I’ve been working on a new book that explores the rise of evasive entrepreneurialism and technological civil disobedience in our modern world. Following the publication of my last book, Permissionless Innovation: The Continuing Case for Comprehensive Technological Freedom, people started bringing examples of evasive entrepreneurialism and technological civil disobedience to my attention and asked how they were related to the concept of permissionless innovation. As I started exploring and cataloging these cases studies, I realized I could probably write an entire book about these developments and their consequences.

Hopefully that book will be wrapped up shortly. In the meantime, I am going to start rolling out some short essays based on content from the book. To begin, I will state the general purpose of the book and define the key concepts discussed therein. In coming weeks and months, I’ll build on these themes, explain why they are on the rise, explore the effect they are having on society and technological governance efforts, and more fully develop some relevant case studies.

Key Concepts Defined

• Evasive entrepreneurs – Innovators who don’t always conform to social or legal norms.
• Regulatory entrepreneurs – Innovators who “are in the business of trying to change or shape the law” and are “strategically operating in a zone of questionable legality or breaking the law until they can (hopefully) change it.” (Pollman & Barry)
• Technologies of freedom – Devices and platforms that let citizens openly defy (or perhaps just ignore) public policies that limit their liberty or freedom to innovate.
• The “pacing problem” – The gap between the ever-expanding frontier of technological possibilities and the ability of governments to keep up with the pace of those changes.
• Technological civil disobedience – The technologically-enabled refusal of individuals, groups, or businesses to obey certain laws or regulations because they find them offensive, confusing, time-consuming, expensive, or perhaps just annoying and irrelevant.
• Innovation arbitrage – The movement of ideas, innovations, or operations to those jurisdictions that provide a legal and regulatory environment more hospitable to entrepreneurial activity. It can also be thought of as a form of “jurisdictional shopping” and can be facilitated by “competitive federalism.”
• Permissionless innovation – As a general concept, it refers to Rear Admiral Grace Hopper’s notion that quite often, “It’s easier to ask forgiveness than it is to get permission.” As a policy vision, it refers to the idea that experimentation with new technologies and business models should generally be permitted by default. Permissionless innovation comes down to a general acceptance of change and risk-taking.

Themes of the Book

The book documents how evasive entrepreneurs are using new technological capabilities to circumvent traditional regulatory systems, or at least put pressure on public policymakers to reform or selectively enforce laws and regulation that are outmoded, inefficient, or illogical. Evasive entrepreneurs pursue a strategy of “permissionless innovation” in both the business world and the political arena.  In essence, they live out the adage that, “it is easier to ask forgiveness than it is to get permission” by creating new products and services without necessarily receiving the blessing of public officials before doing so.

Evasive entrepreneurs are taking advantage of the growth of various technologies of freedom and the corresponding “pacing problem” to create new goods and services or just decide how to live a life of their own choosing. We can think of this phenomenon as “technological civil disobedience.” The technologies of freedom that facilitate this sort of civil disobedience include common tools like smartphones, ubiquitous computing, and various new media platforms, as well as more specialized technologies like cryptocurrencies and blockchain-based services, private drones, immersive tech (like virtual reality), 3D printers, the “Internet of Things,” and sharing economy platforms and services. But that list just scratches the surface.

When innovators and consumers use new tools and technological capabilities to pursue a living, enjoy new experiences, or enhance their lives and the lives of others, they often disrupt legal or social norms in the process. While that can raise serious legal and ethical concerns, evasive entrepreneurialism and technological civil disobedience can have positive upsides for society by:

• expanding the range of life-enriching—and even life-saving—innovations available to society;
• helping citizens pursue a life of their own choosing—both as creators looking for the freedom to earn a living, and as consumers looking to discover and enjoy important new goods and services; and,
• providing a meaningful, ongoing check on government policies and programs that all too often have outlived their usefulness or simply defy common sense.

