Let's remember, too, that if keeping a platform closed was Steve Jobs' greatest blunder, it was also a part of his greatest success. The iPod is a closed platform: The device runs Apple's software, it connects to iTunes on your computer, and its music store sells songs that will work only on Apple's devices. In 2004, Microsoft tried to take on the iPod with a more open music strategy called PlaysForSure. (OK, relatively more open; PlaysForSure, like songs sold on iTunes, included a copy-protection scheme.) Microsoft set out to certify and license music players made by lots of different manufacturers, an attempt to fight Apple's music business the same way it had taken on Apple's computer business. But this time Microsoft failed—the iPod-iTunes link simply worked better than the tangle of PlaysForSure devices. Eventually Microsoft went Apple's way—it ditched PlaysForSure in favor of the Zune, for which it designs both the hardware and software.
Why did a closed platform hurt the Mac but not the iPod? In his book Inside Steve's Brain, Wired.com editor Leander Kahney argues that in the early PC market, flexibility was of paramount importance. Businesses were the early adopters of the computer world, and they wanted systems that were cheap and could run all kinds of programs. But those factors aren't as important in the consumer-electronics market; people like some measure of openness in their devices, but they also don't mind ceding control in return for security and convenience. The video-game industry proves this. No console is open—Microsoft and Sony approve every game that you can buy on your XBox or PS3. But most gamers don't mind that, because in return they're assured that games reach a certain minimum standard—you don't have to worry that Grand Theft Auto will trash your game system.
None of this is to say there's anything defensible about Apple's rejections of iPhone apps. It got rid of I Am Rich, a $1,000 program that did nothing, and Pull My Finger, a fart-joke app, for "limited utility"—which would be understandable if so many iPhone Apps weren't pretty limited. (How did Apple decide that a program that turns your phone into a flashlight is more useful than a program that turns your phone into a whoopee cushion?) Apple also rejected a comic book app called Murderdrome because its contents were too violent—even though it offers extremely violent movies in the iTunes Store. And it blocked an e-mail client because it competed with the iPhone's built-in e-mail app, a transparently anti-competitive move.
But there's no sign, yet, that any of these moves poses any harm to the iPhone's long-term prospects as an attractive platform for developers. Reports suggest that successful iPhone developers have made hundreds of thousands of dollars—which seems reason enough for them to labor under Apple's unpredictable policies. Apple seems to be pursuing a strategy of just-open-enough—permissive enough to keep programmers writing code and to keep customers buying software but still locked-down enough to let Apple control the platform's larger direction.
So far, Apple's restrictions on apps haven't turned off iPhone users, either. That may change if someone develops a killer app for Android that can't be replicated on the iPhone—Skype, for example, or a program to "tether" your phone to your laptop, letting you get online through your cell plan. But if users threaten to quit the iPhone because it lacks certain apps, you can bet that Jobs will find a way to respond. Over the years, he's shown a willingness to embrace openness when it has suited Apple's bottom line—the iPod, after all, works on Windows computers. Until that day comes, the iPhone will remain semi-open for business.