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Apple Changing Developer Terms of iOS 4, Ineffective

With Apple launching the iAd patform, it has become obvious as to why the developer terms of iOS 4 was changed last month to exclude third party ad platforms compatibility from its apps. The previously supported ad networks such as Google AdMob, were supposed to become incompatible on iOS 4 apps. However the changes were not been made effective, thus iPhone and iPad apps modified with AdMob is still accepted.

Google AdMob

AdMob was acquired by Google back in May, in order to serve ads within mobile apps, specially within iPhone and iPad apps. However the latest changes in iOS 4 developer terms were not friendly towards non-independent ad networks such as AdMob. Perhaps Apple wants total control over how user data is accessed within their platforms.

The launch of Apples iAd

May be Apple had other plans while AdMob and such other third party ad networks are crippled within iPhone apps. The launch of iAd, a new ad platform from Apple themselves was scheduled right after the edition of the developer terms. Such a plan is not illegal in business neither are they uncommon. But when it comes to providing the best for both consumers and the developers, Apple had not lived up to the standards.

Developer terms

iOS 4 developer terms were adjusted so that non-independent ad providers such as AdMob were restricted of accessing user data, which in effect would cause AdMob to be incompatible with iPhone and iPad apps. However the terms were changed nothing seem to be put to work so far. AdMob integrated app developers have one less worry, at least for now.

AdMob’s complaint

AdMob has recently filed a complaint with the Federal Trade Commission, as a result of which the Trade Commission is keeping a close eye on the mobile business practices of Apple. Has AdMob done enough to actually delay the changes to the terms being put to work? May be, but for how long…

iOS 4 reverts back

Now the iOS 4 platforms and apps within operate as usual, just as they used to work before the changes. Nobody really knows why Apple has started accepting AdMob integrated apps again. Nevertheless its been a reality that just because Apple has control over iOS 4 operating system, it doesn’t mean Apple can restrict whatever they wish regardless of the consequences to consumers and the developers.

The important thing is that its as though nothing really changed in the iOS 4 developer terms, except actually there are nominal adjustments that are not being actioned upon. Since iPhone and iPad ad platforms are revenue generating points, Apple wanted to provide their newly launched iAd with maximum opportunity by eliminating or minimizing potential competitors. Only place where Apple made a mistake was to leave both consumers and developers out of the equation.

Google Sells Targeted Sales Campaign on iPhone

It appears that Apple Inc. is not barring Google Inc. and other companies and sites from selling their targeted ads in the iPhone and iPad applications. A few weeks ago, the company has implied that it will do just that. But, now, there is no evidence that they have. Many software developers are stating that their new and updated applications are getting approval from Apple even though the applications are permitted to serve ads by third-party ad networks like Google’s Mobile AdSense and AdMob.

Comments have been requested from both Apple and Google. However, none have come forward to address the issue on the ad services. The control system that Apple has long been attempting to implement on the mobile advertisements within its devices, such as the world’s most desired, like the famous iPhone as well as the iPad is at issue here. On Thursday, the Cupertino company from California released its own mobile advertising service called iAds. This works with brands to create interactive ads that will appear inside the applications. Apple is said to be asking for $1 million to $10 million from the marketers who make use of iAds, along with 60% of its income and revenue going to the developers.

But there have been some speculation about the intent of Apple to limit and prevent networks from competing with iAds. This happened around the time, in April to be exact, when the company changed its rules on how the development of applications in its App Store is governed.

The new set of rules which are part of a license agreement for Apple’s iOS 4 operating system designed for iPhone as well as iPad devices, have been interpreted to imply that the company will be prohibiting ad companies from collecting usage data from applications, therefore making it more difficult to target ads to users and thus compete with iAds.

Apple made a few concessions to the terms so that it can permit some independent networks for advertisements to collect user data so they can sell ads. These changes were said to be that which will bar Google from serving targeted ads in Apple’s App Store because there is an explicit statement that says that advertising service providers owned by a developer of mobile handheld devices like phones and PDA’s and their mobile operating systems do not qualify as independent. Apple still has not confirmed who it was referring to with the revealing statement but Google ended up publicly criticizing Apple over this amendment.

There are many apps, which include, “Super KO Boxing 2”, were approved of late so it can be used in iPhones and iPads. The app will then use Google’s AdSense to place its ads.

There is no apparent reason why Apple is not enforcing this rule. However, while the mobile-advertising marketplace is quickly growing, it has attracted the inspection of regulators from different federal antitrust companies, that apps with third-party ad services are still getting their approval into the App Store so the pressure on Apple could be alleviated.

The concept of Mobile advertising is very important for developers because they are getting paid for hosting the said ads. The revenue from the ads which were sold on mobile phones in the United States is anticipated to increase a whipping 43% to $593 million dollars in the year 2010.

