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Vodafone says Apple will meet it part way over branded iPhone apps

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Independent analyst comment Tony Cripps, senior analyst at Ovum

Apple may be willing to allow operator-specific applications to run on the iPhone, according to Vodafone's terminals chief. Any such applications would apparently be made available through the Apple App Store. While such a move would go at least someway towards addressing operator concerns over Apple's walled garden approach, it appears unlikely that the iPhone vendor will allow operator applications that compete with its own.

Open iPhone for operators was never inevitable

"At a briefing outlining Vodafone's handset strategy, Jens Schulte-Bockum, Global Director of Terminals for Vodafone Group, told analysts that Vodafone Italy is already experimenting with Apple to deliver a Vodafone-branded "portal experience" via its App Store. Other applications for other Vodafone operating companies could follow."

"A loosening of Apple's previous hard line on customisation was always a possibility once it offered developers the keys to unlock the iPhone with its software development kit (SDK) for native applications - Vodafone is as much a developer as anyone else in this view."

"However, it was by no means a certainty that Apple - which rigorously guards the entrance to the App Store - would welcome operator applications. Indeed, previous indications have suggested that the vendor was more than happy simply to use its operator partners to further its own aims, using their networks without offering much back in the way of iPhone customisation (although clearly iPhone operators benefit fiscally from the arrangement)."

But this may be as much as they'll get

"In this light, Apple's new-found flexibility is good news for Vodafone, and potentially for other operators. Nonetheless, this is by no means a capitulation by Apple, which Vodafone says is unlikely to allow it to offer branded applications that compete with iTunes, such as its own MusicStation and Music Store."

"In reality, it would be unrealistic to expect Apple to back down completely to operator demands to make the iPhone a fully open platform for their own services. And right now most operators, Vodafone included, are grateful to have the iPhone for the halo effect it brings to mobile data and web access in particular."

"But as iPhone numbers on operator networks grow this is sure to become a greater issue. Apple's strict terms and conditions will start to erode the margin on operators' own content services in meaningful amounts. This will lead them to make judgements as to whether they are happy to assist Apple in its goals long term or whether they should really look after number one."

"Apple appears to have recognised that some give and take may be necessary to quell operator concerns over what Schulte-Bockum described as a "pseudo-open walled garden". But will meeting Vodafone a third of the way suffice?"

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Tags: iphone  mobile data  itunes  apple  rsa  ovum  walled garden  vodafone  compete  app store