Cracked iPhone Apps – The Hacked App Store

A few of us have discovered Installous, a program that will let you download and install iPhone ipa’s, without iTunes. Yes, paid apps can be downloaded independent of the AppStore, and absent of making a purchase, aka free or stealing (whichever you prefer).

I’ve read a few blog posts discussing the morality of such a tool, some are spreading the message, motivating crackers, and feeding the community. While others are vehemently against such activity. Personally, my morals lay somewhere in the middle. I have no problem testing the software, and paying for what I like. If you look at my receipts from the App Store, the proof is in the pudding. I pay for Apps.

Disclaimer: This is not a blog post intending on promoting Installous, or stolen apps. Nor a tutorial on how to do such a thing. This is meant to help developers build uncrackable apps, and discuss various ways to commercialize the iPhone Apps.

In order for the iPhone Apps to prosper, the App creators need to get paid. And right now they’re not! For two reasons:
(1) Apple Takes 30%
(2) Apps are being ‘traded’ via Installous
If you are an app creator, you need to face these two harsh facts before building your next app.

There has been research on the matter, here are some forum posts dedicated to building uncrackable apps. But, the problem can’t be solved through code alone. I think App creators need to think of other ways to monetize their apps, beyond install fees.

If you look at most of the Jailbroken Apps, they monetize through ad revenue, because they can’t charge an install fee. There isn’t an App Store for these type of Apps yet, so they’ve been forced to get creative if they want to make money. Ad placement in the app is just one way to make some revenue, another is through selling App to a big brand.

One of my favorite apps that was just released by Oakley is the Surf Report App. Every time I check the surf report, I am starring at Oakley’s logo (and messaging) for at least 5 seconds. Which is at least once a day. This type of brand exposure means nothing for Joe App Developer, but is everything to Oakley. So Joe, go build a kick ass App, and go sell it to the brand that makes the most sense.

Big brands want real estate on your iPhone, but they don’t know how to get it. They are willing to pay big bucks if you succeed at it before them. Oakley was smart, but others won’t have the foresight Oakley did. You might even find companies to sponsor your apps for 6 months. Lease your app to them. There is no reason Gary Vaynerchuck wouldn’t buy an ad on your Wine App for WineLibraryTV. Think about it…

My prediction for 2009, Koi Pond won’t be the top paid entrainment app next year. Koi Pond will be free, and sponsored by Home Depot, or better yet Pondepot.com.

It would be really cool to localize your Apps by city and match advertisers by geographic location. For example, Koi Pond could brand their App to everyone in San Diego with Sponsored by “SanDiegoPonds.com”. Therefore, they could find an ad partner on a city specific basis.

In addition to monetizing through ads and brands, I think we will see more web integrated applications like Evernote. Where the app itself is free, but it is tied to service that charges. Mint is another good example of an iPhone paired with a web service. This significantly lowers the risk that the application will be compromised and gets you out of the App store revenue model.

Free apps are the future. Mobile advertising is going to explode as a result. Web services with iPhone apps will also experience growth. But the pay to play Apps, with install fees, are going be a thing of the past. In part due to Installous, but also driven by consumer demand.