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Published on March 6th, 2009 | by Babar Bhatti


Unauthorized Applications On Jailbroken iPhone: A Threat To Apple's Business

Jailbreaking iphone has been popular for hackers from the time iPhone was launched. Over time the combination of unauthorized software on unlocked iPhone has become a threat to Apple’s business of selling applications. Consider the popular app store and how applications have to go through a rigorous process of approval. Now renegade stores are showing up online to sell unauthorized software for the device. Unauthorized iPhone software such as PdaNet makes the device into a laptop modem.

Big money is involved in this battle.

Apple collects a 30% commission from sellers on its store. It is estimated that the site generated about $150 million in sales last year and projects total sales will grow to $800 million this year.

Wall Street Journal reports:

The developer behind some popular iPhone software on Friday plans to open a service called Cydia Store that could potentially sell hundreds of iPhone applications that are not available through Apple’s official store. Users must download special software that alters their iPhones before they can run these programs.

Another small company plans a store called Rock Your Phone for iPhone users who have not yet modified their devices to make it easier to download and buy unauthorized applications. A third start-up is building an online store that specializes in selling adult games for the iPhone.

The upstart sites can carry software programs that Apple’s official store won’t, since the company tightly controls the kinds of applications it allows. Among the programs that Apple doesn’t allow is a free one called Cycorder, which turns the iPhone into a camcorder. Another program, which costs $29, dubbed PdaNET lets people use their iPhones as laptop modems to connect to the Internet.

Jay Freeman, who created Cycorder and is behind the Cydia Store, says he decided to open the store so developers like himself have a way to make money from their efforts. Mr. Freeman, a 27-year-old computer science doctoral student in Santa Barbara, Calif., says he intends to charge developers no more than the commission Apple does for his site’s billing services.

A big hurdle the Cydia Store and others face is that the applications they offer typically only work on iPhones that have been modified, or “jailbroken,” to allow users to download unauthorized programs.

Apple maintains that jailbreaking an iPhone violates copyright laws. Mr. Freeman says software he created to modify the iPhone has been installed on about 1.7 million iPhones.

The alternative stores could cut into Apple’s revenue at a time when software has become an important way for the Cupertino, Calif., company to continue profiting from iPhones, even after consumers have shelled out $199 to buy them.

The App Store is also strategically significant, since it keeps consumers tied to using their iPhones. Already, customers have downloaded more than 500 million applications from the App Store.

But the App Store rejects some submissions, for technical and content reasons. It is also so sprawling that it can be difficult for a new developer to get programs noticed, says Adam Engst, publisher of TidBITS, a site specializing in news about Apple. “It leaves open the possibility that independent stores could do a better job.”

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