For those reasons, my book will argue that we should accept—and often even embrace—a certain amount of evasive entrepreneurialism and technological civil disobedience. I am particularly excited by the last point. In an age when many of the constitutional limitations on government power are being ignored or unenforced, innovation itself can act as a powerful check on the power of the state and help serve as a protector of important human liberties. Over the past century, both legislative and judicial “checks and balances” in the United States have been eroded to the point where they now exist mostly in name only. While we should never abandon efforts to use democratic and constitutional means of limiting state power—especially in the courts, where meaningful reforms are still possible—the ongoing evolution of technology can provide another way of keeping governments in line by forcing public officials to constrain their worse tendencies and undo past mistakes. If they fail to, they risk losing the allegiance of their more technologically-empowered citizenry.

But evasive entrepreneurialism and technological civil disobedience can have serious downsides, too. We should explore how to address the challenges associated with this more turbulent and sometimes dangerous world. In doing so, however, technological critics and public policymakers should also appreciate how once any particular innovation genie is out of its bottle, it will be increasingly difficult to stuff it back in. Worse yet, attempts to do so can often result in a “compliance paradox,” in which tighter rules lead to increased legal evasion and intractable enforcement challenges. Thus, more flexible and adaptive technological governance mechanisms will be needed.

In coming essays, I will discuss some prominent examples of these trends that are developed at length in my book, I will also do a deeper dive into some of the interesting ways governments are responding to these developments using what Phil Weiser refers to as “entrepreneurial administration,” or what others call “soft law” mechanisms. As Weiser notes, “[t]he traditional model of regulation is coming under strain in the face of increasing globalization and technological change,” and, therefore, governments must think and act differently than they did in the past. And they are already doing so. Even in an age of expanding evasive entrepreneurialism and technological civil disobedience, governments can shape the evolution of technology. But that cannot be done using the previous era’s technocratic, overly-bureaucratic, and top-down regulatory playbook. New policies and procedures will be needed for a new era.

Why do mobile carriers sell phones with a subscription?  My roommate and I were debating this the other night.  Most other popular electronics devices aren’t sold this way.  Cable and satellite companies don’t sell televisions with their video service.  ISPs don’t sell laptops and desktops with their Internet service.  Bundling phones with mobile service subscriptions is pretty unique.  (The only mass-market analogs I can think of are satellite radio and GPS service.)

Why might this be?  Some might think that US carriers need control over the phones sold to their customers because roughly half of US subscribers use GSM phones (AT&T and T-Mobile) and half use CDMA phones (Verizon and Sprint), but that can’t be the reason because GSM is the standard in Europe yet bundling phones with subscriptions occurs.

Some say it occurs because it benefits carriers at the expense of consumers.  A law review article written a few years ago said bundling profitably exploits the misperceptions of consumers and the value they place on mobile services.  Tim Wu has said that selling phones is an anticompetitive response that allows carriers to control the platform and disable features (WiFi, Bluetooth, VoIP) that might eat into the carriers’ existing revenue streams.  But even if that’s true I don’t think that’s the whole answer.  If network services have that much control over the devices used for their services, why don’t cable, satellite, and Internet service providers sell TVs and computers that only work with their service?  At the very least, if we assume, as Wu does, that carrier control removes features consumers really want, consumers could simply purchase phones directly from phone makers–Apple, Motorola, Samsung, LG–with full functionality intact.

I don’t know the best answer, and maybe commenters can chime in, but I suspect phones and contracts are primarily sold together because of the engineering challenges presented by a device using radio spectrum.   (This would explain why GPS and satellite radio service providers also bundle devices with service.)  Different carriers purchase licenses to use different swaths of spectrum, and these different frequencies require different radio receivers.  Phones, then, need to have radios installed that are tailored for the particular carrier.

