Do you remember Apple's (Nasdaq: AAPL ) famous "1984" Super Bowl commercial? A young, fresh hero dares to stand up against the blank, gray oppression of a stylized IBM (NYSE: IBM ) that smacks heavily of George Orwell's "Big Brother." When Steve Jobs introduced the spot, he said that "dealers initially welcoming IBM with open arms now fear an IBM-dominated and controlled future. They are increasingly and desperately turning back to Apple as the only force that can ensure their future freedom."
Oh my, how the tables have turned.
Meet the new boss -- same as the old boss!
Today, it's Apple that looks like the big, bad oppressor of independent thought. Limiting the discussion to just the last couple of weeks, Apple started by kicking the Palm (Nasdaq: PALM ) Pre out of its iTunes music store. (Don't worry, Pre fans -- Palm quickly snuck back inside, just as we thought.)
And now, word is streaming in from the ramparts of the war on corporate stonewalls: Several iTunes App Store applications that integrate Google's (Nasdaq: GOOG ) Google Voice service with the popular handset have been struck dead. The Guardian reports the rejection comes because Google Voice "duplicates features that come with the iPhone," as it can reroute incoming and outgoing calls through the phone's high-speed data connection rather than an additional voice service plan. Changing service providers is a cinch with Google Voice, as your central number can forward calls anywhere you choose. SMS messages are free to send and receive through Big G. Even the voicemail feature can do nifty tricks like full-text transcripts on the fly.
All of those features sound great for iPhone customers because they replace less impressive and often more expensive equivalents from the service provider, which would be AT&T (NYSE: T ) here in the States. Great for customers but bad for AT&T, then. Google would play the sledgehammer-hurling young heroine in this remake of 1984, aiming right at Ma Bell's stone-cold visage. Take away voice plans and those lucrative SMS messages, and you'd hobble AT&T's money-making powers significantly. So it looks like the telecom giant called in Apple to do its dirty work and remove this threat. Looks like we’ve found the real Big Brother.
What's wrong with this picture?
That strategy might have worked if the iPhone was the only decent smartphone on the market. With all due respect, that's simply not the case anymore. Unhappy customers are free to choose very comparable alternatives like the Palm Pre, or current and upcoming Google Android phones, or their favorite BlackBerry from Research In Motion (Nasdaq: RIMM ) .
Android and BlackBerry already support Google Voice with official apps, and I'd be surprised if the Pre had a long wait ahead for such a beast. These are the modern underdogs, itching to take the fight to Big Brother on their own terms. And let's face it: The prevailing system of monthly allotments of calling minutes plus surcharges for something as simple as SMS text messages is due for a revolution.
The technology is here to create a better, more advanced, and less expensive end-user experience, and the masses will soon demand to use it. Expect virtual clones of Google Voice to appear soon, backed by new upstarts as well as current stakeholders in the mobile communications markets. Maybe AT&T won't rest until the iPhone can sport an "AT&T Voice" application with many of Google's features?
Where do we go from here?
Apple may look like the oppressor here, but only on the surface. Jobs and his merry men are still underdogs against Microsoft (Nasdaq: MSFT ) in the personal computer space, and they probably didn't really want to hamstring the iPhone if there was any choice. I see three possible outcomes of this ugly state of affairs, listed here in order of likelihood:
- AT&T's iron will bends and Apple reinstates Google Voice as a full citizen of the App Store. Apple and consumers win; AT&T and rival smartphone designers lose. It's a wash for Google, which wins the software battle but loses a marketable advantage for Android.
- Apple keeps the Voice app on the sidelines until the levee breaks and everybody wants discounted calls alongside free text messages. Apple should lose market share this way, while the competition gains. Google becomes the big winner and AT&T the biggest loser under this scenario.
- The Apple App store remains blissfully Voice-free for all eternity and King iPhone continues to rule with a steel glove wrapped in velveteen. Apple and AT&T win, everybody else will lose. Also, Jimi Hendrix and the Beatles, riding flying unicorns, restage Woodstock to usher in a new era of peace, love, and understanding. Ain't gonna happen, folks.
Start investing today – just $7 per trade with Scottrade. Or find the broker that’s right for you.