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That assumes they'd make 70% as much when re-using those resources to build for other platforms.

If you make 30% less per customer selling on the iPhone, but you sell more than 50% more copies versus whatever else you'd do with that effort (Android, W7, RIM), it doesn't make sense to leave from a revenue standpoint. Android is great but I don't get the sense that many paid apps are doing volume there comparable to the Apple store.



I think what it really comes down to is profit margins. Over the years I've heard many times that a company with a 30% profit margin is a very profitable company. Apple is destroying any incentive for companies, operating at or below a 30% profit margin, to make their products available via the app store.

If a company is operating on a 30% profit margin, then apple is not taking away 30% of what that company is making off of that user, they are taking away 100% of what that company is making off of that user. At that point, the company is better off moving their developer resources towards creating additional functionality for other platforms to up sell current customers on.

You already have great services jumping ship like pandora and last.fm. I use pandora everyday, and if I can't get pandora on an iPhone, that is a purchase killer for me. These content providers are typically operating on a 10% profit margin, so I think they would actually lose money by servicing iphone users.

I do think development for the iPhone will continue for many of these companies for the time being, since as I understand it you can still install apps on the iPhone from outside the app store. But if this changes, I think many of them will cease to develop for it, since it would be economic suicide.

Please forgive me if I misused any eco terms above. After all Jim, I'm a programmer not an economist!




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