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Apple Plans App Store Shakeup with Franchises, Mac Applications

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A source within Apple’s iTunes group has alerted us that Apple plans to revamp the extremely popular but highly controversial App Store. The change most likely to generate discussion will be the addition of franchises that allow anyone who meets Apple’s criteria to run their own version of the App Store, but we think the more interesting development is Apple’s plan to start accepting Macintosh software as well.

Although details remain sketchy, the frequent negative press surrounding app rejections and removals has reportedly created significant pressure within Apple. Rather than take a common-carrier approach and open the App Store up to all comers, Apple has opted to go in the other direction, with plans to remove tens of thousands of apps that supposedly offend Steve Jobs, who never anticipated the glut of fart apps.

To put the company in a position where it could defend its choice to remove so many apps, Apple iTunes head Eddy Cue reportedly took a page from the plans for the upcoming iBookstore (where Apple doesn’t assume it will be the sole supplier of books for the iPad) and came up with the idea of franchising the App Store, thus allowing other companies to run their own versions of the App Store and accept whatever apps they wish.

According to sources, franchisees would have to meet certain aesthetic and performance criteria set down by Apple, and could sell apps through either desktop applications like iTunes, or through iPhone OS apps like the App Store app. Franchisees would also agree to certain liability clauses should apps they distribute result in any sort of denial of service to a cell carrier’s data network or cause other widespread harm. The goal is to allow franchisees to write their own acceptance policies, but to set up the contracts to eliminate the likelihood of malware.

This will undoubtedly result in some franchisees accepting a flood of adult applications that Apple has thus far refused, and franchisees will also have an instant customer base among the developers whose apps Apple plans to remove from the App Store. Although franchisees will be free to set their own royalty sharing deals, Apple will take a 10 percent royalty on all sales.

App developer James Thomson of TLA Systems was positive about the proposed move. “Finally, with these new franchise stores, I can remove all the censorship from PCalc,” he said. Thomson made headlines last year when he released a version of his scientific calculator with a profanity filter (see “PCalc Prevents iPhone Profanity,” 1 October 2009). His other iPhone app, a LOLcat/Twitter mashup called Twitkitteh, might not meet Apple’s new criteria, but Thomson was undeterred. “Hopefully, another store will allow me to realize my true vision for Twitkitteh.”

More interesting, in our opinion, is that Apple also plans to start accepting Macintosh applications to the App Store. They’ll have their own section of the store, and developers can upload and manage them through iTunes Connect, just as they do with iPhone OS apps now. Developers will still be free to set their own prices, and Apple’s standard 70/30 deal will apply. On the user side, Mac applications will be purchased, downloaded, and updated through iTunes, in exactly the same manner as iPhone apps.

Jon Gotow of St. Clair Software, makers of Default Folder X and HistoryHound, said, “We’re thrilled that Apple is letting us in on the action with the huge user base in the App Store – as Mac developers, we’ve felt left out with all the iPhone and iPad excitement.”

Developers will be free to sell their Mac applications directly and through other resellers, just as they do now, which will make Apple just another reseller, though one with a store that’s located on every Macintosh sold. Our source indicated that acceptance into the App Store will be a non-trivial process for Mac applications, since Apple wants to ensure that it’s selling only the best applications, and Apple may require a significantly higher standard in terms of interface design and software quality assurance than many developers are able to meet.

St. Clair Software’s Gotow noted, “I’m confident that we’ll meet their acceptance criteria if we ramp up our spending on artwork to the same levels we normally put into development.”

Along with the additional sales opportunities, some independent developers expressed interest in running their own versions of the App Store, Gotow among them. “Being able to open our own app store and accept whatever we judge to be good software will open all kinds of new opportunities.”

Although the criteria for opening an App Store franchise might be beyond the means of an individual developer, we anticipate that some franchisees will enable the creation of branded sub-stores – perhaps embedded within a Mac application itself – that would enable a small developer to resell products from like-minded indies.

Though nothing was said about the iTunes Music Store or the upcoming iBookstore, we’re hoping the franchise opportunity extends beyond the App Store, since we’d love to run our own online bookstore with just those titles we think are worthwhile. And we’re sure that there are numerous sites out there that would sell their grandmothers for the chance to dip a toe into the iTunes music sales business. However, Apple may be less interested in opening up to franchisees in both of those cases, given that there is already plenty of competition that enables Apple to avoid criticism of heavy-handed approval policies.

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