How Apple Can Wreck Your Business

After $500,000 in development costs, FreedomVOICE has abandoned the Beta test of Newber, an application which blended the best of VoIP and location awareness to allow users to direct calls to various phones. The app even allows you to swap calls from phone to phone mid-conversation.

Newber was submitted to Apple on October 2, 2008 and after 165 days, Apple has not approved the application and worse it won’t tell FreedomVoice anything. Interestingly Apple did approve the company’s other application IQ Voicemail in about a month according to the company so there is something about the Newber app that Apple doesn’t like.

Eric Thomas the CEO of the company writes about the situation and pins the blame on a middle manager at Apple. While I can’t verify who is responsible for putting the approval process in limbo I surmise that there is fear in the company that this application will take revenue away from AT&T and thus reduce the amount of money it can make selling service on the phone which in turn reduces the subsidy Apple might receive on each device.

I feel for FreedomVoice and I think what Apple is doing is terrible to developers who end up in the no man’s land between approval and denial. I also think that Apple lock on the App Store stinks for end users. But on balance, the iPhone/iPod Touch platform has tens of thousands of applications and no other device even compares.

So the question worth asking is can Apple please give developers some sort of playbook before they start spending their money to better the iPhone? The fact that Apple doesn’t do this makes you wonder if there is something Apple/AT&T are worried about – perhaps their comments on why an app doesn’t fly can be used against them in the future by the EU, DOJ or in a class-action suit? One wonders why Apple would want to endure any bad press with such a successful product.

  • Marc Lehmann
    March 18, 2009 at 11:37 pm

    Interesting considering Fring app was allowed which lets users bypase. I can see the fear factor in Apple/ATandT on this. Nasty balancing act between developers and telco’s

  • Rich Tehrani
    March 19, 2009 at 8:30 am

    Exactly, as a developer you look to make your software better and it seems if you make it “too good” you get in trouble.

  • Brian McTavish
    March 19, 2009 at 11:53 am

    Oh come off it with the faux-naivite. Every developer knows that, right or wrong, Apple did a deal with AT&T which involves protecting their hefty margins. You may disagree with their need or right to do that, but it’s a fact – and they are after all in the game to make money. It may be rather rude not to give a straight ‘no’, and I feel sorry for their predicament, but any company pouring such a huge amount of money into one app. with this functionality is frankly incompetent if it wasn’t highly aware that it was a high risk bet to try to steal a big beast’s lunch. Compare, for example, those whose cut and paste and landscape keyboard apps have been blown out of the water by this week’s v3.0 software announcements. Business is not always a gentle process.

  • Synthmeister
    March 19, 2009 at 12:04 pm

    As a developer, I would hesitate to spend $500K on an app which clearly might tick off AT&T and/or Apple before I got the blessing of someone very high up in management.
    Isn’t that common sense?
    Investing $5000 before they knew it was okay? Maybe. But $500,000 investment before they had any idea whether it was acceptable? Couldn’t they make a stripped down VOIP version before they wasted the $500,000 on all the fancy features?
    Something doesn’t make sense here. Who in their right mind would risk that kind of $$$ without some kind of confirmation from Apple beforehand. (I mean outside of banks and wallstreet?)

  • Nick Gowdy
    March 19, 2009 at 2:07 pm

    To clarify, the $500K was spent largely on the load-handling architecture and developer time to create the technology. The architecture can be largely re-purposed to better serve our existing base of virtual office and hosted VoIP PBX customers (www.freedomiq.com). The time spent developing the application will also be re-purposed in the future, as we plan to work similar functionality into the feature set of said hosted VoIP PBX product and develop for less enigmatic, “black box” mobile phone platforms.
    Another clarification — the application does not use VoIP and also does not send calls over AT&T’s data network (something they’ve specifically spoken out against). Calls that ring the iPhone were transmitted using AT&T’s cellular network. As long as the iPhone was involved, we were not end-running AT&T.
    We understood there was risk involved, but we were encouraged by the fact that other applications such as Fring and TruPhone were doing far worse things to the AT&T-Apple alliance than what Newber does. Regardless of whether this was a blunder of confidence on our part, the fact remains that Apple’s treatment of application developers is horrendous. We’re definitely not alone in this experience, and the end result is great applications being run into the ground by a company and a process that doesn’t have the decency to just say no.

  • Eric Thomas
    March 19, 2009 at 2:53 pm

    When we pulled the trigger on developing Newber, no applications had been accepted in the App Store. We believed the information that we had at the time and according to Apple mostly seems to be true – they claim 96% of apps have been accepted. If that’s the case our guess that we had a small chance that we would not be accepted was correct, we just happened to be one of the 4%. And that I don’t have a problem with. What I have issue with is that they have taken 6 months to tell us nothing. To me it’s just not the way you treat your corporate neighbors.
    Newber is a boon for AT&T. It makes the iPhone, not your desk phone, your primary business device for many for whom that wouldn’t be true. The net effect is that it moves more business onto their network and makes the iPhone/AT&T experience even better. The idea that when you have low battery, or bad reception you can easily move the call mid-conversation and not have to say “um, can I call you back from a landline” makes you seem more professional. That you can start a call at your home office and mid-call move it to your iPhone and leave makes it so you’re free to move about the country. In any case Newber was without doubt good for all parties: customer, Apple and AT&T. But we never got a chance to make that argument because they won’t talk to us.
    The money and time we spent is not a total loss. Equipment purchases can be re-purposed to serve our existing base of FreedomIQ hosted VoIP PBX customers (www.freedomiq.com). The developer time will also be re-purposed when we flesh out the application for more serious platforms (BlackBerry, Windows Mobile, etc.) at a later date and integrate it with FreedomIQ. That has been our endgame all along, anyway. If Newber succeeded in anything, it overwhelmingly confirmed that people want this application and that we’re justified in pursuing its integration with our existing services.

  • JS
    March 19, 2009 at 10:00 pm

    For some reason, I think we are not getting the whole story here.
    “That has been our endgame all along, anyway.”
    Says a lot.

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