Technology Liberation Front - Latest Comments in Newsflash to FCC: The iPhone is a Closed Platform, and Consumers Love It

Re: Newsflash to FCC: The iPhone is a Closed Platform, and Consumers Love It

Ryan Radia — Fri, 07 Aug 2009 22:36:35 -0000

Second article from above, TechNewsWorld: "Reports indicate that Apple spent $100 million on the development of the original iPhone."

Third article is useless. I have no idea why I put it in there.

The fourth article isn't specifically addressing R&D expenditures but rather the financial risk that Apple has taken with the iPhone and its aggressive pricing strategy (which has worked out quite nicely for Apple).

There's no denying that lots of people want an open iPhone. Ten percent of iPhone/iPod touch users have installed Cydia according to its developer (via your slashdot article). Frankly, if I were an Apple exec, I'd probably try to cater to the openness-loving audience. But it seems that Apple just doesn't care about appealing to those folks, which is fine -- that's what all those other open phones are for. The idea that unless every product manages to be everything to everyone, then markets must be failing doesn't seem very convincing to me.

Re: Newsflash to FCC: The iPhone is a Closed Platform, and Consumers Love It

dm — Fri, 07 Aug 2009 11:39:58 -0000

Okay, I concede your point about "hundreds of millions in development" --- your first citation makes that pretty clear. It's hard to say how much of the over $3 billion Apple has spent on research in the last few years was for iPhone development, but even a tiny percentage of $3 billion will get you to hundreds of millions.

On the other hand, read those articles before you cite them! Only your first citation is relevant to Apple's development costs. The other three either talk about Apple's marketing moves, or how much it costs Apple to build an iPhone (no mention of the non-recoverable-engineering that would reflect the development costs).

As to customers dying for more openness: http://apple.slashdot.org/s...

Four million iPhone owners have both violated their warranty and found their way to the Cydia app store. That's maybe 25% of all the iPhones sold (17 million: http://www.networkworld.com..., though I'm sure there are a few jailbroken iPod touches among that four million, so the percentage is actually smaller.

Re: Newsflash to FCC: The iPhone is a Closed Platform, and Consumers Love It

Ryan Radia — Tue, 04 Aug 2009 12:24:23 -0000

We'll likely never know for sure how much Apple spent on iPhone R&D -- but estimates I've seen range from $100 to $150 million (see below). Also, Apple's entire R&D budget has been climbing steadily for the past few years and recently topped $1 billion. One can reasonably assume that at least some non-trivial portion of that was related to the iPhone.

http://www.applematters.com...
http://www.technewsworld.co...
http://www.tgdaily.com/cont...
http://www.businessinsider....

I won't disagree with you that some people would like their iPhone more if it were more open. But if so many customers are dying for more openness, then how do you explain the fact that the iPhone -- very much a closed device -- has been so darn successful at besting competing devices that are far more open? Windows Mobile phones are arguably more open, and they are widely available on every major carrier, yet they are vastly underperforming the iPhone in sales growth. And while Android is still nascent, when it begins to be widespread later this year, I suspect it won't make a big dent in Apple's sales.

Of course, I may well be wrong to assume that open phones won't take off any time soon. In fact, as a lover of open devices, I certainly hope I am. But I cannot deny that closed devices seem to be perfectly capable of pushing innovation forward. The natural evolution of the market isn't always easy to understand, but it just works -- after all, it is merely the aggregation of the rational self-interested voluntary choices made by millions of consumers and firms.

Re: Newsflash to FCC: The iPhone is a Closed Platform, and Consumers Love It

Ryan Radia — Tue, 04 Aug 2009 12:17:02 -0000

I'm not saying innovation will come to a complete standstill because of the FCC's crackdown on the wireless industry. Rather, the threat of regulatory intervention against successful firms like Apple and AT&T will distort investment in wireless innovation, causing firms to allocate scarce dollars toward more lightly regulated pursuits. Innovation happens when firms take risks in search of profit; thus, industries with artificially diminished profit potential will be industries that see less innovation.

Re: Newsflash to FCC: The iPhone is a Closed Platform, and Consumers Love It

dm — Tue, 04 Aug 2009 11:53:44 -0000

"Hundreds of millions" developing a new phone? Hardly. $20 million at the most.

Apple didn't "put big bucks on the line" to develop it --- read the article you linked to. Apple put big bucks on the line to market it.

Customers would like the iPhone even better if it were open. Not being open is why I got another phone. But as soon as the iPhone is open, I'll be replacing my other phone.

Re: Newsflash to FCC: The iPhone is a Closed Platform, and Consumers Love It

eee_eff — Tue, 04 Aug 2009 00:56:28 -0000

hmmm... yes they like it as long as it doesn't EXPLODE.....

http://news.cnet.com/8301-1...

Re: Newsflash to FCC: The iPhone is a Closed Platform, and Consumers Love It

rsgold — Mon, 03 Aug 2009 22:53:52 -0000

It's not ridiculous. Nowhere in the developer contract does it say that Apple will cover the entire cost of a refund for apps that have been rejected from the App Store. It seems ridiculous to me that any developer would expect that from Apple or any publisher.
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Re: Newsflash to FCC: The iPhone is a Closed Platform, and Consumers Love It

Kevin Newman — Mon, 03 Aug 2009 16:45:24 -0000

Being so successful, that your problem becomes getting regulated by the FCC is any innovators dream. I really can't see why some form of regulation would discourage anyone from taking a risk that might pay off with the same kind of success - just the opposite I'd say. Maybe the exceptionally timid would be scared off? ROFL

BTW, the mentioned parties, Apple and AT&T, are probably acting rationally, and are most certainly testing the edges of what they know they can get away with, but there's something of an odd rational market tinge to your entire article. Hasn't that been debunked by now? Markets are emotional, not rational.

Still I agree in principle, it's not time to regulate Apple and AT&T - the iPhone as big a success as it is, has not cornered a horizontal slice of any market. When they do that, they are a problem worth addressing, but not until then (and I doubt they'll ever get there - it's Apple after all).

Re: Newsflash to FCC: The iPhone is a Closed Platform, and Consumers Love It

Obesity — Mon, 03 Aug 2009 05:02:11 -0000

Sounds like some under the table deals are going on there. Definitely not above board.

Re: Newsflash to FCC: The iPhone is a Closed Platform, and Consumers Love It

nicholasdimitri — Sun, 02 Aug 2009 22:08:53 -0000

No. The FCC's concern is with telecom competition and the relationship between cellular providers and handset manufacturers; they aren't concerned with the closed platform model in general.

Re: Newsflash to FCC: The iPhone is a Closed Platform, and Consumers Love It

DioGratia — Sun, 02 Aug 2009 19:42:22 -0000

Shouldn't this be an Federal Trade Commission matter and not one for the Federal Communications Commission?