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Chapter 6

Most carriers will void the warranty on a phone if they find a user has modified the
operating system in any way, although some users with technical skills do so. Modifying
an Apple iPhone’s operating system is called jailbreaking the phone. Modifying an Android
operating system is called rooting the phone.

Mobile Apps
In the past, each phone manufacturer wrote its own operating system software. Today,
most mobile phones use a common operating system (such as Android and iOS). This
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change occurred because the way software applications are developed and sold has
changed. In the past, U.S. mobile phone companies generated revenue by controlling the
application software (usually called apps) that could run on their phones. Companies
would license the apps from software developers and then charge subscribers a monthly
usage fee for each app. Apple turned this revenue strategy on its head when AT&T agreed
to be Apple’s sole carrier for the iPhone (that is, iPhones would only operate on the AT&T
network, an arrangement that lasted from the iPhone’s introduction to 2011) and agreed
to allow Apple to sell apps for the phone directly.
The Apple App Store was launched at the same time as the iPhone itself and became
an instant success, making a wide variety of software available for the phone and later,
for Apple’s iPad tablet devices. Users of Android phones, phablets, and tablets can buy
apps in a similar online store, Google Play, which offers software for that platform. Both
Apple and Google allow independent software developers to create apps and sell them (on
a revenue-sharing basis) through their respective stores. These developers found they
could make thousands, even millions of dollars for their creations. Zynga, a company that
creates game apps for mobile phones, generates more than $1 billion in revenues each
year selling its game apps for phones. Other firms, such as Mutual Mobile, provide software
design and development services for companies that want apps to use in their own
organizations.
A number of apps do nothing more than provide a quick gateway to a company’s
Web site. Many online shopping destinations offer free apps that are optimized to
provide users the best possible shopping experience on the small screen of a
smartphone. Other apps are sold for a fee. Games, puzzles, productivity tools (such as
contact managers, calendars, and task organizers), and reference works generally fall
into this category. Most apps sell for $1 to $5, although prices can vary considerably.
Newspaper, magazine, and media sites sometimes offer free access to their online
content through apps (especially to their print subscribers); others sell subscriptions
that can be accessed through their apps.
Some mobile app sellers include an advertising element in their revenue models.
These apps include mobile ads that display messages from advertisers (other than the
seller of the app). One common way to include ads is to display them in a small bar at the
bottom of the app screen. Some apps include advertising that appears on a part of the
screen or as a separate screen that must be clicked through to get to the app. The
advertising space on mobile apps is sold in the same way that banner advertising on Web
sites is sold (which you learned about in Chapter 4).

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