In any case, throughout most of the world, phones are sold with subscriptions.  Some on the left, like Wu, say that bundling shouldn’t be permitted because it enables large carriers to exclude competitors and remove functionality consumers want.  To that end, he proposes regulations that require all handsets to work with all carriers.  Despite these objections, I’ll push back on the claim that consumers are being duped or that competition is seriously harmed.  Bundling handsets with subscriptions has several pro-competitive and pro-consumer justifications.

1.  Acts as an installment plan

This may be the most powerful reason selling phones with subscriptions is near-universal:  consumers like it.  Modern smartphones are expensive consumer products costing hundreds of dollars.  Wherever you see expensive consumer products (home appliances, furniture, computers, clothes) you find retailers offering installment plans so that consumers don’t have to pay hundreds or thousands of dollars up-front.  By locking consumers into a two-year contract, carriers can offer heavily subsidized advanced handsets–that they usually sell at an initial loss–and charge more for services over two years.

Consumers seem to prefer bundling since it acts as a de facto financing agreement.  Noncontract prepaid plans are offered by every US carrier, yet the vast majority of Americans still use post-paid plans with contracts in large part because the (subsidized) phones offered are so much cheaper and more attractive deals.  (See my prior post on the subject.)  Further evidence that consumers really value this installment plan option comes from Belgium, where bundling phones with subscriptions was illegal years ago.  That all changed in 2008 when the iPhone 3G came out.  Belgians complained about the fact that their iPhones started at €525 when their neighbors, like those in the Netherlands (who allowed bundling), could get a subsidized phone for as little as €1.  Within a year, with support from a competition minister, the law was changed to allow phones to be sold with subscriptions.  Predictably, the up-front costs of Belgian phones subsequently dropped as carriers subsidized the phones, and broadband penetration increased.

2.  Reduces transactions costs for consumers

Consumers also benefit from having a one-stop shop for their mobile needs.  Instead of needing to go to a phone retailer like Best Buy and then to a carrier’s retail store, consumers can get everything at the carrier’s retail store.  This may sound like a small benefit, but I imagine this especially benefits rural Americans who don’t have the retail options city-dwellers do.

3.  Aids carriers’ marketing and improves competition

It’s probable that bundling phones with subscriptions makes carriers more competitive.  There’s a textbook antitrust justification for why this is true.  Vertical contracts with suppliers aligns the interests of the retailer (carrier) with the supplier (phone maker).  DROID is a good example.  It’s a brand used by Verizon to market higher-end Android smartphones to tech-savvy early adopters.  This is a case of vertical restraints that prevent free-riding on Verizon’s brand promotion since no other carrier can offer DROID phones.  By most accounts, creating the DROID brand was a lucrative marketing move that helped Verizon’s Android phones compete with iPhones.  While DROID is probably the most successful example, all carriers have phones they market and sell exclusively.

4.  Improves carriers’ bargaining power with handset makers (and improves phones)

Selling phones with subscriptions allows carriers to strengthen their position in the value chain.  Carriers don’t want to be passive bit-pipes.  They know crushing price competition between carriers would result.  (Not to mention, being “dumb pipes” would make carriers more susceptible to net neutrality rules.)  Carriers are already being squeezed by handset suppliers, namely Apple, with high prices, so it’s to their benefit to make the handsets complementary to a specific network and not easily interoperable with other carriers.  And by selling differentiated handsets to their customers, the carriers demand innovative handsets from suppliers to differentiate their brand from other carriers and make their network ecosystem attractive to consumers.  If phones worked on all networks, a mandate Wu and others seek, each carrier’s demand for innovative phones from their suppliers would subside.  (Then competition would be driven by consumer demands, but it’s my impression that phone makers prefer to deal with carriers.  Responding directly to consumer demands would tend to fragment the hardware market even more than the existing market, which would add to their costs.)

5.  Smooths revenue streams for carriers (and improves networks)

Finally, locking consumers into a two-year contract, with a subsidized phone as a carrot, gives some predictability to carriers’ revenue streams.  Lumpy revenue streams and high churn is a killer for long-term network investment plans.  Without the ability to sell phones with subscriptions, churn rates would be much higher since few customers would want to be in a long contract.

