Headline Feeds
Apple's (Nasdaq: AAPL) fight against underground iPhone applications is about to get a whole lot tougher.
A Santa Barbara, Calif.-based developer named Jay Freeman will soon launch a new Web site called the "Cydia Store" (pronounced suh-dee-uh) that sells iPhone apps not sanctioned by Apple.
In most cases, users will have to "jailbreak" their phones in order to run the apps. MacNewsWorld recently wrote about the ever-increasing number of jailbreak apps here.
Apple has made it clear that it sees jailbreaking as illegal. In a document filed with the U.S. Copyright Office, Apple outlined a number of technological measures it has taken to protect the iPhone from jailbreakers and their apps.
For his part, Freeman sees the Cydia Store as a means for providing iPhone owners with applications that Apple can't or won't put in the official App Store.
"Cydia is about innovation," he told MacNewsWorld. "The [iPhone App Store] is very limited in terms of what you're allowed to have there. You look at this beautiful device and all the features it could have, but you can't get them for a variety of reasons."
Jailbreak Apps Rise in Popularity
The Cydia Store isn't the only place on the Web where iPhone owners can go to obtain unsanctioned apps to trick out their phones.
Another startup called "Rock Your Phone" is getting close to launching a Web site. A search on Google (Nasdaq: GOOG) under the company's name brings up a search result that reads, "Rock Your Phone is almost ready! We are excited to open our 'doors,' but it will be a few more days. Thanks for Rocking with us!"
A click on the link reveals an invitation-only site that asks for a password to gain entrance.
Stores like Cydia and Rock Your Phone are the direct result of Apple's strict development standards and policies where the iPhone App Store in concerned, Freeman said.
"A lot of the rules Apple has in place for developers are so arbitrary, and that bothers a lot of them," he said. "Developers spend months building these applications and then Apple says no. Or worse, Apple simply ignores them and the developers can't get an answer at all."
The Cydia Store
Cydia has actually been in existence for more than a year, and more than 1 million unique iPhones access the service per week. Cydia has hundreds of unsanctioned iPhone apps and thousands of graphical applications that users can download to customize the way their phones look, Freeman said.
The new store will be up in about seven to 10 days. In a few weeks, Freeman will be ready to accept new underground iPhone apps from developers. Apple collects a 30 percent commission from sellers at the official App Store. Freeman, however, has not yet determined how the Cydia Store's revenue model will work.
"It may be similar to what Apple charges, but it definitely won't be more," he said.
The new Cydia Store is, in Freeman's words, "a minor modification to what came before. It's really just a simplified billing system" for underground iPhone apps.
When developers submit applications to Apple for the App Store, they go through a rigorous process by which Apple decides whether to include the proposed app in its marketplace. As of yet, Freeman has no such screening process in place, but he expects the Cydia Store will be inundated with "hundreds of apps early on."
Is Cydia a Threat?
Are underground movements like Cydia and Rock Your Phone a threat to Apple's thriving iPhone business?
"It's a distraction to the iPhone, not a threat," said Colin Gillis, director of research at TheStreet.com. "Apple still has the power of positioning. All of the messaging it's giving its users directs people to the App Store. Just like you can load up your iPod with music from other music stores, people still tend to gravitate to the iTunes store."
Apple can also play the fear card, Gillis told MacNewsWorld.
"There's the notion that these are renegade storefronts," he said. "You could be violating the warranty on your iPhone or downloading malicious content onto your phone. If you download a jailbreak app and it results in your iPhone working improperly, you can't exactly call Apple Customer Service and ask for their help."
Although Freeman hasn't heard anything from Apple regarding the Cydia Store, he clearly sees his efforts as threat to the App Store.
"If Apple continues to have a closed system for the iPhone, more and more people are going to go to underground stores, because the demand for applications is growing," he said.
Fittingly, Freeman named his store after the cydia moth, an insect that frequently wreaks havoc on fruit crops such as, well, apples.
Still, most users who download jailbreak apps tend to be so-called early adopters, the sort of people who enjoy technology for technology's sake, said Gillis, who doubts there is a great deal 
of demand for jailbreak apps.
"We're in the early adopter curve of the iPhone's lifecycle," he said. "These are the people who want to pimp their iPhones. The early adopters are trying to be technically savvy and want to push the product to its limits. They're the same people creating jailbreak apps."
Most casual smartphone owners, on the other hand, aren't of the same breed.
"How many features do you really use on any device?" he asked. "I have an 8-gig media card on my BlackBerry, but all I do with it is take a few photos here and there. As the casual buyer latches on to the iPhone, they simply aren't as interested in pushing the device to its technological limits."
Stock Snapshot
Apple's stock was at US$89.06 per share in late-day trading on Tuesday, up 0.8 percent compared to its closing price of $88.37 per share on March 3.
"I think the broad market rally and the chatter out of Asia about a new [Mac] netbook or tablet device being launched in the third quarter is what's driving the stock up," Brian Marshall, an equity analyst with Broadpoint Amtech, told MacNewsWorld.
Marshall's 12-month price target for Apple's stock is $110 per share.
Talkback: 
