Is Apple killing competition in its App Store?

Apple’s iron-fisted control of the iPhone is starting to draw protests from some software developers who wonder if the company’s policy will end up squelching competition.

In at least one recent case, Apple appears to have denied approving a software program, Podcaster, for the iPhone, that could be considered competitive with the company’s own offerings or plans.

Apple not only makes the iPhone, but also controls its operating system and has absolute authority over what programs can be added to the device.
While there are thousands of phones from which to choose, the iPhone’s influence on the mobile market has been phenomenal in its short life. Its online App Store, which lets iPhone owners download software with a few clicks on the iPhone itself, has made its mobile platform extremely attractive to software developers.

After 15 months on the market, the iPhone is already the second top-selling smartphone in the United States, behind Research In Motion’s Blackberry. Even with this week’s introduction of Google’s Android operating system for cell phones, one that is open to almost anyone who wants to create programs for it, it will take a lot to best the best in show.

Apple also controls more than 70 percent of the digital music player market in the country with its iPod, which is also part of the iPhone. Apple’s online iTunes Store is also the leading digital music retailer in the nation, surpassing Wal-Mart earlier this year.

Podcaster lets iPhone users download Podcasts via the iPhone and eliminates the computer as an intermediary. Apple rejected the program for the App Store, part of the online iTunes Store, which delivers iPhone programs directly to the devices.

Duplication or competition?
Podcaster developer Alex Sokirynsky said he was told by Apple that Podcaster “duplicates the functionality” of the Podcast section of iTunes.

Another iPhone software developer, Fraser Speirs, said he believes there was another reason.

“Apple is now selecting for anti-competitive reasons,” he wrote on his blog. “An application that I really, really want was rejected by Apple because it replaces a feature in Apple’s own software.”

Nokia, the world’s largest phone maker, has practices similar to Apple in terms of top-to-bottom control, said Sravan Kundojjala, Strategy Analytics analyst on strategic technologies practice.

However, he said, Nokia “gives much more choice to developers. For example, it supports technologies that compete with its own. It supports Java, Flash, Silverlight in addition to its own Web Run-Time. This is not the case with Apple.”

Apple’s controls over the iPhone may be unique to the mobile phone industry, but it is not in others, said Michael Gartenberg, vice president of mobile strategy at Jupitermedia,

“For example, with video games, Microsoft, Sony and Nintendo control exactly what content goes on their devices,” he said. “You can develop all you want, but if they don’t publish the title, you can’t get your content on their machines.”