Now that the first software-only hack for unlocking the iPhone is in the wild, I have to wonder how Apple
privately is handling all of this. Publicly, they have stated that they are neutral on the idea of 3rd-party applications, which basically applies to this software-only hack. But I pose the question: if you could stop this hack from working, would you?
Arguments for blocking the hack
The money
The people at Apple most likely gnashing their teeth are the accountants, and Peter Oppenheimer most specifically. Rumor has it that Apple has an agreement with ATT which earns Apple $3USD/mo for each iPhone subscriber, and $11USD/mo for each new (to ATT) iPhone subscriber. Given that Apple just recently sold it's 1 millionth iPhone, and the ATT subscription agreement is for 2 years, simple and conservative math yields a 2 year income to Apple of $3MM/mo for the next two years, or $72M USD over the next two years.
$72MM is a fair amount of money, but more than just the end number, its a recurring revenue stream which is the holy grail for sustaining any business, large or small. iTunes, for example, doesn't make a dime on the download of the client software, but rather earns money on each and every song purchased; every day; every month; for as long as iTunes is the dominant player in the legal online music download space. Now that is a killer application. And that is exactly why iTunes is constantly battling the likes of Hymn and SharpMusique.
User experience
The phone I use is a 3 year old handset running an unbridled version of Windows Mobile 2003. Behind closed doors, you could certainly get Microsoft to admit that WM2003 has significant flaws, the most glaring is that it doesn't tell how much battery life is available on the main screen. For the first six months with this phone, I would gamble taking the handset on an overnight without having a charger available, as it's a bit of a battery hog to boot. The only available option to this problem was to purchase a 3rd party tool that displays the battery information right on the screen.
The solution is elegant and provides better feedback from the phone, but it also has it's issues. At it's root, the solution significantly alters the UI and the experience I have with the phone. For someone like Apple, who worked so hard to create a specific experience, this might just be the reason to extinguish the hack.
For example, one of the iPhone's five main sales points was visual voicemail. With the hack (and service with someone other than ATT), this feature is gone. Additionally, Steve Jobs specifically mentioned his concern to having 3rd party applications on the iPhone in a NY Times article, for fear that you load "three apps on your phone and then you go to make a call and it doesn't work anymore."
This hack should be driving the industrial designers in Cupertino completely batty.
Arguments for leaving the hack alone
Market share
I propose that a sexy piece of hardware, such as this, or the XBox 360 will have an inherent market regardless of the functionality or price. If it can be hacked, I would suggest that you're going to get a perceptible bump in sales directly proportional to the ease of the hack implementation. Engadget describes how a hackable system (XBox 360) can lead to tangential sales (DVD+/-R), but I would argue that Microsoft also saw a bump in sales. Was it a 50% bump? Not likely, but even a single percentage bump in sales would be welcome in such a competitive marketplace.
I hacked my original XBox. I didn't do it to copy software, but rather to run all of the great 3rd party software developed for the hack, such as MAME. As a matter of fact, that hack was the primary reason I purchased the XBox versus another game box.
The petri dish of 3rd party applications
One of the largest complaints leading up to the launch of the iPhone was that it lacked the ability to run 3rd party applications on the handset. Although Jobs is worried about 3rd party apps, he's not entirely against the idea either. In my opinion, he shouldn't be. The Palm used to be the undisputed champion of the handset market not because it was sexy, but because it had the largest number of 3rd party developers writing software for the OS. Heck, this was exactly how Microsoft beat Apple in the personal computer business of the '80s and '90s.
Although Jobs thinks Safari is an acceptable sandbox to write all of the applications to run on the iPhone, that idea is flawed in that it inherently allows application portability, which the Palm OS applications didn't. In other words, if Microsoft can (finally??) get a handset and OS to the market that is stable and has a web client that doesn't suck, all of those web-based apps will suddenly and transparently work on that handset as well. Facebook? Check. YouTube? Check. NYTimes? Check. How about a portable iTunes client?
What this hack (more specifically, the underpinnings of the hack) allows is the ability for the millions of creative minds to do more in months with the iPhone than the thousands of Apple developers could do in years. Specifically, all those disenfranchised Palm OS developers can now find a new OS to start porting their previously hot-selling application to. It's a win-win solution for Apple.