This is what happened in Finland for years, when regulators banned bundling.  After having one of the best networks when cell phones first became popular in the late 1990s, there was intense price competition for voice and text.  And while Finnish prices were low, the investments in a 3G data network fell far behind other countries.  No bundling led to very high churn rates and made price competition–not advanced services like broadband–the focus of carriers.  Seeing that the lack of network investment was brought on by the ban on bundling, the Finnish equivalent of the FCC repealed the anti-bundling law in 2005.  With the new ability to lock customers into contracts, phone prices fell and network investment into mobile broadband improved.

I expect selling phones with subscriptions will continue for the foreseeable future, absent regulation.  And, for the reasons I’ve outlined, the ability to sell phones with subscriptions is likely a good thing for consumers and the industry.

Finally, though, I’ll note that inexpensive high-end smartphones could upset this entire bundling regime.  Cheap phones would mean carriers are less able to lock consumers into contracts.  We’re not there yet, but phones like the LG Nexus 4–an unlocked high-end Android starting at $300–indicates the day may come when consumers can’t be bribed into contracts by subsidized phones any longer.  Consumers, at that point, will prefer to pay full price up-front and have the ability to switch carriers at any time.  I don’t know how the radio engineering issues would be overcome, but this would be a major disruption of the wireless market and would have some ambiguous effects on competition, network investment, and consumers.  And, it’s important to note that we may enter Wu’s desired world of phone interoperability without regulatory mandates.

There’s been a resurgence in interest in non-contract (prepaid) phone plans and MVNOs in tech reporting lately, which makes sense given recent market dynamics.  Prepaid subscriptions number over 100 million, are now 25% of the mobile subscriber market, and Ars Technica recently reported that post-paid subscriptions declined for the first time ever in mid-2012.  Prepaid is definitely attracting people other than the usual lower-income folks, students, and the tech-savvy, who have the patience (or need) to navigate the hurdles prepaid sometimes presents.  The prepaid market has come a long way since Adam wrote about Straight Talk three years ago, and as one of the newest customers of Straight Talk—an MVNO that leases their networks from the Big Four carriers—I’d like to weigh in on these prepaid market challengers.

This post is mostly inspired by a conversation I had with a telecom expert at a recent event.  I asked her if she thought Americans would, like the Europeans have, shift towards prepaid in the next few years.  I was optimistic but she didn’t think Americans would go to a prepaid model anytime soon.  (She did say, however, that some carriers would prefer we switch to a prepaid model.)  So why hasn’t the US market shifted towards prepaid plans like much of the world?  I suspect if we polled economists, carriers, and tech writers, most would agree that prepaid is a better model.  It’s almost always cheaper to use a prepaid plan and you can avoid a two-year contract.  So why hasn’t there been even more adoption of prepaid?  I offer a few possibilities from the demand side (there are likely supply-side issues too, but let’s save that for another day).

1.   Crappy phones

Perhaps this is a symptom of weak demand for prepaid, not a cause, but the sub-par nature of many phones offered by prepaid carriers is certainly a deterrent for many people.  Prepaid evokes images of smartphones your grandma would be embarrassed to own and clunky feature phones.  Prepaid plan customers tend to be budget-conscious and don’t need the newest, most advanced hardware, so this may be a demand issue – if prepaid carriers offered nice phones, few would purchase them.

But prepaid does not mean you’re stuck with a lame phone.  (Straight Talk has some respectable smartphones, but most can be described as “entry-level” at best.)  Consumers willing to do a little research can have their cheap plan, no contract, and a good phone.  Before moving to Straight Talk from AT&T, I made sure I bought a phone that I’d be happy to use for awhile.  I purchased an unlocked Google Galaxy Nexus, popped in the activated Straight Talk SIM, and a few minutes later I was up and running.  Really, any consumer with an unlocked or already-purchased GSM phone doesn’t need to sacrifice phone quality by moving to a prepaid MVNO.  Likewise, I imagine consumers with CDMA (Sprint and Verizon) phones could also enjoy their phone of choice in prepaid, which brings me to my next reason I believe consumers don’t flock to prepaid….

