iPhone's Achilles Heel

(MoneyWatch)  The worldwide runaway success of Apple's iPhone is explained quite simply by the apps available for users to download. Apple has an unmatched catalog of apps and enjoys the benefit (and unparalleled competitive advantage) of the iTunes payment system, which is as frictionless as mobile payment systems get.

Apple has, however, exposed itself to a significant danger, which is to deprive the iPhone of the most important new class of mobile applications -- augmented reality. While still in its infancy, augmented reality is, as I've explained in an earlier post, the killer application for smartphones. And as Sarah Perez at ReadWriteWeb explains, Apple won't allow augmented reality-based applications into the app store.

Augmented reality apps... won't ever make it to the iTunes App Store because they're built using non-public APIs. Officially, Apple's iPhone [software development kit] does not offer access to any APIs for manipulating live video, forcing developers to use the available but unsupported ones instead.

This is clearly an opportunity other smartphone vendors aren't going to pass up, certainly not for the seemingly arbitrary and narcissistic reasons Apple has for excluding them.

Layar is already available on Android-based smartphones in Europe and should be coming stateside in the near future, giving the likes of HTC, Samsung, Motorola and other vendors adopting the Android operating system a significant leg up. Its developers claim they're working on a version of Layar for the iPhone, but that's a non-starter if Apple won't accept it. Nokia, meanwhile, is already hosting forums to demonstrate augmented reality apps for Symbian-based devices, and I'm sure developers for the Palm Pre and Research in Motion's BlackBerry aren't far behind.

Of course, Apple is likely to change the rules if and when (as I suspect) augmented reality becomes the driving force behind smartphone purchasing decisions.