iPhone: Renegade app store opens but Apple wants to kill it

Chicago (IL) – Yes,
Apple’s App Store carries great stuff for your iPhone. But some of the
best applications Apple banned from the App Store are now found at an unauthorized store,
called Cydia. Many have not yet heard of Cydia because it cannot be used unless you jailbreak your iPhone, a hacking
process that preps the handset for running Apple-sanctioned programs.
As of today, The Cydia Store gets into the game by enabling sales of
sanctioned applications for the same 70:30 revenue sharing model that
Apple offers. But Apple is already prepping to send its legal
sharks after The Cydia Store by leveraging DCMA in order to push
jailbreaking into illegal territory. The question is, does it make any
sense at all? If you ask authors of ingenious programs that Apple
banned from the App Store for questionable reasons, or for the users who
obviously want to run them, Apple’s response is a stifling action against competition, one that threatens to kill the best iPhone software out there. But if you ask Apple they’ll say: a lawyer a day keeps the illegals away.

Jailbreaking was/is a commonly used hack, one that opens up the handset to install third-party applications — originally at times when there was not yet an App
Store or even the official software development kit (SDK) to allow the creation of third-party programs. [Editor’s note: When iPhones are jailbroken, Cydia and Installer are both automatically installed as part of the jailbreak process, from there the Cydia App Store is accessed — it does not have a generic homepage.].

Soon after jailbreaking allowed access to non-Apple software, central repositories like Installer and Cydia emerged to allow users to
browse, download and install unofficial iPhone programs on jailbreak phones. This
unfed desire of consumers convinced Apple to bring the official SDK and unveil the App Store
in July of 2008, but it was through Cydia and Installer that we
discovered and installed the first innovative iPhone programs — bar Apple’s

In many ways, Cydia has offered us a glimpse of the true
potential of the iPhone platform with applications like iBeer and
Popcorn which first appeared as unofficial releases.

Cydia Store challenges the App Store

shouldn’t come as a surprise that Jay Freeman, a 27-year-old
California graduate student who created Cydia, is now upping the ante
and challenging Apple by opening The Cydia Store for business. And why not?
After all, Cydia hosts a number of interesting applications you’re
unlikely to see on Apple’s App Store. Titles like Cycorder, the application that enables you to use iPhone’s camera to record video. Or the $29 PdaNet tethering program which replicates the functionality AT&T promised they would deliver “soon” — but is still nowhere to be seen. For a more comprehensive outlook, check this handy Mac World list of the best iPhone applications not in the App Store.

of today, programmers can even sell their applications on either Apple’s App
Store or Freeman’s Cydia Store. Both stores offer similar sales terms.
Freeman told the Wall Street Journal that Cydia will charge developers “no more than the commission Apple
does for his site’s billing services.”
to the paper, two more unofficial stores are also coming, like Rock
Your Phone
and another that plans selling adult iPhone games. But why
even bother anyway — you might ask.

Did Apple’s App Store kill jailbreaking?

is true that the advent of Apple’s App Store at first subdued consumer interest in
jailbreaking. But as more and more great programs were rejected from their App Store, some are once again turning to Cydia (and similar sites) to get the software
that would’ve otherwise never reached consumers because of Apple’s
App Store policies. For example, when Apple banned the podcasting program called
Podcaster on the grounds that it replicates an iTunes feature, the
developer who created it simply posted it on Cydia. Many other iPhone
applications banned from the App Store for various reasons have also found their home on Cydia
as well. The only problem is, using Cydia to install sanctioned
applications requires jailbreaking the handset, and Apple plans to
leverage this fact in order to kill the rival stores.

Cydia offers programs that would have never been approved by Apple. Pictured above is the home screen of a jailbroken iPhone to accommodate two unauthorized stores: Cydia and Installer. Using these two stores and the jailbreak iPhone, you can browse and install all the software that Apple says is no-no on the iPhone — like skinning application to personalize the UI, video recording, modem tethering, direct podcast downloading, and much more. But it does require you to jailbreak your iPhone first, which not only reduces stability of the handset — but may become illegal if Apple gets its way.

As of today, programmers who saw their applications banned from App Store can sell them on Cydia. Jay Freeman (who created Cydia) says he’s offering a comparable 70:30 deal like Apple does, whereby authors receive 70% of the sales price of every download, and Freeman keeps 30% to cover the billing system costs.


Read on the next page:  Is jailbreaking illegal, Apple protects its billion dollar iPhone software ecosystem.

Jailbreaking: Breaking the law or not?

Apple obviously saw this one coming and has prepared for it in advance. When
EFF proposed an exemption to the DMCA that would legalize jailbreaking,
Apple opposed it. And last month, Apple even filed a 27-page opposition to the proposal
with the U.S. Copyright Office. The company claimed that jailbreaking
reduces the security and reliability features of the handset by adding unauthorized
changes to the iPhone OS. This is true to some extent as jailbreaking
does put iPhone users at more security-related risks — but it’s often a price consumers are willing to pay because of the increased software benefits.

Apple also argued that jailbreaking might enable piracy as well. While
every App Store application, paid or not, is wrapped with FairPlay DRM
to prevent it from running on iPhones and iPod touches which are not
authorized for the iTunes Store account used to purchase an
application, hackers have recently cracked this copy-protection
mechanism. Please note that jailbreaking and unlocking are two
different things. Although unlocking your handset (for use with any
carrier) requires jailbreaking first, jailbreaking a phone does not also require that you unlock it.

While pirated
fee-based App Store programs have not yet appeared online, they may arrive
at anytime, tempting users to jailbreak their phones and install them.
Does this possibility put Cydia developer Jay Freeman on a collision course with
Apple’s legal sharks?

Ecosystem to protect

legal experts stress that pirating paid App Store programs does break
the law, but warn at the same time that the DCMA gives users freedom of
choice to jailbreak their device in order to install unofficial
applications. Susan Crawford, a professor at the University of Michigan
Law School, told NY Times that federal courts have ruled that the DMCA was used to stifle competition. “Courts have said you shouldn’t use the DMCA to leverage your copyright monopoly into other markets.”

remains to be seen if Apple can get away with leveraging the DCMA to deem
jailbreaking illegal and thus put Cydia and other unofficial installers
out of business. No matter how you look at it, Apple has a lot to lose
if the letter of the law says jailbreaking is legal and rival stores begin to gain
ground because of Apple’s self-imposed “ban any software” policies.

In January, Apple reported a record 500 million
applications download and 15.000 applications in less than six month of
App Store existence. Piper Jaffray estimates that the App Store raked
in $150 million in sales last year and expects this to grow more than 5x to $800
million in 2009. Other analysts also expect the App Store to soon
become a one billion dollar business. There is an ecosystem here to
protect and Apple will use all means at their disposal to protect it — and vigorously.

App Store was estimated to have cashed in $150 million in sales in 2008, but analysts expect it will zoom past one billion mark in annual revenues soon (with $800 million in sales in 2009). But the App Store is in a more favorable position compared with Cydia as it comes factory-preloaded on every new iPhone and is also a part of the company’s free iTunes jukebox software. However, companies like Cydia don’t have to make a billion dollars to be extremely successful, providing consumers with what they want and making millions themselves in the process.