For a while the complaints used to be about Apple's totally arbitrary process for choosing which apps get into the iPhone app store, but lately the complaints have been about Apple (again totally arbitrarily) removing apps that were already there. There were all those complaints about the sudden removal of "adult" apps (unless you were someone famous like Playboy, in which case Apple was fine with it), and now there are complaints that Apple suddenly and inexplicably has removed WiFi finders from the app store. While developers feel they need to keep developing for the iPhone given its footprint in the market, moves like this are going to keep pissing off developers quite a bit too. You can do that when you dominate the market, but it can come back to bite you later on.

Lots of folks have been submitting the story of how iPhone developers are reasonably pissed off about Apple's new edict barring "adult-themed applications" in the iPhone app store, though it has continued to allow big brand name adult apps, such as those from Playboy. But what has it banned? Well, don't try selling bathing suits to women. Apparently, that's considered an adult app.

While this is certainly Apple's right to do, this is one of the reasons why, in the long run, Apple's rather arbitrary app store policies are going to backfire. Developers are increasingly getting pissed off, or worried that Apple might suddenly pull the rug out from under them, with little explanation and barely any recourse. That's not an environment that appeals to developers in the long run. Yes, given the size of the iPhone (and soon iPad) market, plenty of development will continue. But in the long run, some of the more innovative and valuable apps will appear on other, more open platforms first, and make those platforms more appealing.

Trademark law, when used properly, serves an important purpose in making sure that consumers are not made worse off by being tricked into buying lower quality products and services under the belief that they're actually coming from someone else who is trusted. But in the age of the "ownership culture," where too many people have tried to twist trademark law away from its true origins to make it appear to be a quasi-"property right," you get too many cases of people using trademark law to actually make consumers worse off.

Take for example this story, sent in by iamtheky about how the University of Texas is trying to stop some former students from making an incredibly useful iPhone app for UT students, called iTexas, by claiming it infringes on their trademark on Texas.

The makers of the app, Mutual Mobile, have made a bunch of successful iPhone apps, but UT got upset last year when the company introduced the UT Directory, which put a much more useful interface on (you guessed it) the UT staff and student directories. After the University complained, the company felt that perhaps the use of the school's colors made it look like an "official" app, so they agreed to fix that part. When the company launched iTexas, it made sure that it didn't have the school's color scheme or do anything to make it appear as the official app. But it did make the app a lot more useful:

A free download, the app retains the searchable directory but also lists menus from different cafeterias across campus, tallies students' dining-card and Bevo Bucks balances, delivers class schedules, shows campus maps, and more.

This sounds like a great and rather useful app. Exactly the sort of thing that the University should be encouraging, not just because it would help some alumni succeed, but also because UT students would likely find the app quite useful. But, that's not the way UT officials think, apparently:

On Feb. 1, the Mutual team learned that UT had raised another objection to its latest app, specifically to the use of the word "Texas" in the name. "As this name is confusingly similar to the Texas [trademark], UT objects to such use," reads a notice sent to the Apple app store by attorney Wendy Larson. UT's board of regents began trademarking university properties back in 1981. A list of protected trademarks appears on the university Office of Trade mark Licensing Web page; alongside more specific trademarks such as Bevo and Lady Longhorns is, simply, Texas.

Lesson learned: don't try to make life better for UT students without first paying the University.

Matt writes in with a great example of how the concept that content is advertising and advertising is content is moving to the iPhone in the most recent iPhone app for NPR:

In this app, the mobile analytics and advertising company Medialets is serving up an ad for the new album, Contra, by the band Vampire Weekend. At first, the ad just peeks out at the bottom of the NPR app, but if you click to expand it, it quickly takes up the entire device. So why would you want to do this? Because it's a video for Vampire Weekend's new song "Cousins" -- and thanks to some of the iPhone's unique features, you can actually interact with the ad, shaking your iPhone to change how the video looks.

Seems like a perfect example of how both content is advertising and advertising is content. In this case, the "ad" is actually valuable content that people want to see. And yet, that content is also advertising the band and its new album, and doing so in a fun and compelling way. Of course, separately, I have to ask if the band is both paying for the ad and getting paid royalties for the ad? After all, this is clearly an advertisement for the band and its new album, but we're always told by the recording industry that any usage -- even those like radio that act as advertising -- need to be paid for with royalties.

