Friday, July 31, 2009

Latitude and Voice: The impeccable logic of AT&T/Apple’s App Store rejections

AT&T/Apple blocked all Google Voice Apps from the iPhone. I’m an extreme case, but if they were fully able to block Google Voice use from the iPhone they’d cost me up to $70-$90/month (frequent long distance mobile phone calls to Canada plus potential SMS savings).

AT&T/Apple also blocked Google Latitude’s location finder from the iPhone. It’s been less remarked that AT&T sells a competing location find app …

Gordon's Notes: iPhone trouble: Apple rejects Google Latitude, possibly Google Voice

… AT&T's Location Finder costs $15/month for a family of five…

That’s a lot of money for a service Google provides for free.

AT&T is pushing the antitrust envelope in a fierce and rational fight to stay alive. Apple has more ways to make money, but they’re in the game with AT&T and they too face disruptive threats.

AT&T and Apple’s behavior is rational and is very likely in the interests of their shareholders, though Apple’s abuse of the affected developers is over the edge. I’m much more offended by that than I am by the blocking of the Google Voice and Latitude apps; Apple should have found a way to keep these developer’s whole.

AT&T and Apple are behaving rationally in the face of a disruptive market entry. The best answer, after all, to the Innovator’s Dilemma is to identify potential disruptive forces and use economic warfare to destroy them – or, in the case of an opponent the size of Google, slow their advance.

Their interests, of course, are not always mine. In this case, our interests conflict strongly. It's very easy to see, given these precedents, the path AT&T and Apple will (must) take to eliminate competitive threats and maximize their future revenue streams.

So the question for me, and people like me, is how best to adapt. It’s no good trying to argue Google/Apple away from their positions – they are entirely logical. My strategy is to draw closer to Google, the disruptive force currently most aligned with my interests.

What’s your strategy?

Update: see also – Lessons from Apple’s rejection of Google Voice and Latitude. The App Store, from a consumer perspective, has a fatal flaw.

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