I have a suggestion for Apple (AAPL) that would allow them to increase sales from their existing infrastructure. Apple should allow Apps written for iPhone/iPod touch to run out of iTunes running on a Mac or PC. I would argue this is a natural extension of allowing iTunes users to play music or videos in iTunes on their Macs or Windows PCs. I estimate that at least half (probably more) of the current 150,000 iPhone/iPod Touch Apps would have value running on a Mac or a PC. iPhone/iPod Touch Apps have taken the world by storm and a great deal of creative effort in many application areas: Medicine, Music, Education, Sports, and Finance, has been directed towards writing apps for the iPhone/iPod Touch. Why allow all these important applications to run only on a mobile device? Obviously not all applications would be appropriate to run on a Mac or PC (apps that use GPS or analyze Pictures) but at least half the apps on the iTunes App store would have value running on a Mac or PC. Some Apps are bought directly to the mobile device and wouldn’t be candidates for this idea. A mobile device has limited screen display ability but many of these small apps have important functionality that would provide value on the Mac/PC environment with a large screen and keyboard capabilities.
So to get a feel for the kind of Apps that should be able to run out of iTunes let’s take a look at an Apple iTunes Store category that is near and dear to Seeking Alpha readers hearts, Finance applications. At this time there are close to 3,000 Finance applications for the iPhone. Some Finance applications are clearly mobile in nature, for example there are lot’s of apps that assume you are driving or walking around and they show you the nearest ATM machine. Other Apps are implicitly mobile. For example there are lots of restaurant Tip calculating apps that assume you are in a restaurant and want figure out what the tip is or how to split it. Then there are Apps where content experts in Finance have boiled down the critical components of important Finance functions and presented them on the small screen of the iPhone as Apps. To mention a few of the Finance areas that have iPhone Apps there is Accounting, Property Management, Currency Markets, Option Markets (several iPhone Apps do Black Scholes Option Pricing), Real Estate, and many more. These are the Apps where I feel Apple could make some money and offer Finance users more platforms if they allowed them to run directly out of iTunes. Some Apps compete with client based or web based apps like Portfolio Trackers. These developers might have written a Windows app or a Web app but chose the Apple platform because they thought they had the best chance of getting visibility for their App on the Apple platform.
Apple is closer to having the functionality to run Apps out of iTunes than most people think. As an iPhone App developer (you can see my Finance app in my Seeking Alpha Author profile) I know there is an iPhone Simulator that allows developers to test their apps that is fully functional and does everything that an App running on the iPhone does. When the iPhone Simulator runs, an image of the iPhone comes up and you operate it by replacing taps with mouse clicks and you can also use your Mac keyboard to do numeric or character input. The tech blogs have tips on running iPhone apps on a Mac that go as far as suggesting a non-technical user download the software that iPhone developers to write the application, painful for the average user. The iPhone Simulator runs only on Apple Mac machines, Apple would have to do some more work to make an App run out of a Windows based iTunes.
Allowing Apps to run out of iTunes would open up the App market to people who don’t want or can’t afford an Apple Mobile device. It could also be that people will tolerate larger numbers of Apps on their Mac/PC than they would on their mobile device. Would this iTunes App ability reduce the sales of iPhones or iPod Touches? Anyone who buys an iPhone wants the phone and data package so they will buy anyway. iPod Touch buyers are most likely to be buying for the Music and Video and very few of them would stop buying iPod touches because they can now run Apps elsewhere. Allowing Apps to run out of iTunes would give current customers more access to their Apps by allowing it to run in multiple places instead of just on the mobile.
This new Apple approach would address another issue I have written about in the past, the stale state of the software market for Macs and Windows PCs. When was the last time you heard of an exciting new Mac/PC application that was a game changer? Most of the innovation on the Mac/PC platform now comes from Freeware/Shareware and since it takes a programmer to write applications, most Freeware/Shareware is technically oriented, MySQL in the database space, Mozilla in the browser space, WS FTP in the data communications space. Something about the economics of writing applications for the Mac/Window PC has turned these platforms into a stale, slow changing exercise in boredom. Allowing Apps to run out of iTunes would return the excitement and innovation to what you can run on your Mac/Windows PC.
There are other players in the mobile App space. Google (GOOG) and Android have the 2nd largest App set of offerings for mobiles. Android apps tend to load directly to the mobile and Android doesn’t have a Google sponsored equivalent of iTunes. There are third party players in the Android repository space such Double Twist. I couldn’t find anyone with a Droid mobile and an Android client but I am guessing that a mobile Android App would run on either device. I am also pretty sure that a Droid App would not run on a Mac or Windows PC.
The gorilla in the room of Apps running on PC clients is Microsoft (MSFT). In fact, if Microsoft could offer customers the ability to run Apps on Microsoft mobiles and their PC platform, their huge installed based of Window clients would be a very appealing customer base for their mobile app developers. This approach could vault Microsoft from the back of the App market, where it is now, to the front.
The dream of the software world is to write a program once and have it run on any platform. With the advent of the iPad we get a glimpse of a world where all computing/communication devices are morphing towards a common platform. The genius of the Apple App store was that it re-invigorated the software market for the small software developer. If all these developers wanted to do was run their Apps for the broadest audience they would have written a small screen size App that ran on a Safari or Explorer browser. This web approach would have left all the marketing and publicity for their software as the responsibility of the developer. iPhone app developers chose the Apple iPhone platform because it was a chance to get their application exposure to the broad audience of Apple mobile device customers. Apple can assist its App Developers and build on the momentum of Apple App Store by allowing Apps to run on Macs/PCs out of iTunes.
Disclosure: The Author is long MSFT