As of this moment, advertising companies say that the iAds is responsible for creating more business rather than making the competition obsolete because they have generated so much interest in the realm of mobile advertising. Because of this, the opportunity can be taken advantage of by both the users and the developers.

Google and AdMob Criticize Apple Over its New iOS Terms of Service

In a recent bid of events, Apple has decided that it will ban third-parties from accessing data from its devices such as iPad, iPod Touch and iPhones. Such a decision, however, has brought in a lot of flak from AdMob and Google.

Apple has recently decided that only independent advertising service providers will be given access to data collection through iPod, iPhones etc. These independent advertising agencies will only be considered as independent when they are not affiliated to or associated with any of the other companies which develop or distribute mobile phones, operating systems or developmental environments. This move by Apple will ban most of the applications developed or run by other companies such as Google, AdMob, and Microsoft etc.

Google Expansion

Google had announced its decision to acquire AdMob in late 2009, while the acquisition took place for an amount of $750 million recently. Now as research estimates show, more than a quarter (30% +) of the yearly earnings by AdMob came from advertising through the Apple devices such as iPod, iPad and iPhones. The move by Apple, therefore, is sure to hit AdMob and Google alike. In such a scenario, AdMob’s founder, Omar Hamoui’s statements lashing Apple seem much understandable. According to Hamoui, creating artificial barriers such as the conditions set by Apple will surely hit the technological innovations happening within the industry. Apart from the innovations, even the users and developers will face problems in the long run. The users will have limited choices and options, hence depleting their overall experience of the product. Then again, advertising makes for the main source of funding the free and low cost applications. Banning third-party advertising will, therefore, affect the development of these applications as well. Then again, Hamoui insisted that Apple’s decision is merely a competition cutter aiming at the companies with competitive mobile operating environments like Google and companies whose main business focus is not mobile advertising.

Google’s Increased Market Share

The new decision by Apple came just after the announcement from Steve Jobs stating that the promotion of the new mobile advertising platform called as iAd. According to Jobs, with the launch of this new mobile advertising application, Apple will soon be reigning over at least 48% of the market share by the end of this year. Expected to be launched by July though, Jobs had at that time insisted that only those using the data collection in a wrong manner will be banned, while the devices will be open to the non-iAd networks.

The present terms now conclude that anyone wishing to use data collection and analyze using Apple devices will first have to get a written consent from the company. Furthermore, the companies will not be allowed to use analytics software to analyze and process the user or device data for third parties.

In response to the decision, AdMob has decided to express its concerns about the competitive curbs and harms of the decision on the overall industry to Apple.

Apple Bound for Anti-Trust Probe

Apple’s recent action to change the rules in its App Store prohibiting third party companies from collecting data from its iPhone applications and keeping Adobe and other software development companies from writing in its platforms is causing Apple to become an anti-trust target. These moves look like it is aimed to prevent advertising network from reporting to its buyers and will stop developers from working with Google and AdMob on its advertising.

Apple will likely be facing an investigation regarding the terms and conditions in it new mobile advertising network iAd. This new network was based on a technology that was acquired from Quattro Wireless this year.

The anti-trust probe will be led by the US Federal Trade Commission and will see if the new iAd terms and conditions are unfair to other competitors from targeting the iPhone and iPad in its advertising. Since Apple has become an industry leader, for an outsider it would look like they have been making deliberate moves like these which seem to challenge and provoke the authorities just to see how far they can reasonably go.

IBM, Microsoft, and Intel are some companies that have faced anti-trust actions before. Usually, these companies infringe on their competitors. For example, Microsoft was one serial infringer who repeatedly places conditions on their distributors and OEMs shutting out their rivals like Real Networks and Sun.

There are some costs that may incur because of these probes. The first one comes from fines from a competition authority like the Competition Commission in Europe and is fairly minimal. Since the US competition commission rarely acts, the fines have to be paid in Europe. This is usually because the US corporate mid collectively prefer monopoly because of investor benefits on consistent dividends.

Another cost imposed is behavioural change. Ani-trust authorities get benefits from their customers making sure that these big companies cannot dictate the pricing in the market nor impose technical standards that are unfair and inappropriate. Once this is changed, exclusivity clauses in contracts or having open and stable terms that will give competitors a fair chance will get the regulators out of the picture. This slows the regulators down but does not stop them completely.

The third cost is the one that causes a standstill to the monopoly. The self-imposed “do no more anti-trust” edicts run throughout a company after having been charged with a major fine. The theory was that the company would benefit more if it avoided these anti-trust probes so these internal business practices and any element of them were crushed and ignored.

With this, it is not very likely for Apple to be bound for a formal anti-trust probe since it is not really dominant enough. Apple may have seventy percent of the online music market but it is quite an overstatement since that figure does not include all the music subscription revenue.