2.   Two Technology Standards

Particularly when switching to an MVNO like Straight Talk, which leases networks from both CDMA and GSM carriers, figuring out which prepaid plan suits your current phone can be a deterrent.  The US is unique in that neither GSM nor CDMA has prevailed as the dominant technology in mobile phones.  Even the four major carriers mirror this phenomenon.  Sprint and Verizon are CDMA, AT&T and T-Mobile are GSM.  I suspect your average consumer doesn’t want to shop around and investigate whether they can bring their phone to, say, Virgin Mobile, or whether the Straight Talk or MetroPCS network is compatible.  This dual-standard problem may lessen in the next few years, however, if all carriers shift to voice-over-LTE.  If that does happen, we can expect more folks to switch out of two-year contracts since another hurdle is removed.

3.   Sticker Shock to Unlocked Phones

Many Americans have spent their phone-owning lives on post-paid plans, enjoying the subsidized phones they receive in exchange for a binding two-year contract.  Of course, the phone is not truly cheaper; the costs are simply spread out over the two-year contract, which you can get out of only at great expense.  Nevertheless, paying $700 -$900 for an unlocked iPhone 5 knowing that it’s available (subsidized) with AT&T for $200-$400 is daunting.  Even I wasn’t immune to this irrationality.  While I would have liked a Galaxy S III, and it costs around $200 when offered by AT&T, it’s $800 when not subsidized by a carrier.  At $350, my Galaxy Nexus was much less painful (and comes with Jelly Bean).  I’m not sure this sticker shock effect is going away soon.  Subsidized phones are an established norm in the US, and until we become accustomed to the truer cost of our phones, most will be reluctant to drop several hundred dollars on a phone, even if it means their monthly phone bill is cut in half, or more.

There may be other reasons people aren’t fleeing to prepaid.  Retail operations for smaller carriers seem meager (Straight Talk is an exception since they’ve paired up with Walmart for distribution.)  The chipset in your phone might not allow you to change carriers.  I’ve seen rumors on online forums that the larger carriers prioritize their own traffic over that of the MVNOs they lease to, which will degrade service quality.  And customer service may be more of an issue with prepaid carriers as well (I had one minor issue here during activation).  But for me, a month into my Straight Talk switch, I don’t plan on going back to expensive two-year contracts anytime soon.  I like having my HSPA+ phone, paying only $45 per month for (basically) unlimited data, text, and minutes, and no contract.

Five years into a recession, these budget-friendly plans should only become more popular and should provide some effective price competition to the major carriers.  It will be interesting to see how the major carriers respond to these prepaid challengers if trends continue.  After years of benign neglect of prepaid customers (I think all major carriers have small prepaid offerings), I doubt they’ll stand for the cannibalization of their post-paid subscribers to the MVNO carriers they lease networks to.  And it seems the major carriers are becoming interested in capturing budget-conscious consumers, if the proposed T-Mobile – MetroPCS merger is any indication.  Time will tell.

Two weeks ago, I penned a column for Forbes about the astonishing rise and fall of BlackBerry (“Bye Bye BlackBerry. How Long Will Apple Last?”), which somehow became the most widely-read and retweeted thing I’ve ever written in my life. I argued that BlackBerry’s story — indeed, the story of the entire U.S. smartphone sector — is the living embodiment of Schumpeterian creative destruction. Joseph Schumpeter’s “perennial gales of creative destruction” are blowing harder than ever in today’s tech economy and laying waste to those who don’t innovate fast enough, I argued, and nowhere is that more true than in the smartphone sector. I noted how, just five years ago, “BlackBerry” was virtually synonymous with “smartphones” and was considered one of the tech titans that seemed destined to dominate for many years to come. But now the BlackBerry’s days appear numbered and its parent company Research In Motion Ltd. is struggling for its very survival.

