The interwebs are abuzz over Jon Stewart calling out Apple as “The Man” for the search warrant that was executed on Brian Chen’s house. I love The Daily Show and normally agree with a lot of what I hear. On this topic, we happen to disagree.

Consider things from Apple’s perspective. Their secrecy is part of the appeal. Everybody wants to know what they’re going to do next, and the company does an excellent job of controlling the flow of information. They have a right to do this. They work within regulations and their shareholders are obviously happy.

So you’ve got this brand new iPhone in the works, and it’s impressive. It’s made of higher quality materials, build quality is going to go way up, the new CPU is much faster and more power efficient, it has a bigger battery and a higher resolution camera in addition to the new camera on the front. If you’re Apple, you want to keep these details secret. Less people want to buy this year’s model if next year’s is a couple months away. This is in contrast to cars, where the current model often becomes more attractive to a large segment of buyers, because it’s available at a discount. Apple doesn’t do discounts like that. The price on today’s model normally doesn’t change in the lead-up to new product. When new models are released, Apple will pay you the courtesy of upgrading your order (if you ask) if you placed it in the preceding 10 days, but if it’s day 11 you’re probably out of luck.¹ This is also perfectly legitimate. The result is less overstock, which means less discounting after the new model is out.

Leaking the new iPhone probably cost Apple millions in revenue. While it isn’t really a secret that Apple has an annual release cycle for iPhone, the previously-described effect is so strong that Apple is selling more iPhones today than it did during the holiday quarter. Think about that. Now that the forthcoming iPhone is common knowledge, I’m expecting that we’ll see a more pronounced dip in sales over the next month or so.²

The evidence to date suggests quite clearly that after the device was left at the bar, none of the people who handled it afterward did the right thing. The original finder³ didn’t make enough effort to return the device directly to Apple. He took money from Gizmodo, and handed it over. Gizmodo knew what they were getting, and they didn’t return it until Apple legal counsel asked for it back.

Leaving aside the lost sales from the current model, that prototype was assuredly one of a relatively small number of units. One-offs like that are normally costly to produce, on top of untold millions in research and development.

The long and short of it is that a crime occurred, and the police are obligated to investigate. Apple could probably intervene, but at this point in the game it isn’t fair to say Apple is going too far. Better to make an example of these fools as a warning shot to anyone else who might consider acting similarly. You can guarantee whatever money Gizmodo made from ad sales premiums when the story broke is but a drop in the bucket relative to what Apple lost by Gizmodo’s irresponsible behavior.

You might think Apple’s behavior is certainly reminiscent of The Man, but Cult of Mac made a rare good point about how things work at 1 Infinite Loop that lead me to think otherwise.

On the topic of AT&T, Mr. Stewart and I are one. Despite my overall disagreement with his arguments, the bit was hilarious.

* This post is a response to a comment by my good friend Josh Bernstein, on Facebook. I decided it was a little long to stick in a comment.

1. Unless you get a nice customer rep at AppleCare ↩
2. On the flip side, it’s probably fair to say that the anticipation for the new iPhone may indeed be higher than if Gizmodo hadn’t taken the actions it did. ↩
3. Now identified as 21-year old Brian Hogan of Redwood City, CA ↩

In its recent quarterly call, Apple announced iPhone sales of 4,363,000, “representing 88 percent unit growth over the year-ago quarter.” That’s an incredible accomplishment. The United States (and most of the world) is in the middle of the worst recession in recent times, yet the company famous for its logo tax managed to nearly double sales of a high-end electronic device. The iPhone is here, and it isn’t going anywhere.

And why should it? Make no mistake about it: the mobile phone landscape would look eerily similar to what it did nearly two years ago when iPhone crashed the party. No one in the general public was excited about handheld applications. Browsing the web was like a trip down memory lane in a 56k modem. Despite the general availability of high-speed mobile networks, innovation had simply disappeared in the mobile phone arena. A smart phone was something that ran some version of Windows Mobile, and it was generally a hulking mass of a device that required a pen that was always too small and entirely too easy to lose.

