As problems go, Apple's (AAPL) are the kind most companies would kill for. One is particularly fascinating: Having established the most vibrant computing platform of the 21st century, Apple's iOS app developers are finding themselves in serious competition with strategic opponents, who are duplicating some of the most essential parts of the iPhone. It's something Apple tried to prohibit before the federal government forced it to back down.
Last week Facebook (FB) and Amazon (AMZN) each revealed new apps and features for iOS: free voice calls from Facebook Messenger (U.S. only), and Amazon's MP3 store for songs and videos.
On one hand, the apps stand as ringing validation for Apple: These companies need iOS and the reach of the iPhone or iPad to reach millions of their own customers. But Messenger isn't Angry Birds or Snapchat or Evernote. These apps aren't one-offs from small teams of developers. Along with Google's (GOOG) trove of well-received productivity, navigation, search, and browser apps for iOS, they show that Apple's competitors are getting really good at finding ways to systematically insert themselves between Apple and its customers.
Facebook is not making its own phone (for now). Why should it when Apple's phone, already in millions of hands, will do just fine? With the Facebook app for iOS and its cousin apps such as Instagram and Messenger, Mark Zuckerberg and company clearly want to be the communication and social layer on the iPhone. Facebook has a decent chance of doing this because it offers iPhone users more than Apple's stock Messages, Phone, and Camera apps do.
Google, on the other hand, has its own devices. Yet the company looks to be aiming to own productivity and search on the iPhone with Mail, Drive, Chrome, Search, and more. Google has had iOS versions of these apps for a while, but only recently has it buckled down to drastically improve its design and user interfaces.
Meanwhile, Amazon is coming after Apple on hardware—offering its own tablets and potentially a phone—but it also wants to bring its digital content empire directly to Apple's iTunes customers via the iPhone, iPod, and iPad.
It is good business sense for Apple to encourage and cultivate an App Store with these kinds of offerings—it's been Apple's style since the days of the early Macintosh. Plus, the App Store model allows Apple to act as gatekeeper, and it lets the company take 30 percent from any sales of or from within paid apps.
But in at least one case, we know Apple is uncomfortable with this model: Late last year, Apple executives were reported to be "seething" over iOS users' delirious response to the revamped and re-released Google Maps for iOS while Apple's Maps app was widely mocked. So it's easy to imagine that what Facebook, Google, and Amazon are up to makes Apple Chief Executive Officer Tim Cook squirm a bit, too: Apple may still make the best product, but strategic competitors are starting to form deep relationships with iPhone users on the iPhone itself.
There's probably little that Apple can do about this. One of the most formative periods in the App Store's history was the summer of 2009. Apple had been enforcing a policy in which third-party apps that mimicked the "core functionality" of its massively successful iPhone wouldn't make it past the App Store gatekeepers. That worked until a really big fish got caught in this net: Google Voice.
The aftermath of that situation—a Federal Communications Commission inquiry led to Apple (and its partner AT&T (T)) backing down, letting Google Voice onto iOS, and being way more clear about App Store rules—is a good way to understand why Apple pretty much has to allow its biggest, most avid competitors onto its platform: If it doesn't, it risks inviting further federal scrutiny.
Facebook calling, Amazon music sales, and Google Maps wouldn't concern Apple much if its own core iPhone apps for talking, texting, calling, taking photos, mapping, addresses, calendaring, purchasing music, and more were better than what its competitors are offering. But as the iOS platform matures, it's evident that Apple is beginning to slip.
In the early days of the iPhone, Apple set the tone for the best design and best user interfaces and pushed the envelope for what the iPhone could do: Safari, Photos, Siri, and iTunes were just the leading examples of what the best mobile developers should hope to accomplish. Did Apple simply take its eye off the ball? Did the iOS team get distracted and let the competition catch up? Will Scott Forstall's absence make way for better core iOS apps to emerge—or re-emerge?
Apple is a mobile hardware and software company, and this dual strategy is what helps it reap the greatest profits in the mobile industry. But without keeping others from making gains into core parts of that hardware-and-software mix, it faces a near-term future in which the most important apps on the iPhone are not made by Apple.
It's pretty difficult to imagine that this is what Apple had in mind when it created the iPhone and App Store strategy: that the iPhone would eventually become a host piece of hardware for Google's apps or Facebook's social tools.
One of the things to watch for this year, as Jony Ive takes over the Human Interface department and future versions of iOS, is whether he can compete head-on with world-class mobile-development teams—especially those at its biggest rivals—and restore Apple's ability to make the best core iPhone apps.
Also from GigaOM:
Apple Won't Lose Any Sleep Over Amazon's New MP3 Store (subscription required)
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