A site devoted to providing iPhone software for those who object to the Apple monopoly has announced plans to start charging for applications, presenting the possibility of real competition in app provisioning.
The Cydia website has been providing tools for unlocking, or "jailbreaking" iPhones, as well as non-Apple-approved applications to run on them, but from today users can pay for their software too in a development that threatens Apple's monopoly and long-term business model.
Most smartphone users can install software from a plethora of application stores, but iPhone users can only shop at Apple's iTunes store, unless they take the step of unlocking their handset. Many developers want to bypass Apple's restrictions on what they can do, but until now that has meant giving their software away to jailbreakers or making their own arrangements for billing; hardly a sustainable business model, but with Cydia organising a billing system then jailbreaking could easily become mainstream.
Apple maintains strict control on the capabilities of applications sold though iTunes, both in terms of functionality and taste. Bouncing breasts are fine, as long as they are real, but mentioning booty (pirate or otherwise) is verboten. Applications allowing the use of an iPhone as a 3G modem (known as "tethering") are also a no-no, along with VoIP applications that work over 3G connections, presumably in deference to the carrying network that paid for the handset.
Jailbroken handsets have none of these restrictions, but right now there's no standard way for users of jailbroken phones to pay for applications, so most are given away. A decent VoIP or tethering application - both of which are already available - could be the killer feature that makes iPhone owners jailbreak their handsets - and once they've done that they've no reason to come back into the iTunes fold.
Apple can be counted on to fight this move hard, and recently argued that jailbreaking an iPhone was illegal under the Digital Millennium Copyright Act. A single site providing tools and applications could quickly be shut down by Apple's lawyers, so it seems likely the only reason that Cydia has been allowed to survive this long is that without being able to charge users the software developed for jailbroken phones was a commercial dead end.
iTunes is important to Apple, as a provider of services rather than hardware, so it'll fight any attempt to break its monopoly on iPhone apps. Cydia will need deep pockets to fight the boys from Cupertino, but every day the battle continues more iPhone users will discover the advantages of breaking free.
The store should be allowing payments later today, accessible through the Cydia application on any jailbroken iPhone. ®