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Apple Senior VP of Marketing, Phil Schiller, was quoted by the New York Times in an article on the removal of 5000 sex-based app from the iTunes App Store:

“It came to the point where we were getting customer complaints from women who found the content getting too degrading and objectionable, as well as parents who were upset with what their kids were able to see.”

To developers who weren't afforded any warning or options to pre-emptively make changes where such changes would have been possible:

“We obviously care about developers, but in the end have to put the needs of the kids and parents first.”

As to why Sports Illustrated's Swimsuit app, the Playboy app, and a few other publication-associated apps were allowed to remain:

“The difference is this is a well-known company with previously published material available broadly in a well-accepted format.”

Key take aways:

  1. Apple's App Store ratings system doesn't work, since Apple classifies anything with unfettered web access as 17+, parents can't block sex-based apps without blocking Twitter apps, Wikipedia, and countless other non-sex-based apps. Apple needs to redo the ratings system and allow more granular parental control. (Though Safari again shows the ridiculousness of most ratings systems -- anyone and everyone can and will find anything and everything in the ratings-free web).
  2. This move seems entirely perception-based. Apple likely doesn't believe people will complain about established corporate content like Sports Illustrated [Free/in-app purchase - iTunes link], FHM [$1.99 - iTunes link], and Playboy [$0.99 - iTunes link] where they will about the indie guy who floods the App Store with 3000 variants of the same underwear and swimsuit pics. (Or if someone does complain about SI, Apple can point to its mainstream profile as an easy out).
  3. Since Apple has shown no signs of wanting to get out in front of these issues and give developers warning before taking major action in the App Store, developers have to come to terms with the reality that making any application that comes anywhere near a) areas Apple may consider their own or b) areas where Apple may consider their brand/image at stake, means constant uncertainty and the risk of being removed at any point. Or they have to consider other platforms and give Apple feedback that way.

Stick to safe, friendly games and helpful utilities and you should be find. Push any boundaries corporate or familial and you could be gone. Which is kind of sad, because Apple seems like the one company who could champion as much creativity, innovation, and boundary-pushing in the App Store as they do in their technology.