Apple's App Store Screw-Ups Are a Strategic Danger

Last Updated Apr 16, 2010 3:20 PM EDT

Watching the Apple (AAPL) app store game of ping-pong: Zip! Your app is denied. Oops. Boom! It's approved! The back-and-forths are dizzying. A match has been in full swing this week with news that Apple turned down an app from Pulitizer Prize-winning editorial cartoonist Mark Fiore. Why? Why? Because his satire "ridicules public figures."

After a couple of days came news that Apple had backed down and invited Fiore to resubmit the app. That's corporate-speak for, "Oh, we really screwed up in public, so we'll make nice." The long list of App Store incidents, from arbitrary turndowns to draconian controls on independent software developers, raises the question of whether Apple's operation has gone beyond a PR black eyes and now poses a significant danger to Apple's ongoing strategy for its mobile platforms like the iPod, iPhone, and iPad.

The Fiore incident was particularly bad for Apple because the subject was political speech by someone who had just landed the top prize in American journalism. But this isn't the first time that the App Store's clumsy operation turned Apple into a walking PR blunder (and to do that at at an image-obsessed company like Apple takes an enormous amount of effort). Let's review some of the I cannot remember a time when Microsoft (MSFT) or even Google (GOOG) stumbled so frequently and so publicly in a such a short time. The ineptitude is even worse considering how good Apple normally is at public relations and marketing.

But public embarrassment is the least of the company's problems. The inconsistent, arbitrary, and draconian operation of the app store has already started to anger business partners, particularly among smaller developers who are often responsible for the bigger hits on the iPhone OS platform. I've also heard from numerous Apple product fans who've found the entire app approach to be off-putting.

To some degree this seems to be a result of the App Store's raging popularity. The staff clearly cannot keep up with the incredible volume of apps passing through the App Store -- in part, because Apple has made itself the only sales game in town.

That gets to the bigger part of the problem: the high-level decision to control every aspect of app creation, sales, and deployment. It has already begun to backfire and will only get worse. As that happens, Apple will do exactly the opposite of what it wants and open a window of opportunity for Google, Microsoft, Motorola (MOT), RIM (RIMM), and many others to lock down large segments of the growing smartphone buyer market. Yes, out at Apple headquarters it seems to be 1990 all over again.
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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.

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