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Douglas Rushkoff

iPhone's Bad Business

BS Top - Rushkoff iPhone Paul Sakuma / AP Photo Millions of users of the Apple’s wildly popular phone just found out it no longer works with office email systems. Did Steve Jobs’ company betray its users?

What a difference a little update makes. Users of Apple's iPhone models 3G and earlier got a rude awakening at work this past week: Their phones no longer work with their office's email systems.

It seems the culprit is the latest software update, 3.1, which—to make it simple—has forced Apple to now admit that it never really was compatible with Microsoft Exchange's encryption protocols. Before, it simply acted like it was compatible, without ever doing the processor-intensive number-crunching to actually encrypt the Exchange data that it downloaded, as it promised it was doing. The iPhone worked with Exchange, that much is true. But it did so by pretending to do something it couldn't. Or now won't.

The rather sudden and irreversible changes to the way people use their iPhones makes Apple look like a typical bad Californian passive-aggressive boyfriend.

So now, millions of business users who finally switched from the BlackBerry or whatever other PDA they happened to be using—the ones who wanted to look as cool as all those iPhone people who didn't work for Fortune 500 companies or big institutions and complained to their IT departments to make iPhones compatible with their companies' networks—are back at square one. They have to go back to a less hip phone, or go back to the Apple Store for the latest and greatest iPhone, the 3GS, which really truly does have the encryption required for enterprise use. (That, or IT departments have to turn off their Exchange systems' requirement for encryption-enabled devices, rendering their data more vulnerable.)

What's more, the 3.1 upgrade finally kills the iPhone's ability to be tethered to computers and used as a modem. While AT&T has always forbidden such use for fear of the burden on its network, a workaround was always a simple Google search away. But those paying full price for the phone, as well as European users, were always free to pick the carrier of their choice and then tether the phone completely legally—sometimes for an additional fee to their carrier. Now, presumably in an effort to prevent users from exploiting the workaround and getting modem service from AT&T, Apple has blocked tethering completely for everyone.

Apple is, no doubt, preparing a statement as I write this—something explaining that their phones really did work with Exchange all along. It's just that these new ones work with Exchange even better. And that their phones never really were supposed to be tethered, so this update doesn't cripple any documented capability. And, to their credit, Apple's update is at the very least fessing up to reality.

But for those who were hoping that Apple might be finally graduating from consumer products to genuine business capabilities, these latest switcheroos are sure to feel like a betrayal. Yes, their IT departments should have done more research into how the phones worked before approving them as Exchange capable. Or perhaps Microsoft should have risked the bad publicity and more rigorously researched the iPhone's compatibility with Exchange before issuing signed certificates to Apple for their phones. And anyone buying a phone to use an undocumented feature like tethering should understand they're in for some obstacles down the road.

Still, the rather sudden and, I might add, irreversible changes to the way people use their iPhones makes Apple look even more "like a typical bad Californian passive-aggressive boyfriend," in the words of one developer friend of mine. "They talk nice to get you in the sack, but then do all sorts of abusive stuff once they have you." Once you have upgraded your phone to 3.1, there is no going back. It's like one of those STD's that keeps on giving. Downgrading to 3.01 doesn't restore tethering capability or Exchange.

Like a lecherous boyfriend, Apple gives a wink and a nod to users, acting as if the company is on their side against Exchange or AT&T, but then shows its true colors once we're in bed with them.

The irony is that Apple is, for once, trying to play by the rules. The corporate rules, that is. Their Microsoft Exchange hack was not responsible networking, and led less-competent IT managers to sacrifice the security of their systems. Likewise, it's Apple's effort to make good on its promises to AT&T that has led it to cripple its phone's tethering capability, protecting one corporate alliance over all of its other consumers.

Update 3.1 may be remembered as the moment Apple chose sides. The company thinks it's ready for the big time, and hopes these moves will demonstrate its willingness to move like a player capable of delivering enterprise-scale solutions and hacker-proof protection for its corporate partners. In doing so, however, Apple may succeed in alienating its core consumers, and tarnishing its brand as the "people's" technology.