But there’s another company that I ignored in that essay that was also perched atop the mobile handset hill for a long time: Nokia. Here’s the horrifying opening lines from a Wall Street Journal story today about the company (“Nokia Crisis Deepens, Shares Plunge“):

Nokia Corp., long the biggest name in the cellphone business, is scrambling to stay relevant in the smartphone age. On Wednesday the company warned things will get worse before they get better, saying that competitors are rapidly eating into its sales in emerging markets such as China and India. Nokia also said its newest phone in the U.S. had a software glitch that is preventing some users from connecting to the Internet, marring its attempt to fight into the world’s most important smartphone market. The company’s American depositary shares slid 16% to a 15-year low of $4.24 in New York. Its market capitalization now stands at $16 billion, down from $90 billion five years ago.

It gets worse from there. The article continues on to document Nokia’s gradual slide and notes that, “like BlackBerry maker Research In Motion Ltd., Nokia is trying to re-establish its relevance in a market dominated by Apple Inc.’s iPhone and Google-powered devices. Both Nokia and RIM are working on new devices they hope will make a splash, even as Apple and Android work on improvements of their own.”

To put into context how remarkable this rapid reversal of fortunes is, you need to try remember what life was like just five years ago:

• The iPhone and Android had not yet landed.
• Most of the best-selling phones of 2007 were made by Nokia and Motorola.
• Feature phones still dominated the market; smartphones were still a luxury (and a clunky luxury at that).
• There were no app stores and what “apps” did exist were mostly proprietary and device or carrier-specific.
• There was no 4G service.
• And regulatory advocates like Tim Wu and the New America Foundation were running around saying that the FCC needed to pursue massive regulation of the cellular industry for a variety of silly reasons.

In those now-seemingly Mobile Dark Ages, those competing for power included Nokia, Motorola, LG, Sony, BlackBerry, Palm, and Microsoft, among others. Some pundits thought the idea of entry by anyone else — especially Apple and Google — was simply silly. Here are some of the more entertaining predictions I unearthed when researching my Forbes piece two weeks ago:

• In December 2006, Palm CEO Ed Colligan summarily dismissed the idea that a traditional personal computing company could compete in the smartphone business. “We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.”
• In January 2007, Microsoft CEO Steve Ballmer laughed off the prospect of an expensive smartphone without a keyboard having a chance in the marketplace as follows: “Five hundred dollars? Fully subsidized? With a plan? I said that’s the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good e-mail machine.”
• In March 2007, computing industry pundit John C. Dvorak argued that “Apple should pull the plug on the iPhone” since “There is no likelihood that Apple can be successful in a business this competitive.” Dvorak believed the mobile handset business was already locked up by the era’s major players. “This is not an emerging business. In fact it’s gone so far that it’s in the process of consolidation with probably two players dominating everything, Nokia Corp. and Motorola Inc.”

Of course, we now know how this story turned out. Today, less than five years after these predictions were made, Nokia’s profits and market share have plummeted and a struggling Motorola was purchased by Google last summer. Meanwhile, Palm appears dead and Microsoft is struggling to win back all the market share it has lost to Apple and Google in this arena. Of course, Microsoft has partnered with Nokia to try to make a go of it together. Five years ago, the Antitrust Gods would have likely thrown down the hammer and stopped such a deal. Today, many analysts wonder if MS has made yet another strategic blunder by partnering with Nokia. Their new Lumia 900 is a very impressive device, but it’s already been plagued by design flaws. Moreover, as today’s Journal article notes, “It’s still far from clear whether Nokia’s effort will be enough to convince many customers that its smartphones are a good alternative to the iPhone and Android devices. Part of the reason: iPhone and Android offer a much greater array of ‘apps’ built by third-party developers.”

