Software July 31, 2009, 9:26PM EST

iPhone Apps: What Makes Apple Say No?

Recent app rejections, including Google Voice, have developers—and the FCC—asking Apple to clarify its criteria

Story Tools

James Montgomerie was shocked when he received a rejection from Apple (AAPL) in May. His iPhone e-reader app, Eucalyptus, had been blocked from iTunes because it contained "inappropriate sexual content." The former Apple developer couldn't believe anyone found his application pornographic. Described as "classics-to-go," Eucalyptus carried out-of-copyright books from the 1920s and earlier by authors such as Charles Dickens and Jane Austen. Apple sent Montgomerie a screen shot of the offending title—a Victorian-era translation of the Kama Sutra, an ancient Indian text on sexuality.

Apple began allowing independent developers to offer iPhone applications online in June 2008. But before any app can be offered for sale, it has to go through a vetting process that many say is unclear and cumbersome. Although some apps are barred because they are offensive to almost anyone—Baby Shaker invited users to rattle a virtual crying baby to death—others are nixed because they might upset political sensibilities. Freedom Time, which featured a countdown clock to the end of the Bush Administration, was nixed because "it would offend roughly half of our users," Apple CEO Steve Jobs said in a rare e-mail to the developer.

Other programs are rejected because they duplicate (or potentially compete with) Apple's iPhone software. On July 31 the Federal Communications Commission sent a letter to Apple questioning its rejection of Google Voice, a telephony application. Many analysts believe the service was blocked because it could have snatched revenue from Apple's exclusive wireless service provider, AT&T (T), by providing cheap call rates over Google's (GOOG) lines. AT&T denies any involvement in the move. Among the FCC's questions: Why was Google Voice rejected? What are the standards for acceptance and rejection?

Apple's Is the Only Monopoly App Store

Apple isn't the only smartphone maker that decides what can and can't be sold on its app store; BlackBerry maker Research In Motion (RIMM), Nokia (NOK), and Palm (PALM) do, too. The difference is that users of those smartphones can bypass those makers' app stores and download programs directly from the developers. Apple apps can be downloaded only from the iTunes App Store.

"The process is just very opaque," says Montgomerie. He had already invested almost a year of nearly full-time work on Eucalyptus, and the prospect of having wasted all that time persuaded Montgomerie to yield to Apple's demand to remove the Hindu classic. "I had to sell my soul a little bit, I guess."

Apple did not respond to requests for comment. But some analysts say the outcry over several dozen rejected apps is dwarfed by the opportunities Apple has created. "We hear about those developers because they are vocal. But there are 65,000 apps on iTunes right now, with more than 1 billion downloads," says Michael Gartenberg, vice-president at technology research firm Interpret.