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By Carl Howe

The Wall Street Journal last week raised a few Anywhere eyebrows with this paragraph at the end of an article titled Firms Hitch Wagons to iPhone. The paragraph that caused this fuss was as follows:

And those that have been sanctioned by Apple are finding out too late that they have guessed wrong about the depth to which Apple is willing to help them. Makers of location-based software expected to benefit from the new iPhone's global-positioning system. Yet they are finding out that Apple won't support "applications designed or marketed for real-time route guidance." The clause in the iPhone developer tool-kit agreement essentially voids months of work by TomTom NV and other navigation providers.

Could this be? Could Apple be an Anywhere spoilsport and refuse to allow location-based applications?

Now, being a registered developer, I have the software development kits [SDK] for both the Apple iPhone and Google Android [shameless research plug: Yankee Group clients should look for a Decision Note comparison of the two SDKs and how developers should choose between them to be published soon]. Unfortunately, the Apple SDK license terms are confidental, so I can't quote chapter and verse here (software license restrictions and end user license agreements are a rant for another post). However, I can provide my personal interpretation of Apple's legalese, which luckily isn't too tricky. Full disclosure: I am not a lawyer, and this opinion should not be construed as legal advice. Always consult your own attorney on legal matters.

Yes, the restriction noted by the Wall Street Journal exists, but the restriction isn't as severe as the WSJ implies. It's really all about the legal liability of location-based services, something too few companies or developers actually stop and think about.

The major points of the restrictions in clauses 3.3.7 through 3.3.9 of the license agreement are to prevent applications from:

  • violating consumer privacy with location data (big privacy liability there)
  • enabling stalkers (both bad karma and possible criminal accessory liability)
  • routing people or vehicles incorrectly (encouraging people to pay attention to their iPhone distracts them when they should be looking out the windshield; ask anyone who has into a bridge or river based on GPS directions), or
  • doing illegal things with location info (all the bad things that Apple legal didn't think of)

Personally, I find Apple's unwillingness to sign off on these types of applications without further scrutiny rather comforting. But does this leave GPS makers like TomTom (OTCPK:TMOAF) out in the cold? Of course not, because any serious GPS manufacturer:

  1. already has assessed and protected itself against this type of liability with liability insurance and other legal protections, and
  2. could negotiate a different licensing agreement from Apple for its products provided it accepted legal liability for its application.

So rest easy: you'll see location-based applications on the 3G iPhone. But expect those to come from companies like TomTom and Garmin (NASDAQ:GRMN) that actually know their Anywhere liabilities instead of from Joe's Homebrew GPS and Beer Company.

Source: Apple's 3 iPhone Considerations: Liability, Liability and Liability