In fact, all these shenanigans are actually starting to make people wonder about what Microsoft, the apparent underdog, is working on. The new Zune may not be an iPod killer, but it does offer a clean interface, great industrial design, HD radio, and a subscription model for music, making it significantly less expensive for big users. And Microsoft's new OS, Windows 7, may finally be a worthy successor to XP, eliminating the clutter of Vista and letting users get to what they want to use without the fuss. All this, while remaining compatible with their IT departments' demands for scalability and custom implementations. It may prove easier for a company that knows enterprise software to provide consumers with what they want, than for a consumer company to meet the demands of enterprise users.

Or maybe Apple's users will rise to the brand's new mandate, stop thinking so "different," and just use the stuff the company makes for them as they're supposed to.

Douglas Rushkoff, a professor of media studies at The New School University and producer and correspondent for the PBS Frontline Digital Nation project, is the author of numerous books, including Cyberia, ScreenAgers, Media Virus, and, most recently, Life Inc., released this month by Random House.

For inquiries, please contact The Daily Beast at editorial@thedailybeast.com.


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September 18, 2009 | 8:45pm
Comments ()
Veronicaxy

Douglas you just didn't go into how hard it is to be 'exchange compliant' or 'exchange compatible'. MS knows what it's doing. It owns enterprise and it's going to hold onto it best they can.

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11:07 pm, Sep 18, 2009
pkimelman

That is absurd. Apple has full Exchange compliance with the MACs. People no longer need to use Outlook.
The problem with the iPhone is that they want to force people to keep buying the newer one (just like they have done with iPhone) and so they need a lure. The easiest way for Apple to create lures with iPhone is to disable features in the older ones. They have done this with apps that they now want to make themselves and sell, so they claim it is the apps problem due to compatibility.

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1:12 pm, Sep 19, 2009
Xntrk1

First Amazon's Kindle erases books customers paid for. Then they say they won't again, but the ability is still there. I guess you are supposed to pay 300 bucks for the Kindle, and TRUST the Corporation for free.

Now Apple disables programs so they can sell a new and supposedly 'better' [and more expensive] model. Yet again, they say this one really works as advertised. But that still leaves people with an expensive device that is useless for what they bought it to do.

Am I the only Luddite who has not jumped on the wireless wagon? Not only do the wireless devices allow the government to spy at will, but they allow companies to do the same - and to steal your money out of your pocket without even a sorry till they are caught.

Yes, wireless devices are nice in some cases. But at home, or to simply avoid downloading material to your computer before up loading it to an e-reader, they make no sense. At least the material you download on line is there till you erase it, or some one gets a court order to see what you have. I avoid making it too convenient for Corporations and the Feds to know what I am doing all the time.

Now, they offer to make your computer 'virtual', with all your information stored by the gods at Google or Microsoft. Thanks, but no thanks. I'll keep my own hard drive and back up to a different one. If it crashes, I'll know why, and how to fix it!

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12:25 am, Sep 19, 2009
roadhunter

Am I the only Luddite who has not jumped on the wireless wagon?

Yes, you are.

Not only do the wireless devices allow the government to spy at will, but they allow companies to do the same - and to steal your money out of your pocket without even a sorry till they are caught.

Put on the tinfoil hat now, and tell me how companies steal my money via wireless? Been wireless for 10 years, and haven't lost a penny.

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11:03 am, Sep 20, 2009
Matt572

"Been wireless for 10 years, and haven't lost a penny" ...what flawless logic, cause I've been alive for decades and I haven't been murdered. Sure, it's an extreme comparison, but they could both simply imply that no one's tried. Most people that have the means (the proper wireless tools and knowledge to do it) for electronic thievery don't necessarily have the will to do it. How long can that last? Look at your wireless devices today; and those from 10 years ago.

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10:43 pm, Sep 20, 2009
djanimaequeen

Wireless or wired. A crook who really wants your money will find a way to get it.

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11:56 am, Sep 21, 2009
Imonlyhere2hateU

Oh man.... that happen to me, it was like pandemonium possessed my iPhone =(

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7:07 am, Sep 19, 2009
winkingchef

I'm not sure the author understands what's going on here. The iPhone's original enterprise connectivity was a massive security hole. Apple fixed it and offers new hardware that supports the feature properly. What's the issue?

