What the article fails to delve into in any great detail is why the "walled garden" works. He even talks about AOL and Compuserve of the 90's and misses the obvious corollary. Usability. Or in the colloquial vernacular, "easy". (Anyone remember, "So easy to use, no wonder it's number one!").
AOL was bloody easy to use. Apple's iPhone OS is bloody easy to use.
And there is any doubt that such platforms and systems will be successful?
This quote continues to ring in my head, "Simplicity is the ultimate sophistication." Apple probably doesn't even fully appreciate the means by which they were successful (And what will eventually be their downfall, like AOL's). Their controlled environment creates interfaces that users can easily understand and utilize. As the NY Times article mentions, it's very easy to make a purchase via the iPhone OS.
So why is this important?
Well, first, it's another "proof" for usability as king. The entire experience is managed by Apple and the consistency provides the "easy". AOL did the same for the Internet. They managed the entire experience and this made it very easy to do things "online".
Yet, AOL failed? Well, there are a number of contributing factors but I think the biggest was simply the content. AOL couldn't compete with the World Wide Web in content offering and as people became comfortable with the Internet, they wanted more than AOL could offer (AOL Charged partner's bucko bucks to have a presence on AOL... thus partners had great incentives to not use AOL).
So, is Apple's position a lock? Yes. Until someone does it better. Android is a competitor but unless Google locks down the usability issues (aka, device compatibility) it has no chance. Likewise, the hardware can't compete. Android also requires more user training and self-reliance. Can't figure something out on your iPod, you can walk into an Apple Store and get real-person assistance (no, Internet forums simply don't cut it for most people).
Apple's fierce instance on content control is its weakness, though. It's one thing to reject an app because it has a crappy interface, quite another to reject it because of content.
The question is begging to be asked: How can an open market compete? I don't know. I'm not that good and I'm not being paid enough to figure that out (Though, I'm accepting offers!) For now, some of the best work we can do as innovators and designers is to keep in mind the successes.
(Disclosure: I'm trying to get a job for Apple, at a retail outlet. Not that I really want to work for them at all, my talents would be better spent elsewhere, but it seems laid back and I think I understand their mentality. But I'm broke, so I'll do anything for a flexible job.)