Who's Apple's Real Puppet Master?

OK, Apple (Nasdaq: AAPL  ) isn't the new Big Brother. But the real Big Brother is asking Apple what the heck it's up to.

A briskly worded letter sent by FCC bureau chief James Schlichting asks Apple to explain why the company rejected an official Google (Nasdaq: GOOG  ) Voice application and removed several unofficial third-party apps from its iPhone app store. Among the questions asked, a couple caught my eye:

  • Did Apple "act alone or in consultation with" exclusive U.S. iPhone service provider AT&T (NYSE: T  ) ?
  • "Please explain any differences" between the rejected apps and any other voice over Internet (VoIP) applications that remain in the store.
  • "What are the standards for considering and approving iPhone applications?"

When Apple distanced itself from all the Google Voice apps, the company may have lost a few customers. That includes high-profile TechCrunch founder Michael Arrington, who says he'd rather take the $175 termination fee and switch to a Google-backed Android phone than worry about the whims of Apple's store policies.

"It's not an easy decision," says Arrington. "Except, it sort of is. Google isn't forcing the decision on me, Apple and AT&T are. So I choose to work with the company that isn't forcing me to do things their way."

The queries seem to paint Apple's approval processes as opaque and possibly unreasonable. Did AT&T have a finger in this debacle? I think it likely, but don't forget that Ma Bell is far from Apple's only partner. Vodafone (NYSE: VOD  ) sells the iPhone in markets like India and Italy, for example, and Deutsche Telekom (NYSE: DT  ) subsidiary T-Mobile handles several European markets, including the Netherlands and Austria.

More than 20 different operators have iPhone distribution deals. AT&T can't be the only one worrying about its own highly profitable services being made obsolete by Google Voice.

Today, Google has official Google Voice apps for the Android and for Research In Motion (Nasdaq: RIMM  ) BlackBerry phones. The Palm (Nasdaq: PALM  ) Pre may be a worthy replacement for the iPhone in many ways -- but it, too, lacks an official Google Voice application at this time.

Would you eat a termination fee to preserve your right to choose software applications? I'm in the process of choosing a new smartphone myself, and let's just say Apple didn't exactly win my business with this fiasco. Lather, rinse, and repeat -- and the defections could add up to serious amounts of lost business.

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Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.


Read/Post Comments (5) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 03, 2009, at 7:37 PM, plange01 wrote:

    foolish hedge funds and institutions who just keep buying and forcing prices higher untill they collapse like last fall...

  • Report this Comment On August 03, 2009, at 10:18 PM, Maraith wrote:

    What silliness. Apple has the right to determine what applications they can support and which ones are of poor quality and questionable value.

    There's nothing out there near the quality of the iPhone and if something this silly is going to change your mind, then it's best you go elsewhere anyway to find more molehills.

  • Report this Comment On August 04, 2009, at 2:58 AM, Suenooks123 wrote:

    T-Mobile sucks

  • Report this Comment On August 04, 2009, at 12:46 PM, fjose wrote:

    Just to let everyone know, I don't think techcrunch is a Microsoft shill. Neither is anders Bylund.

  • Report this Comment On August 04, 2009, at 12:50 PM, fjose wrote:

    Neither are day shills for google or blackberry. Their track records prove it.

    You see Jobs runs apple without regard to WS. He is missing out on all the intellect that these ivy leaguers are more than willing to share. Remember how they took the company away, nearly two decades ago, from Jobs leadership and moved it to a higher level.

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