Marco.org

(Thanks, John Gruber.)

Apple Inc. faces a growing threat to its iPhone business, as renegade stores spring up online to sell unauthorized software for the device.

The developer behind some popular iPhone software on Friday plans to open a service called Cydia Store that could potentially sell hundreds of iPhone applications that are not available through Apple’s official store. Users must download special software that alters their iPhones before they can run these programs.

I think the volume and revenue potential for third-party app stores that need to be run on jailbroken iPhones is negligible:

• The vast majority of iPhone users don’t jailbreak and aren’t interested in jailbreaking.
• Jailbreak users are much more likely to pirate apps than non-jailbreak users. (Yes, there are honest jailbreakers. But piracy among non-jailbreakers is 0%, while piracy among jailbreakers approaches 75% by many estimates.) Pirating apps on a jailbroken phone is ridiculously easy.
• It’s easy to get people to pay for official App Store apps because their credit card and billing information are already set up and tied to their iTunes account. All you need to do is tap a button and type in your password. Any unofficial app store will need to convince people to enter their payment information separately, and they may not be as willing, motivated, or trusting. Meanwhile, pirating the same apps will be much easier.

(For the purposes of this post, assume that “iPhone” means “iPhone and iPod touch”.)