MocoNews asks the question if Apple, with their new iPhone application model, is “tearing down the walled garden or putting up a new fence?“

This is a great question, but it think it distracts the reader from the most critical issue facing mobile developers today — “how do I pay the bills?”

Let me digress a bit.

There are fundamentally four different mobile application developers today: the hobbyist, the mobile developer, the Internet developer, and the enterprise developer.

Hobbyists are in it for the “fun”. Making money is nice, but they are most interested in exploring, experimenting, and building credentials in the community. The enterprise developer is building a solution that is a means to an end, but not the end in itself. Cost and complexity are certainly and issue, but making money directly off the mobile solution is not. The Internet developer (i.e., Yahoo, Google, Amazon, etc.) look at mobile as an extension of their Internet strategy. Assuming that they are making money on the Internet, they look at mobile as a place to stake their territory and likely a loss leader for future business opportunities.

In contrast, the mobile developer needs to make money on mobile. And more specifically, they need create a sustainable business which translates into profitability.

As such, developers need distribution (a way for customers to discover and get the product they are selling), a way to monetize the product, and a technical and business solution in which the cost of doing business is less than the revenue it derives.

I think Apple is doing developers a great favor. Based on what I have seen in other markets, a 70% revenue share to the developer appears to be what it takes to create a sustainable business. Apple is doing splendid in keeping fragmentation to a minimum (both storefront, handset, and network), which bodes well to reducing costs. Apple is transparently handling transactions (in contrast to asking for a credit card for each transaction) using a mechanism well understood by their customers.

Where operator walled gardens have failed is that they don’t make it easy for developers to make money, much less a sustainable business. Discovery on a WAP portal is impossible if you are “below the fold”.  To get above the fold, developers typically have to address 80% of the platforms supported by the operator.  iTunes has dozens of “search” type features.  For off-portal applications, most operators don’t support carrier-based billing.  To do premium SMS, you have to split a nickel with a half dozen partners.  To handle credit cards you have to add an impenetrably hard user experience for a mobile phone.

So I applaud Apple’s direction and look forward to the business and businesses they enable.