2009 July 28 | Alec Saunders

Apple is taking a lot of heat for rejecting Google Voice from the iPhone application store. The move is widely seen as anti-competitive, and by most commentators as further evidence of Apple’s servitude to AT&T.

But so far, nobody really knows. Apple isn’t talking, and AT&T would only say “You need to speak with Apple for anything involving its apps store”, attempting to distance itself from the controversy.

What if there’s more to it than the surface suggests? Here are two of the more popular conspiracy theories out there and why they don’t really make sense.

Follow the money. It’s no secret that Apple gets a share of revenues from it’s carrier partners. And yes, Google Voice would allow free calls – except for the nasty detail of air time. In fact, since most plans include a bundle of local and long distance minutes, Apple shouldn’t see a dip in revenues at all from Google Voice. Nor, for that matter, should the carrier. Smart carriers should want to partner with Google Voice for terminations, rather than lock them out. They can actually earn more money this way by bundling long distance minutes into the airtime charges, and then charging again for consumers who choose to terminate their calls through Google Voice.

Nope. Apple’s decision is not about the money.

Follow the lock. This theory says that carriers are worried about Google Voice because local number portability is such a hassle. That’s right! Once your contract is up, Google Voice would make it that much easier to dump AT&T in favour of say, Sprint. Proponents of this viewpoint think that carriers still value the lock-in associated with owning your number. The problem is that number portability just isn’t that much of a hassle, and if the carriers try to make it hassle… well, you can bet some consumer-oriented visibility-seeking politician will step right in to help solve that one.

So Apple’s decision is not really about lock-in either.

No, if Apple were really worried about protecting their carrier relationships and revenues from the threat of other voice application on iPhone, then they’d be kicking out Truphone, Fring, Nimbuzz, iSip and countless others. But they’re not. Moreover, as Om Malik pointed out, AT&T hasn’t objected to GoogleVoice for BlackBerry yet, so why object to it on iPhone?

Maybe the reason really is “duplicated functionality”. Remember Podcaster? This application let users download podcasts over the air. It was rejected by Apple in September 2008 because it “duplicated functionality” also. But Apple didn’t actually provide the ability to download podcasts over the air. It wasn’t until a couple of months later that over the air downloads debuted in the OS 2.2 update. Perhaps Apple themselves are quietly developing features that are competitive to Google Voice? After all, the telephony pieces of iPhone are virtually unchanged since iPhone OS Version 1. And perhaps, as they did with the visual voicemail feature, they will want to deploy these features in conjunction with their carrier partners.

Food for thought.

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Sunday morning the new Gizmo5/Google Voice mashup debuted. Out in beta, it lets you make a phone call, via Wifi/Gizmo5, using your Google Voice account. This new capability is in addition to Google Voice’s existing ability to route an incoming call to your Gizmo5 account. In the US, that means that starting now, if you are a user of both these services, then all of calls, if made or received on a PC or a handset running a WiFi SIP client, whether long distance or local, cost nothing. Outside the US, it means that they’re at least really really cheap. Andy Abramson pointed me to it, and truth be told, for a guy like Andy this is huge.

Setting up the link is simple. Visit the Gizmo5 settings page, select “Use for all calls”, or “Use for U.S. calls only” in the dashboard page, and you’re done.

On the Google Voice side, simply add a new “Gizmo” phone.

I tried it out with Andy on Sunday morning.

Calls made to my Google Voice number rang through on the existing mobile and fixed line handsets that I have, as well as on the Gizmo5 client on my PC and on the Gizmo 5 client on my Nokia N-series handsets.

I have no credit in my Gizmo5 account at the moment, and only $.10 credit in my Google Voice account on Sunday morning. However, calls made via Gizmo5 to US destinations rang through on the US destinations with no trouble, transported by Google Voice.

Calls made with the iSip client on iPhone rang through Gizmo then Google Voice and on to their final destination. Again, no charge.

It worked perfectly, and were I living in the United States, it would be absolutely free phone service – a free dial in number, free long distance, free voice mail, free call screening and so on. Outside the US it’s still useful and very competitive. Google Voice’s long distance rates are in many cases slightly better than even Gizmo’s, so it represents a savings to the customer. More to the point, however, in this increasingly flat world, it is an opportunity for any individual or business to be reachable from North America at no cost.

Once again, Gizmo5 owner and maverick Michael Robertson is turning accepted business models upside down. In allying with Google he is providing undeniable customer benefit. However, it’s at the expense of nearly all of Gizmo5’s revenue generating services such as long distance and call-in numbers, which are now provided at no charge by Google. We’ll have to wait and see what he does next.

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