First, let me apologize for being MIA for the last few weeks. I’ve broken my hand and everything goes quite a bit slower. As a result, I don’t feel like typing (it’s a chore in a cast).

Second, I saw this from Matt Ball in my Twitterriffic feed and it got me thinking. The biggest problem with Open Source revenue is that you can’t sell a product. Most OS companies make money selling a service. However, once you give out the code to an application, there’s nothing preventing someone else from compiling and distributing your app for free. It’s difficult to sell software when you might only get paid for the first license.

The iPhone, however changes this a bit. Since you need a developer’s license just to install apps on your phone, it is highly implausible that the average user can just find a free download. They’d have to go through the App Store and purchase a copy. It is therefore possible to give away the entire source code without compromising sales. The only issue is if someone else was a registered and approved developer that compiled your source and put it on the App Store for free. That’s a lot more hassle than just compiling and posting a download link. There might also be a way to word a license to avoid free versions competing.

Could this be the next big model for open source shareware development?