RetailWire Discussion: BrainTrust Query: Is a Chink Opening in the Apple Distribution Armor?

Ever since it opened its App Store, Apple has been the envy of every business operating in the physical world. With popular computing platforms consuming applications and content, and the App Store being the only source, Apple owned the distribution channel. Consumers had to pay for content and developers had to pay a "toll" to reach Apple consumers. But now it seems a chink may be opening in Apple's armor.

HTML5 is the latest version of the computer language used by browsers to display text and graphics and run web applications. The original HTML was developed in the early 1990's and has gone through a tortured evolution to its latest version. To ease the evolution, HTML5 consists of a set of well defined extensions while maintaining backward compatibility with existing HTML versions. Some of these extensions address well known weaknesses, including the ability to display video files and play audio without the need to use proprietary extensions such as Adobe Flash Player or Apple QuickTime player. But another extension threatens the Apple distribution armor by making it possible to run browser based applications from a local storage cache. Web developers can now write applications that are downloaded directly into browser cache without going through the Apple tollgate.

The first organizations to squeeze through the chink have been the Financial Times and ESPN. The Financial Times seems to have been inspired by the June 30th deadline Apple set for applications that download content from outside sources. In the past, content providers with their own servers could download content directly without paying a toll. ESPN seems to have been inspired by the ability to "write once and run anywhere." By writing their application in HTML5, ESPN only has to maintain one version.

Whatever the reason, there are probably a lot of application and content providers anxious to get away from the Apple tolls. There are some limitations because specific hardware features may not be accessible, but many applications will be able to substitute HTML5 versions for their existing versions. And it is not only the providers who will benefit. Consumers should see an advantage from being able to get content from sources besides the App Store.

Discussion Questions

Discussion Questions: Do you think consumers will benefit from getting iPad and iPhone content from other sources? What impact do you think this will have on Apple? What potential opportunities do you see for brands and retailers?

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Comments:

Consumers are accustomed to having their apps work. If apps can be developed that work outside the App Store, and those apps are reliable and useful, consumers may use them. But, if the consumer experience is not what they expect, consumers will shun the apps for those that have been vetted by Apple and reside inside Apple's walled garden.

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Max Goldberg, Founding Partner, The Radical Clarity Group

I agree, Max. Apple's devotees have been resigned (somewhat reluctantly) to accepting a more limited selection of applications in exchange for the promise of better reliability and consistently of design. With the Apple universe expanding -- encompassing a much more diverse consumer base -- it will be increasingly more difficult for them to maintain that "trust us...we know what's best for you" relationship.

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Rick Moss, President, Founder, RetailWire LLC

Apple is Apple. The devotees will remain loyal. I am a Microsoft devotee who is seriously considering an iPad (but not an iPhone).

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

A more open market will logically benefit the consumer, and Apple will have to live, like the rest of us, in a highly competitive world. That said, another aspect of this will be more pressure on consumers to become more technology proficient. The choices now being opened up will demand that the consumer understand fully what he is selecting. For other providers, however, this opens up opportunity, and it is up to them to take advantage.

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Roy White, Editor-at-large, RetailWire

Consumers win and strangle enough Apple will win. One of the things that hurt the original Apple computer was the fact that anyone could build a computer to use DOS but only Apple could build a computer using their own operating system.

If they're not careful, Android open source could do the same thing to the iPad, iPhone or iWhat-ever-else.

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Mel Kleiman, President, Humetrics

There's no question that some users will opt to go outside the store if they really like the app. If this comes to a point of pain for Apple, my sense is that they will strengthen the gate (hello Adobe Flash Player). Moreover, with apps numbering in the hundreds of thousands, I'm not sure how big an impact this would have overall.

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Bill Emerson, President, Emerson Advisors

The more content that exists that can be used on the Apple hardware and iOS, the more Apple products will be sold. Do you think that Apple sees this proliferation of content as a bad thing?

I think not.

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Joel Warady, Chief Marketing Officer, Enjoy Life Foods

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BrainTrust Query: Is a Chink Opening in the Apple Distribution Armor?

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