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Is Apple AT&T’s bitch? I don’t think so.

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.

{ 6 comments… add one }

  • David Beckemeyer July 28, 2009, 5:32 pm

    Great post, Alec, as usual. I was thinking the same thing.

    But then, we're assuming there actually is a RATIONAL basis for rejecting the app :)

  • AdamC July 28, 2009, 7:12 pm

    The fairest analysis I had read so far while the rest are bitching and whining.

  • David Beckemeyer July 28, 2009, 9:32 pm

    Great post, Alec, as usual. I was thinking the same thing.

    But then, we’re assuming there actually is a RATIONAL basis for rejecting the app :)

  • AdamC July 28, 2009, 11:12 pm

    The fairest analysis I had read so far while the rest are bitching and whining.

  • sfan July 29, 2009, 3:27 am

    Fine food for thought Alex. Unfortunately your third scenario only reinforces the dark side reputation of Apple. As brilliant as its products are, they are one of the most proprietary businesses in our industry. "Duplicated functionality" sounds like a rational, perhaps even reasonable, reason, yet what it really means is that Apple won't let iPhone users have the choice.

  • sfan July 29, 2009, 7:27 am

    Fine food for thought Alex. Unfortunately your third scenario only reinforces the dark side reputation of Apple. As brilliant as its products are, they are one of the most proprietary businesses in our industry. “Duplicated functionality” sounds like a rational, perhaps even reasonable, reason, yet what it really means is that Apple won’t let iPhone users have the choice.

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