Does one bad apple spoil the whole bunch? Does it require direct contact? Contact through the air? If so, what sort of mechanism accounts for the communication that occurs among the apples?
In general, plant tissues communicate using classes of compounds called hormones. These are defined as substances produced in one location that have an effect on target cells in a non-adjacent location. In plants, germination, growth, development, reproduction, and environmental response are all coordinated through hormones. Although most of the main plant hormones are transported in the vascular system of the plant, one class of hormones is transferred in gaseous phase. This class includes the plant hormone ethylene.
Ethylene is manufactured and released by rapidly growing tissues (i.e., meristems) in roots, senescing flowers, and ripening fruit. For example, the darkened spots on a ripe banana release great amounts of ethylene. Ethylene has many effects on plants including being responsible for the stunting of plants in high winds or when repeatedly touched. In addition, ethylene promotes fruit ripening. Like many hormones, it does so at very low concentrations. Apple growers take advantage of this by picking fruit when it is not ripe, holding it in enclosed conditions without ethylene, and exposing it to ethylene right before taking it to market. This process is why we have newly ripened apples grown in temperate North America even in the spring and summer (apples ripen in the fall).
During the process of ripening, apples convert stored starch into sugar. In apples and many other commercial fruit, the sweet portion of the fruit evolved as a reward for animal seed dispersers. When seeds are ripe and ready for dispersal, the fruit converts stored starch, which does not taste sweet, into sugar. The hormone ethylene initiates the metabolic pathways that lead to this conversion. The iodine staining procedure you use in this activity tests for the presence of starch. Iodine turns black in the presence of starch. So when the fruit is not ripe, starch is present, and the apple will stain black. As ripening proceeds and starch is converted to sugar, the apple will no longer stain black.