Can Apple's iPhone 'walled garden' continue to thrive?

About 10 percent of software applications turned down by Apple's App Store are "inappropriate," either because they will steal personal data, are meant to help users break the law, or contain "inappropriate content," an Apple senior executive reportedly said.

But in an interview with a leading business magazine, Apple's Phil Schiller ignored some big issues spurring iPhone developers to move to the Droid and other mobile platforms, and he didn't explain why Apple is acting as a software gatekeeper for mobile users.

Most applications submitted to the App Store are approved by Apple, according to Phil Schiller, Apple's senior VP for worldwide product marketing, as quoted in an interview with BusinessWeek.

In about 90 percent of cases where applications are sent back to the developer, Apple asks for technical fixes, generally for bugs in the software or because something doesn't work as anticipated, according to Schiller. Beyond the roughly 10 percent sent back because they're deemed "inappropriate," about 1 percent fall into areas which Apple hadn't foreseen, such as applications designed to help users cheat at gambling casinos, he said.

Schiller, though, did not address the applications that Apple has denied due to "duplicate functionality," and he did not give any inkling as to how developers -- many of whom are drifting or expanding to alternative platforms such as Android, Windows Mobile, and RIM Blackberry -- can get quicker insight into whether their software will make it into the App Store.

Just over a year ago, Apple rejected Angelo DiNardi's MailWranger application on the basis that it was too similar to the iPhone's built-in Mail app.

Apple used a similar argument of "duplicate functionality" in banning Alex Sokirynsky's Podcaster software application, and later in barring not just Google Voice but all Google Voice-enabled applications.

Apple has made several moves lately to help placate disgruntled developers. Earlier this month, the company instituted a new policy that lets the developer see when an app is "Ready for Review," "In Review," or "Ready for Sale," after confusion ensued over a 3G TV app first tossed out and then suddenly restored to the App Store.

But in his BusinessWeek interview, Schiller does not say how Apple might go further to give developers more advance notice about potential blockades to application approval.

Nor does he explain why Apple feels the need to behave as an arbiter of public morality and taste in the area of mobile software applications.

Apple still has the power to wield this kind of control due to the commanding lead it holds over other mobileplatforms in terms of numbers of applications in its online store.

But as other mobile phone environments begin to catch up to the iPhone, will Apple still be able to maintain a "walled garden" for mobile phone users, reminiscent of AOL's approach to the Internet in years gone by? That scenario is looking increasingly unlikely.