At the end of February, a friend of mine wanted to update his old BlackBerry. I urged him to consider Android. He chose the iPhone. When I asked why, his response was “it’s all about the apps at this point”.

Clearly, Apple’s biggest advantage with the iPhone is the App Store. Without a doubt, it attracts people.

Well, about a month ago, MG Siegler over at TechCrunch wrote an interesting piece entitled “The iPhone’s Peephole“. She wrote it in response to Apple’s new policy toward sexy apps in the App Store. Apple decided it was time to rid the App Store of so-called suggestive apps without providing any warning or notice to developers. Developers of those apps were miffed, and helpless.

Her underlying premise was that with the progress of HTML5, web apps have become viable – in some cases better than their desktop cousins, and that developers could avoid Apple’s whimsical and subjective App Store policies by designing in HTML5 for the mobile web. It got me thinking that Apple could eventually kill the App Store as developers frustrated over Apple’s App Store policies move their developments to web apps.

Fortunately for Apple, the lure of quick cash from the App Store is strong, and developers continue to develop for the iPhone. I almost forgot about the issue until Apple’s iPhone OS 4 announcement yesterday.

Overshadowed by the iPhone OS 4 accouncement is a statement Apple buried in the iPhone OS 4 developer’s agreement that prohibits you from developing apps “that link to documented APIs through an intermediary translation or compatibility layer or tool….” (more in-depth analyses can be found Engadget and TechCrunch).

A number of vendors, most notably Adobe, have developed tools to help developers build apps for multiple platforms: iPhone, Android, WebOS, etc. With this simple statement, Apple is effectively squashing these avenues that make it easier for developers to port their work across multiple platforms.

I expect this latest policy change to drive more developers to open platforms and web apps. As more and more people develop in HTML5, the apps will progress and get better. As more web apps become available,Apple’s advantage with the App Store will wane. In other words, is Apple slowly killing the biggest advantage they have over other mobile platforms today – their App Store?

My take is that the siren song of the App Store is still too strong, at least today. There are just too many iPhone users who are willing to pony up cash for apps. Developers would be foolish to walk away.

However, as Apple continues to strengthen its hold over the App Store and slowly suffocate its golden goose with more restrictive development policies, developers will walk. There have already been defections of high profile developers. And now that there are better mobile hardware options available, Apple could be heading toward repeating the same mistakes they made with the MacIntosh product line 25 years ago. It’s amazing how history repeats itself and how we are doomed to repeat our same mistakes….