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8:01 am, Sep 19, 2009
WestVillager

The issue is never waste a chance to whine about Apple. Or sarcastically use the word hip.

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9:46 am, Sep 19, 2009
flyoverland

I updated to the new software the other day. As soon as I find a job, boy am I going to be pissed.

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9:24 am, Sep 19, 2009
WestVillager

lol.

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9:47 am, Sep 19, 2009
Schotman

Nowhere is the article or the speech was there anything that sounded like 'banishing' bonuses. Yet another example of the press spewing hyperboles to get reader attention ..without regard to the impact on the impressionable many. Or not.

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11:29 am, Sep 19, 2009
bbucol

Opinionated assertions about Apple's intentions with it's iPhone 3.2 upgrade are completely counterintuitive to how the company has always conducted itself and treated its customers.

What is far more likely is that young Douglas is ignorant of the back story on the effects of the upgrade, yet managed to sell his slam story as some sort of tech scoop to one or two technically unsophisticated but typically suspicious and gullible office shut ins over at the Daily Beast.

I'd say next time do a little due dilligence, kiddies.

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12:31 pm, Sep 19, 2009
Hawnzz

I'd buy one, but dislike AT&T. If I could use a different carrier, I'd have one in a minute. :(

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3:11 pm, Sep 19, 2009

This comment has been removed by The Daily Beast's editors.

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7:33 pm, Sep 19, 2009
DakLak

I'm a happy camper. I am still running Windows XP on my company computer; Linux at home.

Never buy a new model car, always wait 6 months. The 'Detroit Screwdriver', actually a hammer, was designed to help assemble new car models.

My hand/cell phone, horror of horrors, is now 6 years old; it has a pull-out antenna for real long distance calls to distant cell stations, doesn't take pictures or have a fancy colour screen but, boy, is it reliable! Neither abuse or even being dunked water has stopped it working.

Unlike iPhones it doesn't catch fire, its screen doesn't explode and the manufacturer has never blamed customers for what are undoubtedly design flaws, unlike Apple.

Let other people be your products guinea pig, then make your purchasing decision.

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12:47 am, Sep 20, 2009
elitmer

It seems that in spite of all their creative brilliance, Apple is doomed to repeat the same mistakes. Apple's iron-fisted control of it's hardware and software is going to come back and bite them. People don't like to be told what they can and cannot do with hardware they own. They don't like having their content censored by a corporate overlord. They want devices that work with their work.

With close to 20 new Android phones hitting the market in the near future, Apple is fooling themselves if they think they can rest on their laurels. Unlike the iPhone OS, Android is completely open and uncensored. You will have dozens of phone designs to choose from. And if you don't know anything about Android you should check out the video reviews on the net. It adopts the best qualities of the iPhone OS and adds a lot more.

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1:49 pm, Sep 20, 2009
politico83

Yah open and completely uncensored has worked wonders for Linux's market share. Oh wait....

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1:39 pm, Sep 21, 2009

This comment has been removed by The Daily Beast's editors.

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1:58 pm, Sep 20, 2009
DaVinci5

Doug, you toss around phrases like "burden their network" as if that were a minor annoyance. If there were still a viable tethering hack and everybody started exploiting it, don't you think the "burdened" network would then be a burden to the rest of us who just want to make a freakin' call? And by the way, I'm in Hawaii, in the jungle, and I depend on cell networks for my main Internet connection. And I pay good money for the privilege that you seem to want everybody in America to get for free. I'm glad that Apple is no longer allowing you to take my bandwidth without paying for it. You know when you take something that belongs to someone else, that's called stealing.

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3:09 pm, Sep 20, 2009
jomama

I gave my iPhone up after a week to go back to my BlackBerry occasional iPod combo, which is utterly superior in terms of function. The BlackBerry is weak on apps an internet, but those just aren't important in the mobile space because the bandwidth and other key infrastructure elements are not there. What nobody ever wants to talk about is how the more Apple makes noise, the more BlackBerry continues to outsell them. They actually work ...

