HTML5 and Incentives

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When Apple first released the iPhone, the only way to get apps on the phone was via the Web browser. It ran on the Web, (or from Apple) or it didn't run on the phone. In July 2008, Apple opened the App Store, allowing certified apps to run on the iPhone. Along the way, it took 30% of the sales price of the app, not a bad deal for everyone: the developer (many of them small) got better coverage, while Apple received a pretty hefty chunk of the sales price as commission.

In its FY2010 report, Apple said that it sold $4.1BN through the iTunes Store. While this includes music, movies and apps, the $912MM growth from the previous year is primarily due to the sale of apps for iPhone, iPod Touch and iPad. Clearly, selling apps is a major business - and a growth business - for Apple.

For a very long time, the way you had software was that you bought it from a store in a shrink-wrapped package, and installed it on your PC or Mac. Eventually, you would buy it online, download it, and install it. But soon, good enough, and eventually more than good enough, online versions appeared. While the desktop application business is hardly dead, in many areas, especially those involving collaboration with others or where data needs to be accessed from multiple locations/devices (i.e. collaboration with yourself), it is under threat from some form of online software or SaaS.

Which brings us to mobile apps. The big problem with mobile Web was always that devices flitted in and out of coverage. Not just the data became unavailable, but often the app itself. Older versions of the iPhone were notorious for forcing page refreshes, which made basic caching unusable.

Now, along comes HTML5. Along with Apple's beloved embedded video (which it is using to bludgeon Adobe's Flash to death - no complaints, Flash really is a hog), HTML5 includes a standard for offline data. Google Apps, which used proprietary Gears for a short period to provide offline functionality, has pulled Gears and is due to come out in the next few months with an HTML5-based offline version.

Here is where it gets interesting. Apple touts HTML5. Heavily. While full support is not that easy in Mobile Safari, it is at least partially there and will improve. At some point, app developers are going to realize this, and, like Google, write Web apps - which are a lot easier to write than iPhone native apps - that can stay functional, including data, when offline. This is going to start putting a kink in Apple's app store revenue, and, as we know, Apple is fiercely protective of anything it controls, especially if it leads to revenue, let alone real money.

In sum: Apple has a very strong financial incentive to torpedo full HTML5 offline support in the iPhone. If they will fight it, sabotage it, or accept it, anyone's guess.