Cydia has been the hub of the iPhone gray market for some time now, but developer Jay Freeman is planning on turning the jailbroken app manager into a questionably licit competitor to the App Store. Will Apple do something about this? We’ll see, it appears.

Converting Cydia into a proper application store won’t be complicated, and more or less amounts to Freeman adding a centralized payment service to the software. His competitive ambitions, though, aren’t so subtle: He has stated that “the overworking goal is to provide choice” and that he plans on match or beat Apple’s commission for downloaded apps.

Paid apps are currently available in Cydia, but purchase has to be arranged on an app-by-app basis, usually through unwieldy product key schemes or PayPal. While a centralized Cydia payment system would make purchasing apps such as Snapture and PDAnet simpler and could breed innovation for potentially useful nonsanctioned apps, but it also provides a single, unified target for Apple should they decide to start hurling lawyers at the jailbreak scene.

Though the company hasn’t specifically responded to this announcement, it’d be naive to think they won’t: in effect, Freeman, who has already hired a lawyer, has just announced that he plans on making money on a process that Apple claimed to be totally illegal just a few weeks ago. We’ll wish him luck, but odds are Apple will have something to say about this development.