Apple's well-documented control over the iPhone and apps took a major blow this week when the U.S. Library of Congress ruled that people who "jailbreak" phones to add non-Apple approved apps should be exempt from prosecution.
It's unlikely, say analysts, that the ruling will lead to more iPhone jailbreakers. However, the ruling might spur rogue app developers to ply their trade with even greater fervor, perhaps leading to a legal "red-light" app store.
For CIOs dealing with employees who bring their iPhones to work, many companies already have policies against jailbreaking so there won't be much of an impact. "The iPhone was never a loved device by IT organizations because Apple never embraced them," says analyst Rob Enderle of the Enderle Group, adding, "I'm not seeing this ruling as an additional problem, just more noise."
Enderle estimates that less than 4 percent of iPhone owners jailbreak their phones. The ruling won't lead to more jailbreakers, he says, because the notion of breaking the law wasn't a big deterrent to anyway. Most people don't jailbreak their iPhone because it's technically not easy to do.
Also, jailbreaking voids the Apple warranty. Even with this week's ruling, "Apple can still void the warranty and can still reverse the jailbreak with new software releases," says Gartner analyst Van Baker. "It ever so slightly loosens Apple's grip, but for the vast majority of consumers there is no impact whatsoever."
On the other hand, the ruling could open the floodgates to a third-party app store serving up, say, pornographic apps, says Enderle. Apple recently cracked down on sexy apps in the App Store. (See " Was Apple's Bikini Ban Too Reactionary?")
Baker and Enderle agree that non-Apple approved apps are at higher risk of containing malware, perhaps more unreliable or maybe just nonsense apps that diminish the image of the iPhone. "It was junk that killed the old Atari game platform," Enderle says.
Of course, there are worthwhile productivity apps that only run on jailbroken iPhones, such as Adblock that blocks ads in Mobile Safari and Voicemail Forwarder. Many of these outlaw apps offered features before iOS 4 came out with them last month, such as folders, multitasking and backgrounder.
Another reason to jailbreak the iPhone is to connect it to a wireless carrier other than AT&T, says Enderle, speaking on jailbroken phone. Although he warns that a jailbroken iPhone won't run on CDMA-based Sprint or Verizon networks. While it can run on T-Mobile, he says, "data rates are going to slow down quite a bit."
The biggest impact of this week's ruling will be felt by Apple itself. "Apple maintains high level of quality largely through absolute control, and their control is being torpedoed," Enderle says.
Read more about consumer in CIO's Consumer Drilldown.