I know I shouldn't bite considering this is one of El Reg's poorer efforts at trying to sensationalise a non-issue, but I just can't help myself.
Before the iPhone App Store, mobile developers had to pay sites like Handango or individual cell provider portals anywhere from 40% to 70% for the privilege of being listed (Microsoft charged Windows Mobile developers almost $500 and 50% of sales for example). However, in many cases, the developer had to handle the credit card transaction fees themselves, often the web hosting fees, security certificate signing ($1,000 per app in some cases) and advertising etc. In the end, very few consumers actually used these sites (it was all too hard and unfriendly – ever tried going through the hoops to download and install an app on a Windows Mobile phone?) and developers had to charge large prices to try and get enough income to make it all worthwhile.
Once their apps were made available, because of the high costs, their apps would often instantly be pirated.
Then there were the problems of having to target thousands of different hardware models and even OSes (Symbian is fragmented into 3 different and incompatible systems for example) and usually end up writing for the lowest common denominator (this is going to be a problem with Android as well).
With the App Store, Apple covers all costs: web hosting, credit card transaction fees, there is no need to spend $10,000 or more setting up with VISA or similar, and Apple’s built-in Fairplay DRM and decent pricing model means their software is just not pirated.
Customers get far cheaper prices than any other mobile app store, are protected from malware, can install each purchased app on up to 5 Macs or PCs (so no need to pirate copies for family members), and developers are making a killing. If a developer wants to put their app up for free and make money on advertising or through other means Apple charges zero, zip, nada, nothing (doesn’t sound like the Mafia to me?).
Because of all these advantages for both developers and customers, both are flocking to the store. App Store purchases over the first 1 month:
$30 million spread over 60 million downloads.
Extrapolate that out to the 200 million apps Apple says were downloaded by Oct 8, we're looking at $100 million dollars income, $70 million of which is going to developers. Not bad for the first 3 months of the App Store's existence.
Apple was experiencing about one million dollars worth of App Store purchases per day during the first month and that figure is of course just growing with more and more iPhone (and iPod Touch) owners coming on board every day.
As a result, Apple has wiped all other mobile app stores off the map as in a whole year the competition combined only managed 150 million downloads.
So I’m sorry, the iTunes App Store is not the Mafia – it is more akin to Robin Hood, robbing from the rich (cell provider walled gardens and Microsoft) and giving to the poor (developers and consumers).