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2:13 am, Sep 21, 2009
politico83

Except that the market share is going the other way. If you look at the Q2 year over year numbers from Gartner the iPhone has increased its marketshare 375% year over year (going from 2.8% to 13.3%) while RIM has stayed more or less flat going from 17.3% to 18.7% (or a 9% year over year gain). That most certainly doesn't look like anything resembling a big move to blackberry.

Also BB has the advantage of being on all carriers across dozens of phones vs 1 carrier and 2 models of the iphone. Given the acceleration I would expect the iphone to have outpaced the BB by this time next year.

The BB does NOT work well at all, the mobile browser is a joke, the OS is crap, the app store is inadequate ect. That Blackberry is to the iphone what the Zune is to the ipod touch, it would be great in a world without apple, but compared to the world with the iphone/ipod in it they both look like rather limited old tech.

And keep telling yourself the mobile browser doesn't matter out in the world, I use my iphone constantly everywhere I go to the tune of 5 GBs a month, its amazing and once you have it almost noone goes back.

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1:38 pm, Sep 21, 2009
djanimaequeen

I love my iPhone (and the excellent customer service I always receive from Apple) and can not imagine ever going back to "stupid phones". They're not made for work they are for personal use. All the problems you outlined are what you get when you use a device incorrectly. It's completely idiotic to on one hand say that you are using the device on an unauthorized carrier then complain that the update messed up your service. Boo hoo. If you want the phone then get an AT&T plan, if you don't like AT&T(which I don't blame you if you do) then get a uncool blackberry. How hard is that?

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12:12 pm, Sep 21, 2009
franpi99

While it might be an understatement to say that Apple didn't handle the transition to OS 3.1 very well or fully explain the ramifications of updating, they are not completely at fault. There's much more here than the author would like you to believe and despite the simplistic view he's chosen to espouse, Exchange compliance - or should I say Exchange policy - isn't an off/on proposition.

Exchange policy for mobile devices is handled by something called Exchange ActiveSync (EAS) and is separated into server-side policy and client-side (the mobile device) policy. Unlike in other environments, the server can send out any policy it wants, but implementation is up to the client.

As such, 3rd parties that licence EAS, like Apple, are free to implement as many of the policy controls as they wish, and still be 'Exchange compliant'. This is by design. The problem is that phones that don't support a certain policy control that is activated on the server side, simply won't work. This problem is common to all phones (no open standard exists for this) and is compounded by the fact that Microsoft continues to add new policy controls as it sees fit. For example, it wasn't until Exchange 2007 that data encryption (the emphasis of this article) made its debut in EAS as a default, along with other policy controls. As a result, you have the case where WinMo 5.0 phones won't work if the newer policy controls are activated. This is a Microsoft phone, mind you. The reason iPhones suddenly stopped working was because OS 3.1 began to report client-side policy back to the server, rendering them useless if data-encryption was enabled. Hence, it wasn't untruthful for Apple to advertise compliance with Exchange, WITHOUT supporting data encryption, as happens with other mobile devices, not least, the Palm Pre. Apple never advertised such support in the 3G.

I imagine this won't be the end of compatibility problems. We'll continue to see them as long as a single company controls the landscape of mobile syncing and is able render hundreds of devices obsolete with a single flick of the wand.

It's obvious after reading several articles from this author concerning Apple that his own personal bias against the company simply makes his points sensationalist at best and untrue at worst. This is exactly the kind of unsubstantiated misinformation that dupes the non-tech inclined or those that are simply too lazy or gullible to check the information for themselves.

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4:40 pm, Sep 21, 2009
unbesteveable250

Just create a dummy gmail account for free, set up a rule in your email server to forward all email to the gmail dummy account and always "reply to all" on your iPhone. It's not ideal but it's pretty easy for a patch, also gives you a perfect "shadow" to backup all your work emails as gmail never deletes any emails and it has virtually unlimited server space.

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4:45 pm, Sep 21, 2009
rushkoff

That one is clever, and profoundly simple. I suppose it doesn't fully solve MS Exchange compatibility, but if the stuff forwards, it's not really a problem.

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8:29 pm, Sep 21, 2009
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iPhone's Bad Business

by Douglas Rushkoff

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