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Apple on a warpath: Blocks Pre?s access to iTunes

Apple is at it again. The device manufacturer has made changes to its software in order to block Palm Pre's access to the iTunes store.

Palm is understandably upset over the situation, since its ability to link to iTunes was a selling point for the Sprint phone. According to The New York Times, Palm Pre claims that Apple is "misusing" standards that were put forth to foster interoperability between computers and devices via a USB connection.

"Part of Apple's value proposition lays in its ecosystem, which ties together the computer (Mac or PC via iTunes), the personal entertainment device (iPod), the phone (iPhone), and the home theater (Apple TV)," said Alex Spektor, an analyst at Strategy Analytics, Boston.

The link between iTunes and the iPod and iPhone is a critical one for Apple's business strategy, as it creates a natural bond between Apple's music, TV, film and application store and the device, encouraging consumers to buy entertainment from Apple.

To the consumer, iTunes integration provides easy media synchronization and creates uniformity in the user experience.

"ITunes does not naturally sync with non-Apple devices," Mr. Spektor said. "Typically, users of competitors' media players and phones have used third-party software to help with the task."

Research In Motion, for example, provides computer software called BlackBerry Media Sync to help its customers sync their music with iTunes.

These types of software are not possible to block, since they pull media files directly from the computer.

Palm's approach uses iTunes directly by identifying itself as an Apple player. It can be blocked with changes to iTunes, as Apple has done.

"It is difficult to comment directly on whether Apple or Palm is right in this case, as there may be background disputes of which the public is not aware," Mr. Spektor said. "However, as long as both companies fully comply with laws and technology standards, it is their right to tactically preserve whatever competitive edge they might have."

Palm Pre was so outraged by Apple's blockage that it filed a complaint with the U.S.B. Implementers Forum, a nonprofit formed to provide a support organization and forum for the advancement and adoption of Universal Serial Bus technology.

The complaint claims that Apple is preventing trade.

"The net neutrality debate, the browser wars, the old AT&T carter phone and this issue have one thing in common -- one party considers it is their prerogative to restrict a service or channel since they own it, while the other party takes the position that such activities limit innovation and thus fewer choices for the consumer," said Bonny Joy, analyst at Strategy Analytics, Boston.

Here is Palm's letter in its entirety:

Dear Directors:

I am writing on behalf of Palm Inc., a member company of the USB-IF, to notify you what Palm believes is an improper use of the USB Vendor ID number by another member company.

In early June, Palm launched the Palm Pre, the first phone built on Palm's innovative Palm webOS platform. One popular feature of the Palm webOS is media sync, which provides consumers with seamless access to their music, photos, videos and other content stored in iTunes. With this feature, consumers simply plug the Palm Pre into a USB port, select the Palm media sync feature, and automatically transfer their content from iTunes to their phones.

On July 15, however, Apple released an update to its iTunes software application that utilizes the USB Vendor ID number to prevent iTunes from automatically transferring content to any non-Apple USB device. When a USB device recognized by the host computer attempts to connect with iTunes, iTunes now checks the Vendor ID Number included in the USB device descriptor. If the Vendor ID number is anything other than Apple's Vendor ID number, iTunes will limit access. In response, Palm will shortly issue an update of its webOS operating system that will use Apple's USB Vendor ID number for the sole purpose of restoring the Palm media sync functionality. For all other purposes, the Palm Pre will continue to use Palm's Vendor ID.

Principles Underlying the USB-IF

One of the primary objectives of the USB-IF is to foster interoperability among USB-compliant products. This goal is reflected throughout the Restated Articles of Incorporation. For example, Article III provides that the USB-IF exists "[t]o develop and distribute specifications and other documents that augment, enhance or extend the USB Primary Specifications for the purposes of enabling and promoting increased interoperability and reliability among USB products"; "[t]o provide a forum and environment whereby the members of the corporation may meet to review requirements for product interoperability and general usability"; and "[t]o protect the needs of consumers, promote ease of use, and increase competition among vendors by supporting the creation and implementation of reliable, uniform, industry-standard compliance test procedures and processes which support the interoperability of USB-based products and organization because, without widespread interoperability, many of the benefits of using standardized (as opposed to proprietary) technologies are lost.

A related, and equally important, objective of the USB-IF Antitrust Guidelines further provide that "USB-IF and Participants, in connection with their participation in USB-IF, shall not attempt to prevent any person from gaining access to any market or customer for goods or services, or attempt to prevent any person from obtaining a supply of goods or services or otherwise purchasing goods or services freely in the market." The Antitrust Guidelines are expressly incorporated In the USB-IF Code of Conduct, which applies to all members of the USB-IF. Through these Guidelines, the USB-IF encourages fair competition between producers of USB-compliant products.

Apple's Use of Its USB Vendor ID as a Lockout Code

Over the years, those that have implemented the USB standard have clearly benefited from the interoperability and competition among devices fostered by the standard. For example, the explosive growth of the market for Apple iPods and iPhones has been attributed in significant part to Apple's decision to implement the USB standard for these products, rendering them compatible with PCs as well as Apple computers. However, benefits such as these will be short-lived if member companies turn to using USB protocols for other than their intended purpose. Unfortunately, Apple has done just that, opting to use its USB Vendor ID number to limit access to iTunes, in effect turning the USB Vendor Id number into a lockout code. This exclusionary use is not contemplated by the USB standard, which is clearly intended to facilitate interoperability between USB devices, not to regulare the content that flows between them. Moreover, it is inconsistent with the letter and the spirit of the USB-IF Membership Agreement, including the Antitrust Guidelines. Neither the USB standard nor the Membership Agreement should be interpreted or enforced to allow use of the USB Vendor ID number to limit access to applications on USB-compliant devices or to hamper competition among them.

Palm brings this matter to your attention in the interest of furthering the purposes of the USB-IF and because we believe the USB-IF should be aware of any attempt to us the USB standard, and in particular the USB Vendor ID number, in a manner contrary to the purposes of this organization.

Very truly yours,

Kevin Morishige
Senior Director, Product Technologies

Cc: Eric Anderson (Apple, Inc.)