It's amazing how people see one semi-successful concept and suddenly everyone has to pile on. The iPhone's app store has certainly been a success -- much more in terms of making the iPhone more attractive than for most developers. But it has all sorts of people thinking that "apps" are in again, and we're seeing app stores pop up in a variety of different places. The latest is Amazon's Kindle, which hopes to make the ebook reading device more valuable with more apps.

It does make me wonder, though, if people are betting too strongly on app stores, and not recognizing why it works so well in some areas. I also wonder if focusing on apps and app stores is going to make people miss out on the fact that web-based apps (that don't need to go through any app store) may overtake client-side apps. We've already gone through this on the desktop, and one by one, web-based apps have come along that match (or sometimes exceed) the functionality of client-side apps, leading many to turn away from client apps altogether.

Separately, adding another app store to another device may only serve to confuse (or annoy) some users. If you have an iPhone and a Kindle, and there are the same apps on both, which are you going to use? It may depend on the app, but my guess is that in most cases the phone is going to win out over an ebook reader.

There's lots of buzz going around concerning the news that an AT&T exec has admitted that to deal with the companies own inability to build out a strong cellular network (angering tons of iPhone users), that it's planning to put in place caps and charge more to high-end users. Of course, this is pure bait and switch. The company sold people on an unlimited data plan, failed to invest in its network, and pushed high bandwidth apps on people. And, of course, it's worth noting that while they now want to charge high bandwidth users more, they don't say anything about the low bandwidth users. No one gets a discount. AT&T is making a ton of money off of the iPhone. It could have -- and should have -- invested more of that into network upgrades. Now it's blaming its most loyal users -- the same ones who it recommended high bandwidth apps to -- and expecting that everyone will be happy with that? AT&T may discover that people start looking for other alternatives if they dump the unlimited data offering that they sold people.

Funny how this works, right? Just a week or so after it's first ever quarterly loss and an admission that it totally screwed up in the smartphone market, Nokia suddenly sues Apple for patent infringement over the iPhone. It looks like the old adage is true again: if you can't innovate, litigate! It's the same story all over again. A company that was a leader in the market but got complacent and lazy, suddenly finds that it lost its lead to a more innovative upstart. Since it's so far behind, even scrambling around doesn't help it to catch up, so it just starts suing over patents.

This story nicely highlights a few other points as well. We keep hearing from patent system supporters how the patent system is necessary because, without it, the market leader would always just immediately copy the upstart and "steal" their idea. Of course, Nokia has had two plus years to "steal" Apple's idea, and where is it in the smartphone market? It's not so easy to just copy someone else's idea -- especially if you're a huge player like Nokia, who will often view the disruptive innovator as not being worthy of paying attention to (which basically was Nokia's reaction to the iPhone).

Separately, remember how confused we were when Steve Jobs proudly hyped up the fact that Apple had over 200 patents on the iPhone concept? We've pointed out that it's hardly done anything to stop lawsuits. Apple has been sued over and over and over and over and over and over again for patent infringement. Welcome to the tragedy of the anti-commons, where it becomes impossible to do pretty much anything innovative without facing massive legal costs. Basically, if you build anything even remotely innovative these days, you're going to get sued for patent infringement, probably multiple times. It's become a massive tax on innovation, rather than a lever for innovation.

Among people who really, really want to believe that there's a huge market out there for selling content directly, the iPhone App Store has recently become "Exhibit A." The thinking is that all you have to do is slap together that perfect Steve Jobsian user interface that just makes it so easy to buy, and people will start forking over their money. It was part of David Carr's argument when we debated newspaper micropayments. Except... there really isn't that much evidence to support even the claim that the iPhone App Store really sells that much. We were a bit skeptical of the early reports that people claimed offered "proof" that people would buy all sorts of apps. Then, earlier this year, we suggested that it was an early warning sign that so many apps on iPhones were never used at all or were used once and abandoned. Basically, that meant that people would test stuff out when they first got the phone, but sales would likely dwindle after that. More evidence was provided by an analyst firm that figured out how little money Apple was making from app sales (which is fine -- Apple is in it just to sell hardware, but it suggested that app sales weren't quite as amazing as people were claiming).

Newsweek is presenting some more evidence -- albeit anecdotal -- that the iPhone App Store isn't making very many people very much money at all. There are, certainly, a few folks at the top who are doing okay, but for most people there just aren't that many sales -- or the cost of getting those sales greatly outweighs the revenue that came in from them.

