The strange case of Gizmodo and the iPhone prototype

You'd have to be living under a rock for the last 24 hours not to have heard about Gizmodo's reporting about a device that appears to be a prototype of the next-generation iPhone. (I'm not going to link to Gizmodo, for reasons that will become obvious.) Here's the 30-second summary, as I understand it:

• The phone was left at a bar in Redwood City, CA by an Apple engineer, and was found by another patron.
• Rather than turn the phone over to the bar management so that it could be claimed by the owner, the patron took it home and noticed that although the rubber cover looked like an iPhone 3GS, the phone inside was significantly different, with two cameras, a flash, two volume buttons, a higher resolution display and a more angular industrial design.
• The device was clearly labeled "Apple", and rather than contact Apple to see if it was their device, the finder of the phone took photos of it and sent them to Engadget, and probably others.
• Engadget published the photos and noted that the finder was offering to sell Engadget (and others) time playing with the phone.
• Gizmodo purchased the phone for a rumored $5,000 and confirmed that it looks like an iPhone to Apple's own software. The blog took videos and still photos of the the phone, and then disassembled it and identified a number of components labeled "Apple".
• At some point yesterday, Apple contacted Gizmodo and requested that the phone be returned. Gizmodo agreed to do so, on the condition that Apple request return of the phone in writing.
• Gizmodo then published the name and picture of the engineer who lost the phone.
• Finally, Gizmodo received and published a one-page letter from Apple requesting return of the phone.

On the one hand, this was a great "get" by Gizmodo. Apple is famous for keeping pre-announcement prototypes locked down, and letting a blog not only see but tear down the next iPhone a couple of months before its announcement was a security failure of the first order. However, Gizmodo did some really sleazy (and potentially illegal) things in the process of getting and reporting its scoop:

• The person who found the phone shouldn't have kept it; he or she should have left it with management at the bar. In the worst case, the finder should have contacted Apple and found out if they wanted the phone back. That's not good manners, that's California law on found property.
• Gizmodo has lawyers and should have known that buying the phone was tantamount to buying stolen property.
• When Apple asked for the phone back, Gizmodo demanded a written request that it could publish in order to corroborate the authenticity of the phone. (They may have also demanded an agreement by Apple not to prosecute; we may never know what side deals were made.)
• Gizmodo revealed the identity of the engineer who lost the phone but not the identity of the person who found it. Why Gizmodo found it necessary to "out" the engineer, I have no idea. There were rumors circulating that the phone was stolen from Apple, not lost, so perhaps Gizmodo thought that by naming the person who lost it, they would prove that it wasn't stolen. Possibly by "outing" the engineer, they thought that they were providing him some level of protection from retaliation by Apple. However, given everything else that's happened in this case, I think that Gizmodo was looking out for its own interests. In any event, they've managed to further damage the reputation of the engineer, who will now have to explain this event for the rest of his career.

The whole thing stinks, and it's not the first time that Gizmodo has played around at the edges and gotten burnt. You may remember a couple of years ago, when some Gizmodo correspondents took a gadget that turns off TV sets to CES in Las Vegas. They went around turning off displays in exhibitors' booths, sometimes in the middle of presentations, and took pictures of the carnage that resulted. That action got Gizmodo and its reporters banned from CES.

Gizmodo could have taken pictures of the phone and played with it, then voluntarily returned it to Apple without demanding a written request. It didn't have to name the engineer who lost the phone. It shouldn't have purchased the phone in the first place if it had a strong suspicion that the person who had it shouldn't have kept it. Scoops are wonderful, but when they involve breaking the law and helping to destroy the reputation of a person who probably would never have been publicly identified, it's no longer journalism and no longer deserves respect.

Why I Bought an iPhone 3G S Instead of a Palm Pre

The day after the iPhone 3G S was announced at Apple's Worldwide Developers' Conference, I ordered one from AT&T. The Palm Pre was released a few days earlier, and it has a number of features that I frankly prefer to the iPhone, including true multitasking, a very simple way of intelligently integrating (not just merging) contacts and managing email accounts. Most importantly, the Palm Pre has a hardware keyboard, while the iPhone's keyboard is on-screen.

The new iPhone 3G S does video, which the Palm Pre doesn't yet do, but what really clinched the deal for me was the 50,000 applications available for the iPhone, compared to the 20 or so that were available for the Pre at launch. I certainly didn't expect the Pre to have anywhere near the iPhone's application count at launch, but by severely limiting developer access to the Pre's WebOS SDK, Palm virtually guaranteed that its opening-day assortment of applications would be paltry.

The Palm Pre and WebOS are a very impressive platform, and I'm not going to speculate about how successful Palm will be long-term. However, Apple is well on its way to building the same kind of overwhelming network effects lead in the smartphone business that Microsoft has built in personal computers. No matter how good the Pre and subsequent models are, they probably won't be able to overcome Apple's lead in applications and installed base.

Palm needed to put a full-court press on developers from the day that the Pre was originally announced. Instead, it assumed that the functional superiority of the Pre/WebOS combination would overcome a lack of applications at launch. That was true for some customers, but as in the PC business, it looks like applications are driving purchase decisions.

Is Jobs's "Reality Distortion Field" fading away?

Today's "big" announcement by Apple just ended--new versions of the iPod Nano and Touch, and a new version of iTunes, plus some new headphones and a lot of chest beating about the App Store. Almost everything had been leaked weeks ahead of the presentation, and even if Apple had kept a lid on it all, there would have been nothing all that exciting.

The new pricing for the iPod touch isn't going to drive sales (if you're even mildly interested in the 3G iPhone, you're crazy not to buy one of those rather than an iPod Touch.) The revisions of the iPod Nano are nice, but no one is going to be lining up to buy one; at best, it'll be a good replacement for previous-generation Nanos. Apple seems to think that the new "Genius" feature in iTunes (a ripoff of Pandora) is going to generate more sales, but I disagree.

The net of all of this is somewhere between "feh" and "so?". Any other company would have made these announcements with a press release, and perhaps, a press conference. With an announcement like this one, the very fact that Jobs was involved actually increases the disappointment level.

The last really important announcement that Apple did was the original iPhone; compared to that one, today's announcement doesn't even merit a footnote.

Obligatory iPhone 3G Post

If you were standing in line outside an Apple store this morning to get your iPhone 3G, once you got inside, you couldn't get your phone activated...AARGH! Things got so bad that Apple employees started unbricking phones so that customers could at least leave the store and activate at home using iTunes. Apple pointed its finger at AT&T's activation servers, while AT&T pointed back at Apple's iTunes servers. According to this real-time blog from CNET, it's pretty clear that the problem was with Apple--AT&T's problem wasn't with activation, it was with running out of phones.

On the other hand, if you wanted to upgrade your first-generation iPhone or iPod Touch with 2.0 firmware, according to yet another CNET article, you often ended up with a bricked phone. Blammo!!!

For all of you who had the patience to wait a while to buy an iPhone 3G, or who simply couldn't care less, have a nice day.