Opera's Bid to Become an iPhone Browser

Apple's willingness to let competing Web browsers onto the iPhone will soon be put to the test. Norwegian software maker Opera (OPERA:NO) said on Feb. 10 that it has created a version of its mobile browser that works with Apple handsets and that it would soon try to get a green light from Apple to put the browser on the iPhone and iPod touch.

Apple's response will be closely watched by customers and competitors. A "yes" from Cupertino (Calif.)-based Apple (AAPL) would open the door for other software makers to try to get their browsers on the popular smartphone, which now features only versions of Apple's Safari. Some rivals might view rejection as an attempt to squelch competition. "One way to look at the decision is: Are they offering people a miniature computer or a few features on a device?" says Wendy Seltzer, a fellow with the Silicon Flatirons Center for Law, Technology & Entrepreneurship at the University of Colorado. "Will they be opening up all of the possibilities that users can imagine for it or locking a subset of functionalities and limiting what people can do with it?"

Executives at Opera will demonstrate their product, Opera Mini for iPhone, at a mobile industry conference in Barcelona beginning on Feb. 15. They say they've taken steps to ensure that the application meets App Store standards on quality, safety, looks, and other criteria. Yet Apple may have grounds for rejecting the app because it replicates or otherwise competes with Safari, already on the iPhone. "It's a coin flip whether the company accepts or rejects it," says Charlie Wolf, an analyst at Needham & Company.

Apple spokeswoman Trudy Muller declined to comment on Opera's browser, which has yet to be submitted for approval. The company allows other browsers, such as Bolt, into the App Store if they adhere to a software code called WebKit, which also underlies Safari. That requirement has kept browsers such as Mozilla's Firefox off the device.

App Store Inaction over Google Voice

Developers have been turned down for other applications, including a book-reading app that Apple said contained "inappropriate sexual content" from the Kama Sutra; an app that lists telephone numbers for members of Congress because it contained "offensive" caricatures of House Speaker Nancy Pelosi (D-Calif.) and others; and a podcast-managing app, which broke rules against downloading podcast files to phones.

Apple has refrained from approving Google Voice, an application that lets users be reached on multiple calling devices with a single number, because it might interfere with, or replace, certain features on the iPhone. The Federal Communications Commission opened an inquiry into the matter in July. Critics have said that Apple dawdled because it doesn't want a competing voice-calling service on the iPhone. The application is still unavailable on the iPhone, although a version can be accessed through the iPhone's browser.

Browsers serve as the main gateway from a computing device onto the Web. In the 1990s, Microsoft (MSFT) was accused of anticompetitive behavior by the U.S. Justice Dept., which said Microsoft harmed rivals such as Netscape by bundling its Internet Explorer browser with the Windows operating system.

In 2007, Opera complained to European regulators about Microsoft's bundling efforts. After Opera's complaint received support from Mozilla and Google (GOOG)—which makes the Chrome browser—EU regulators began an investigation and urged compromise. Microsoft has since agreed to include a so-called ballot screen that gives users a choice among browsers.

Opera: No. 2 mobile browser, at 25.5%

The antitrust implications if Apple were to reject Opera's application are less clear. Regulators at the Justice Dept. or Federal Trade Commission may ask about the reasoning behind such a decision, says David Balto, a former policy director for the FTC and a senior fellow at the Center for American Progress, a Washington think tank. "It would be the kind of thing the Justice Dept. and the FTC would want to look at," Balto says. FTC spokesman Mitchell Katz declined to comment, as did Justice Dept. spokeswoman Laura Sweeney.

Building an anticompetitive case wouldn't be easy, legal experts say. Regulators would have to prove that Apple has a monopoly in a market and that it's using that position to thwart competition. There's a slew of competition in smartphones and the iPhone isn't considered its own market. Customers with a strong preference for Opera's browser could find a version of it on other handsets; the company counts more than 50 million users of its mobile browsers and serves 25.5% of the mobile-browser market, according to data tracker StatCounter. Apple's browser leads the pack with 34.4% of the market. Nokia browsers make up 11.7%, while Research In Motion's BlackBerry has 10.1%.

Mobile devices also aren't held to the same legal standards as computers because they have more limited capabilities, says Michael Gartenberg, vice-president of strategy and analysis at tech research firm Interpret. "Phones are not desktops and I don't think you're going to see the same issues regarding browser choice on phones," he says.

Opera expects its application to get approved and hasn't made contingency plans in the event of rejection, says Opera spokesman Ted Miller. "There's really not much we can do," he says. "There's obviously a chance some regulatory bodies may get involved."

Google and Microsoft: disinterested?

Other browser makers may be encouraged by an acceptance. "As we've seen with Web browsers on the PC, choice leads to competition and innovation, and that's good for everybody," says Jay Sullivan, vice-president of mobile at Mozilla. Mozilla has not developed Firefox for Apple's handsets because "of constraints with the [operating system] environment and distribution," Sullivan says. The company is giving the iPhone some thought, Sullivan says.

Google spokesman Eitan Bencuya says of his company's Chrome browser: "We're really focused on the desktop." Sarah Keeling, a spokeswoman for Microsoft at Waggener Edstrom says Microsoft has no plans to create an Internet Explorer application for the iPhone.

At the Mobile World Congress in Barcelona, Opera will use an unofficial, or "jailbroken" iPhone, to try to convince show-goers that its Opera Mini browser runs faster than Safari because it load Web pages with computing power from remote servers, rather than a phone's hardware. New features such as "speed dial"—a way to navigate quickly between favorite Web sites—will help Opera stand out to people who are accustomed to Apple's Safari, says Christen Krogh, Opera's chief development officer. "We are really genuine about this," Krogh says. "We are in the business of giving people access to the Web."

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