This isn't to say that the iPhone App Store is a failure. In fact, I'd argue it's been a huge success in making the iPhone significantly more valuable. But as evidence that there's a huge market out there of people willing to pay for content if it's just packaged up nicely? There's just not enough there to be convincing.

Given all the talk in DC lately about anti-competitive exclusive cellphone distribution arrangements, it's very interesting to see a rumor broken by the Globe and Mail about the iPhone in Canada. According to The Globe, Rogers will soon lose its iPhone exclusive as both TELUS and Bell Mobility add the iconic device to their Christmas line-up. Bell and TELUS are migrating away from the CDMA technology they have used up to 3G, towards the more globally compatible GSM evolutions. To minimize costs, the two carriers are building a single shared-infrastructure network, on which they will both sell services. While Rogers, the long-time GSM user, will have the wider network footprint and offer iPhones fall-back to their 2G data networks when out of 3G coverage, that advantage is countered by TELUS and Bell offering 3.5G HSPA+ speeds to Rogers' 3G. Under current coverage conditions, iPhone urbanites might prefer the new entrants, while sub-urbanites may prefer Rogers.

What is most interesting here is the break from Apple's conventional one-country-one-carrier strategy, which has attracted the attention of more than a few countries' regulators. The Canadian case will be the first market where competing carriers offer the iPhone, without a regulator forcing Apple's hand. Perhaps Germany will follow Canada: there are rumors that T-Mobile will lose their exclusive deal with Apple by year's end, and British/Spanish carrier O2 will enter the market with preferable iPhone plans. In the USA, most of the hot water Apple is swimming in is because the FTC isn't happy with the iPhone app approval process, which nixed the Google voice app. But while the FTC branch is focused on the App Store, some Congressional Reps are voicing their displeasure at the exclusive iPhone deal with AT&T. Governments around the world aren't sure what to make of exclusive phone distribution deals - which, strangely, never seemed to raise an eyebrow until the iPhone. In France, the Orange-Apple 5-yr exclusive was smacked down by the feds who argued that an exclusive arrangement would add "a new element of rigidity in the sector which is already suffering from a lack of competition." But here's where I'm not so clear.

I agree that exclusives, when examined in isolation, are anti-competitive. But overall, I'm not clear on how a 2007 new entrant (Apple), with a disruptive device that lit a fire under the incumbent vendors, could be perceived as "anti-competitive" in terms of net results. In fact, the exclusivity has undeniably forced the competing carriers to work their butts off to come up with a comparable device, seeking it from the likes of Nokia, Samsung (which are scrambling to respond, though they'd never admit it), or newer players like HTC or INQ. The exclusive deals seem to be spurring competition. In contrast, in a world where every telco carries the iPhone, the telcos actually can worry less about offering something else that's equal or better. I suppose someday it could make sense to go after Apple exclusives, but why not wait until the net effect on society is actually negative in some measurable way? A good rule for government should be, "When in doubt, leave it alone."

Meanwhile, the Canadian case will certainly offer Canadians more choice among iPhone providers, and most notably iPhone plans. Canadians tasted the bitter flavor of inadequate competition when iPhone data plans were first announced there in mid 2008. Three-year contracts, no unlimited data plan, high per-MB pricing, and a triple lock-in. Yes, Canada may soon see more service competition around the iPhone -- but will Canada see more or less device competition?

There's just something when we see a dominant technology out there that makes people assume that no one will ever out innovate it, and then fear that we're stuck with the dominant player forever. Adam Theirer has a post discussing this concept in relation to a recent paper by Robert Hahn and Hal Singer, Why the iPhone Won't Last Forever and What the Government Should Do to Promote its Successor, which highlights how dominant platforms often appear insurmountable, but often quickly are defeated from unexpected sources. Thus, worrying about things like exclusive arrangements or if the platform is too closed off may be a waste of time. Eventually, the market ends up taking care of it. The paper points out that previous technologies are often declared the "end of innovation" as well, such as the Motorola MicroTAC flip phone (I had one, ages ago), which Fortune described in 1989 by saying:

Portable phones won't get a lot smaller than this one. After all, they have to reach from your ear to your mouth.

Take a look: And no more innovation ever happened in mobile phones over the past twenty years, right?