There has always been a lot of debate on why Apple is a closed system and why Apple is restricting companies from riding on top of their flagship products. On the other end, you have of course Google with their open-source technologies.
I don't deny that open-source is good for the industry as a whole because it encourages innovation. You build on top of what's already been created. You do not need to start from scratch and thus, you can achieve innovative products faster than a closed patent system where you're highly dependent on the company that patented the product. That is of course provided that company is not a patent troll. To date, I still prefer Java over .Net.
I would like to give my take on why Apple chose to make their products a closed system. I really admire Steve Jobs guts because he firmly believes that the products he envisioned is what that will bring us to the next level. He builds products for a specific purpose and as a result, his products are a hit. You'll never think of playing Solitaire on an iPod Nano. Instead, you'll get the iPod Touch.
Why are Apple products a closed system? The reason (in my opinion) is very simple. To provide the best experience to the customer for that particular function. To achieve that experience, you'll need to maintain control over every aspect of the product so that you can always fine-tune and tweak it according to the vision that you have.
"Too many cooks spoil the broth". You'll only need one master chef to make the decision. The more people that are involved in a decision making process, the longer it drags because everyone thinks that their viewpoints are the only way forward. The worst possible scenario is that to please everyone, everyone's viewpoints are incorporated into the next generation of the product. The product will most probably lose its shine because the focus has been lost. The Android fragmentation is one good example. Can it be resolved? Personally, I don't think so. Why is Nokia unable to bring forward a product to rival the iPhone for 3 years?
Opponents will of course say that customers are always right. That's something that I personally don't believe in. The reason is also very simple. When you buy a product, you're admitting that someone is providing a service/function that you cannot provide. Therefore, how can a customer be always right when you are not even in the position to provide that service/function? One can always argue that the product doesn't address your needs. Then the question to that customer is that are you looking at the right product to resolve your problem? Most probably, you're not.
When I create a product, I will always have in mind what problem it's meant to resolve. A product always addresses specific issues. If you don't have that focus in mind, your product will not stand out. It'll be worse if you add in many people's viewpoints and ideas. That's also the main reason why some bosses setup multiple companies addressing different needs. They understand this concept of specialisation.
This closed system has its disadvantages too. You're totally reliant on the product inventor and the inventor has to ensure that the products still achieve the general vision that the company has. I admire people who dare to stand up to everyone and say that this is what you need to resolve the problem(s) that you're having and this is how you do it.
And guess what? They may be right because you're stuck with the problem and they don't seem to have any.
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