Apple has laid out a world-class game plan for how mobile phones should look, act, and – yes – cost. My mom, who sent her first email just this past year, knows how to zoom a photo on iPhone. It took her exactly two seconds to learn it. That’s the brilliance of what Apple has put together, and that’s why so many people have flocked to the platform. The need to use Objective-C and develop on a Mac hasn’t stopped thousands of developers from making thousands of applications. The billionth download was recently logged. Many people are making money on the device, and many more are clamoring to learn the tools in an effort to cash in.

The iPhone is good, no – great. It’s in a league of its own. ¹ And that’s the problem.

The level of interest in developing for the iPhone is so powerful, so overwhelming, that it may come to the overall detriment of mobile phone software innovation. Apple is set to capture a huge amount of the mobile market in the future. The general public now understands that real applications can run on mobile devices, and as far most people are concerned, if you want those applications you need to have an iPhone. Apple’s done a fantastic job with iPod, but the last thing we need in this market is an overwhelmingly dominant player. The best way to push innovation forward is strong competition, and Pre may just have what it takes to make this a two-party fight.

Palm’s Pre is decidedly anti-iPhone in a number of ways. Whereas most iPhone applications don’t run in the background, Pre’s webOS operating system assumes that many apps will not only run in the background, but will want the user’s attention. ² iPhone’s forthcoming push notifications will offer several ways to inform the user that an app wants his or her attention, but it requires servers on the developer’s side. That means many push-notification applications won’t work, or will work with a reduced feature set, when a network connection is not available. On Pre, a unified notification system not unlike Growl provides an efficient means for getting the user’s attention. More importantly, real background applications will allow for apps like alternative media players. How great would it be to let Pandora run in the background while browsing Safari? This will be possible on Pre.

Without question, the single biggest difference between the two devices comes in the form of their respective SDKs. iPhone applications are written in Xcode on Macs in Objective-C. Pre applications will be built on webOS’s Mojo WebKit-based platform, with no restriction on a developer’s platform of choice. HTML5, JavaScript, and CSS are the main players. While the SDK isn’t yet public, early feedback from the lucky few who have access suggests webOS apps will look and feel like native applications. The jury’s still out on what this all means for apps that wouldn’t be built using most of the core SDK (games), but it would be folly to assume Palm hasn’t considered the runaway success of casual gaming on iPhone.

Pre is important because it is the first real competitor to iPhone that has the possibility of matching it where it excels (aesthetics, look and feel, user experience), and blowing it away by offering features iPhone doesn’t yet have (background applications, data sync from multiple sources). The web-based nature of webOS means many thousands of modern web developers will instantly feel at home on the device. As a web application developer, I find the prospects incredibly exciting.

If Palm fails in this endeavor, the prospects for the mobile marketplace are somewhat disappointing. While Apple will no doubt continue to improve upon iPhone’s hardware and software, we need a company like Palm to offer a strong contrasting opinion. We need a company to say, “No! You can have background apps that won’t drain your batteries.” We need a company that will put standards-based technologies at the core of its OS.

Competition is a good thing, and I’m hoping for quite the battle. Anyone who uses a mobile phone benefits from the existence of iPhone, and that isn’t something that should be discounted. When I look back at other devices for which I’d paid $399+ in the past, the comparison is comical. It came out of nowhere despite years of rumors about what it might look like. It drove down the price of the crap we used to buy to “free” (with 2-year contract), and lowered the overall price point for high-end devices. Palm could one-up Apple with Pre, but they need to get it right where it matters. The SDK needs to be solid, and it needs to be exciting for developers. It needs to function as well as it looks. It needs a battery that doesn’t falter under the strain of multiple background apps. It needs tight integration with applications like iCal. Above all, it needs to be accessible to the general public.

Of course, at this point, I’d settle for a release date.

1. I’ve left Android out of this discussion because frankly, at this point, I question Google’s commitment to the platform. Having spoken with a number of people who own a G1, I hear a lot of “It’s great, but…” Right now, Android reminds me very much of Linux desktop: a capable option, but underdesigned, with too many rough edges. ↩
2. The only exceptions to this rule are apps written by Apple ↩

Not to be confused with the Google Mobile iPhone App, this application will let you initiate Google Voice calls directly from your iPhone.