Why Apple, AT&T, and consumers are at odds

Why Apple, AT&T and consumers are at oddsIn tech circles, Apple’s been making some decisions that have concerned many consumers (not to mention Google’s CEO, who resigned from Apple’s board Monday). They have potentially caused serious damage to their relationship with Google, and undermined much of the promise of leading the charge in bringing unparalleled functionality to the mobile phone.

So what happened? The first recent rumblings of discontent came around the time of the 3.0 software launch and the release of the iPhone 3GS. While the iPhone now had sanctioned video capabilities, some of the very neat live broadcasting solutions like Qik or Flixwagon weren’t being allowed into the AppStore, despite already having software functioning flawlessly for months on jailbroken versions of the iPhone.

Then the trouble with Google started.

Google’s Latitude, one of the potential heavy hitters in location based social functionality, was relegated to a neutered release on Apple’s devices as a web-only app. This dramatically reduced the functionality of the service by prohibiting a native version of the application. Then, Apple attacked Google Voice. There were two applications working with Google Voice already in the AppStore, and Google was working on its own native app for the service. Suddenly and without warning, Apple removed the two consumer driven apps from the AppStore, and denied Google’s native app.

The latest straw to the camel’s back is Apple’s response to the Electronic Frontier Foundation’s (EFF) proposal to the Copyright Office to allow an exemption to the DCMA for the purpose of jailbreaking phones. One of Apple’s many claims is that such a move would fundamentally compromise national security, allowing the devices to potentially be used to disrupt the telecommunications infrastructure. The claim is fairly outrageous, for many reasons.

So what’s up with Apple? Most sources point to AT&T. While the move against Google Latitude likely is a way of protecting their own MobileMe “Find my Phone” feature, most of the other decisions seem to protect AT&T’s network either from competitive offerings (Google Voice), or higher data use (live video streaming) on a network which is already suffering scale issues with the iPhone’s data use.

Two months ago I firmly believed that Apple would continue to lead the charge for smartphones for at least the next two year cycle. Now I’m not so sure. Yes, the promise of a 4G iPhone on Verizon’s network in 2010 is a powerful idea, but each of Apple’s above decisions give a killer app to their competition. Android phones current and upcoming can stream live video, continuously update user locations for networking with friends and family, and integrate seamlessly with the user’s other phones using one number to rule them all. Apple phones cannot…or rather, will not. At least in the mobile space, it looks more and more like the “I’m a Mac” phones are wearing the suits, and the “I’m not a Mac” phones are wearing the sneakers.