Its App Store is also not that dominant yet since it is a new idea and that market has not settled down yet. In terms of market dominance, Apple does not sell more phones than the other brands and Google proves that with its string of around 30 Android phones with more coming on the way.

Apple to be Investigated by FTC

With the intention of harming its competitors in the mobile software market, Apple is illegitimately using its position. In a major report that has been published in the recent journals, the Federal Trade Commission (FTC) has started a probe against Apple. It will clearly find whether Apple has taken App Store as its weapon to hurt its competitors.

Apple’s Malpratice

Apple has made a sharp twist in its Apple Store Rules. Few of the developer tools which are used to create applications in iPad and iPhone has been prohibited by Apple. Now Google’s AdMob and other dependent mobile ad networks have been blocked from accessing applications on the iPhone. While Apple was asked about this, it has not straight away respond to it. By changing the tools that are being employed to write apps sold in App Store, it seems that this time Adobe is its specific targeter. Now the developers are unable to use other platforms like Novell’s Monotouch and Adobe’s Flash platform.

Developers who are sharing their data with mobile operating system or an advertising service provider other than Apple have been banned by Apple. Admob which is owned by Google is the most high-flying mobile- advertising service provider affected by this. But Google is using Android platform to create a better place in the mobile software market.

Controversial Trends of Apple

This is not the first time that Apple has caused a controversy. It has been functioning always in the path of controversy. It created an iTunes Store monopoly for iPod and iPhone and thus blocked them into iTunes. Apple’s FairPlay DRM System has not been licensed with any other company. Hence it prevents the other manufacturer’s devices to use the contents purchased from iTunes. But competing company’s DRM free music can be heard on Apple devices.

In Europe the customers can purchase goods from any of its state. But Apple is forcing the customers to buy iTunes only. It forced the users in some countries to spend more money by restricting the content purchases to their country. It disables Google Voice Application on iPhone. It has given an explanation that the functionality of iPhone has been altered by Google application. Within two months after the release of iPhone, it reduced its price by $200 and it was criticized by everyone.

The Federal Trade Commission (FTC) which was set up by the Federal Trade Commission Act in 1914 is an self-governing agency of the United States Government. “Consumer Protection” is its motto. It helps to eliminate and prevent harmful business practices that are anti-competitive. FTC is able to achieve this by some merger plans, non-merger plans that may mess up the competition and enforcing antitrust laws. The civil enforcement of antitrust laws is handled by FTC.

When Google purchased AdMob, FTC examined them for several months. Hence being familiar with the mobile ad market, it has now got the job of investigating Apple. Thus FTC investigation is the most up-to-date in a sequence of explorations into Apple’s business practices.

Google says the deal is closed

Google has no plans of going ahead with its deal of the AdMob acquisition. This has come as a surprise for lots of people as it has been just three days since FTC (Federal Trade Commission) gave a green signal to the seven hundred and fifty million dollar deal. People came to know about this when the Vice president of Product Management of Google, Susan Wojcicki, came out with the decision on the official blog of Google. The blog said that Google was more interested in integrating the portion of AdMob with the advertising unit of Google as soon as possible. The people of the top management at Google are making use of the time given to them by FTC in this regard.

Google is now more interested in creating newer products for its customers and they want to offer their current services in the best possible manner to its public. They want the upgrading and integration to happen as soon as possible and have also promised that they would keep their followers and customers up to date about the recent change of events taking place.

Google is also paying special attention to the mobile advertising space. This is mainly because business rival Apple is getting into some unfamiliar territory and is succeeding in getting hold of some prestigious clients which once belonged to Google.

Google has plans of repurchasing the shares of AdMob which would be issued by them in the open market. This repurchase activity is expected to begin as soon as the acquisition is over. The money for the repurchases would be available from the working capital already present with Google.

If you have a look at the letter given out by Omar Hamoui on behalf of AdMob, it clearly states that the acquisition deal is closed and that the two companies would be working together as one unit in the future. Even though AdMob is very happy to be working with Google, there are certain things that they have made very clear to the general public. They have stated that their topmost priorities are their advertisers and publishing partners and that they are committed to delivering a smooth integration process to their valued clients.

Speaking to their publishers and advertising partners, AdMob has stated that their employees and staff would give their best efforts for ensuring the satisfaction of the clients. The staff includes the sales, marketing, engineering, product and business development teams. As far as the smooth integration process is concerned, they are committed to provide better service and products to their customers in collaboration with Google. The integration process has some things that need to be taken care of, hence it might take some time before everything is sorted out. Till then the company has given assurance that their usual business would be carried out with the same effect and efficiency as it was done before. They have also promised to keep the general public posted about things that will happen in the days to come.

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