The paragraph before your quote is pretty interesting too. Interesting
tension between developers who want to monetize their apps and consumers who
want everything free. Perhaps the App Store model is a good compromise where
$2.99 is close enough to free to suit everyone.

Apple prefers the app model for two big reasons. First, it makes their
products stickier, since you’re not just buying an iPad, you’re buying
Apple’s whole system for delivering stuff onto the iPad. Second, it seems
that people are willing to pay for apps while they are unwilling to pay for
anything through a browser. So people will pay $1.99 for an app that plays
some game when you can already play the same game for free on a web site
somewhere. Maybe people think of apps as standalone objects that have some
value and that they can buy, while they see web sites just as destinations
that they go to and that should be free. But as long as people will pay for
apps, that means that Apple can make money by selling them to you — and by
preventing developers from selling them to you directly.

Sent from my iPhone

On 01/06/2010, at 5:59 AM, Russ Abbott <[email protected]> wrote:

From:
http://baselinescenario.com/2010/05/30/personal-computing-apple-google-2/

- Sent using Google Toolbar

Apple wants to be the new Microsoft. It wants you to buy applications that
run locally on your computer iPad, and it sees its competitive advantage as
having the most developers and the most applications (hence all those
“there’s an app for that” ads). As Microsoft showed, if you can get a lead
and become the developers’ platform of choice, you can benefit from network
effects. ...

In April, Apple changed the
terms<http://daringfireball.net/2010/04/iphone_agreement_bans_flash_compiler>of
the iPhone developer agreement to prevent developers from using
cross-compilers to create iPhone apps. A cross-compiler is a tool that
allows you to take an application you wrote for one platform, push a button,
and repackage the application for another platform (in this case, iPhone
OS). The immediate target of this was Adobe, which was developing a tool
that would enable developers to take Flash apps, push a button, and make
them into iPhone apps. This simplest explanation for this is that Apple, as
the market leader, wants to make it* harder* for people to develop for
multiple platforms at the same time. “Write once, run anywhere” — the slogan
of Java, but also the essence of developing for the web — is *bad* for
Apple, and they want to make it as hard as possible. (John
Gruber<http://daringfireball.net/2010/04/why_apple_changed_section_331>makes
a different argument that Apple wants control over their platform and
doesn’t want cross-compilers between it and the developers, but that
interpretation is not inconsistent with mine.) In other words, if you’re
number one, then openness just helps the competition, because if developers
have to choose just one platform, they’re going to choose yours.

So Apple is competitive; we knew that already. And they don’t want to repeat
the mistakes of the 1980s and 1990s; we knew that already, too. But I think
the important point is that they are promoting a model of personal computing
where most of the developers write for the iPhone OS, and if you want to use
their applications you have to buy an Apple hardware product.

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