Meanwhile, wireless carriers (Sprint, T-Mobile, Verizon, AT&T, etc.) are suffering from whiplash as they wonder how Apple and Google flew right by them to become the focus of all the headlines and the darlings of Wall Street analysts. This is all part of the ongoing “Gravitational Shift” we are witnessing in the mobile ecosystem, as economist Tom Hazlett argues in a Barron’s oped this week. “The telecommunications industry’s center of gravity has shifted,” Hazlett noted. “The edge is squeezing the core.” Hazlett continues on:

Competition among the physical networks spins profits out to the virtual networks. Apple’s value (from iPhones and iPads) to the wireless industry was estimated in early February at $248 billion—about 92% of the enterprise value of the entire U.S. mobile-network sector. Apple owns not a single base station or wireless license; it builds no networks. And yet it has emerged, in four short years, as “dominant in the mobile market”—an unqualified assessment offered by Walter Isaacson in his superb Steve Jobs biography.

I cannot find a more dynamic, Schumpeterian market on Planet Earth than today’s mobile marketplace. Everything and everyone has been upended in just 5 years. Not even Schumpeter could have imagined creative destruction on this scale.

Nokia after the iPhone

Arik Hesseldahl has an interesting piece in Business Week about Apple’s control of the iPhone App approval process in which he asks: “Is a smartphone gatekeeper needed?” Plenty of people don’t think so and have raised a stink about Apple trying to play that role for the iPhone. It certainly could be true, as some critics suggest, that Apple is being too heavy-handed on occasion when rejecting apps, but it’s always easy for those of us on the outside of the process to think that.  Hesseldahl notes that:

it’s tempting to consider the implications of a less hands-on approach, as is the case with Macs, Microsoft (MSFT) Windows PCs, or other smartphones, including those running the Google (GOOG)-backed Android operating system. The software market for personal computing has existed in this way for nearly three decades, and while there have certainly been some problems along the way, I’d argue that overall we’re better off without Microsoft or Apple or some other organization approving software applications before they’re released to the market. PC users have learned to be careful about what they put on their computers through unhappy trial and error.

But he also notes that there is another side to the story:

My hunch is that greater vigilance is needed with smartphones, in part because they’re a relatively recent phenomenon. The iPhone has been on the market only 28 months. Users take them everywhere and are quickly inserting them into daily life in ways the personal computer never could have fit. Malware on smartphones could do significantly more damage than malware on a PC. Imagine a nasty application that records every word you speak—both on and off the phone—without your knowledge, and then e-mails the audio to a stranger. Or picture one that surreptitiously tracks your movements and sends them to a stalker.

Hesseldahl interviewed Phil Schiller, Apple’s senior vice-president for worldwide product marketing, for his piece and Schiller confirmed that malware [think iPhone worms] and and other safety & security concerns topped the list of problems that Apple was trying to head-off by managing the applications process. There’s also various types of illegal content that Apple has to contend with.

Anyway, my only interest in bringing this to everyone’s attention is because I have spent the last few years debating a growing crop of academics (Zittrain, Lessig, Wu) and policy shops (Public Knowledge, Free Press, etc) who suggest that proprietary devices and app stores constitute the revival of online “walled gardens” from the early Internet era (like AOL, Prodigy & CompuServe).  Personally, I don’t see any solid evidence that Apple’s model is indicative of a mass trend toward online “gatekeepers.” As Hesseldahl points out, there’s still plenty of other devices and stores out there from which to choose.  Moreover, as I pointed out in my first review of Zittrain’s book The Future of the Internet and How to Stop It, we should be thankful that we have a range of device and store options to choose from.  That’s a great thing. If you don’t like Apple’s style, then don’t get an iPhone.  It’s one of the reasons I didn’t.  Vote with your pocketbooks, people!