hardware end fascinates you, there are plenty of tear downs available – check them out on Apple Insider and YouTube.

So first things first – at least with this release, hold Apple blameless for making you upgrade your development tools and extracting $99 – or even making you upgrade your hardware. I am sure these will more than cover Apple’s out of pocket costs but it really isn’t asking all that much. Windows developers – you are out of luck. Your development tool set is going to cost you at least the sell in cost of a Mac Mini at $599.

The Apple Walled Garden

It has been widely reported that you will follow Apple guidelines in developing your applications – or else. While this annoys many, Apple doesn’t want to get your tech support calls.

Back in the early 1990’s, I used to sell Now Utilities – a great set of utilities that patched the Mac OS. Since it patched the OS, it generated a huge number of support calls to Apple whenever a modest update to the operating system was released. Apple knows the pain it is avoiding here, and does not want its technical support center getting called about your applications.

Say all you want about preserving user experience – this is a real cost issue.

The iPhone and iTunes Monopoly

If you want to sell your iPhone apps, you will do so through the iTunes store – and Apple’s taking a 30% cut.

That certainly does monopolize how you sell your application – but these types of constraints are nothing new if you have been in the game or console industry for more than just a few years. Remember the Super Nintendo? Back then, you had to buy your cartridges from Nintendo, and you only got them if you could pass Nintendo’s rigorous quality standards – and morality standards for specific target markets. While life became somewhat easier after the release of the original Playstation, instead of paying for both the media and a royalty on game runtimes, you only had to pay the royalties. This is really nothing new. If you ship games on most platforms, you are paying the console game maker – Nintendo, Microsoft and Sony – just for the right to develop and deploy those games. This is how they get by with selling the consoles so cheaply compared to their cost.

You also do not need to look any farther than Microsoft for a parallel system in deployment of XNA based games through xBox Live. Microsoft also just announced at Game Developer Conference that you’d be able to develop Zune games using the same methods.

Spurious Comparisons

The 30% that Apple is asking you for – is that a lot? A small number of shareware and traditional developers have sent me their praises and complaints.

For those who have saddled themselves with expensive online processing systems to make their small business more convenient to run, this seems like an excellent deal. It really isn’t a good comparison. Most expensive online processing systems are just that. They add convenience, but they don’t add any value in improving your sales in a strategic way. You could say that iTunes Store does give you strategic value – because its the only place you will buy apps, and not being there means you have no business on the iPhone using the SDK. You should say that Apple is doing you a favor by ensuring that you are forced to carefully reconsider if your solution could be delivered as a web application.

For those who use business systems that pare merchant costs down to below 5%, it may seem positively tyrannical. If you fall into this group, chances are you are not already selling through traditional resellers.

Traditional software resellers do not give you anything for free when it comes to marketing, and you are giving them somewhere between 20-40% of your list price. Just based on margins – the iTunes Store is a good deal – except for one thing: it is effectively your exclusive reseller. This is a huge upside to Apple, because in order for you to market your product, you are effectively marketing the iTunes Store – all roads lead to iTunes Store. The downside is that you are at the mercy of the choices that Apple makes – which iTunes Store your product can appear in (limiting access to specific locales) and limiting how your product is presented at the point-of-purchase.

From a strategic perspective, the iTunes Store monopoly shouldn’t make you happy. You aren’t gaining anything by being in there, except that its the only game in town and not being there means you aren’t in the market at all. That being said, this could also be a non issue for you if you can segment out your iPhone application business from the rest of your business, and that segmentation doesn’t bring with it additional disadvantages. Ill save the details on this, including some work-arounds, for a future discussion.

Deal or No Deal

So is this a good deal or bad deal for developers? While the answer is far more complex than a simple yes or no – Ill still give it a shot. Deal! If you are already developing on the Mac and you can carefully segment out your iPhone application from the rest of your business strategy, there isn’t a big downside to this. Your tool cost is low – not free – but low. And since the exclusivity doesn’t impact your strategy with proper segmentation, the 30% cut Apple is asking for is entirely reasonable.