– Hubert H. Humphrey

A lot of people appear to think that Apple (Nasdaq: AAPL) is on the wrong side of the iPhone unlocking and bricking affair and is rotten to the core. I believe they are wrong. In fact, I believe Apple to be totally blameless and well within its rights, the law and even good sense.

The arguments so far have been that Apple is acting either illegally or unethically. At the very least, they are abusing their customers. In fact, none of that is happening.

Classes of Users

To analyze the situation properly, it’s necessary to look at the various classes of users, look at their rights and what has transpired.

• Class No. 1: The typical customer with a pristine iPhone. I will argue that 99.9 percent of Apple’s 1.25 million iPhone customers have activated their phone, are paying their bills, are using their new mobile phone productively.

  Of the remaining customers, there are several possibilities.

• Class No. 2: Researchers who buy an iPhone, never activate it in the intended fashion, and take it apart to see what makes it tick. They may engage in hardware or software experiments to unlock the iPhone and liberate it to be used with another carrier’s SIM. Certainly, that is an interesting technical challenge, and any such researcher who’s smart enough to tackle such a project knows that there is some possibility they could brick the iPhone. Solution: requisition a few more and continue experimenting.
• Class No. 3: Individual technologists who want to develop their expertise, but who are not particularly well-funded. They can only afford one iPhone, and it has to double as their working phone. They want want to revel in the use of the iPhone, take advantage of all its cool features, and desperately hope that they’ll not make a mistake with their new toy that bricks it.

  They buy the phone, activate it, agree to the all the licenses, terms and conditions, use the iPhone for communication, then cautiously experiment with it. Installing third party software is fairly harmless, and they know that Apple neither blocks or condones third party native apps.

  Then, for the sake of experimentation, they may try to unlock the iPhone. As this point, they’ve violated Apple’s warranty, but that’s okay. They’re free to do that. They’re also free to break their contract with AT&T (NYSE: T) and pay whatever fees are required.

• Class No. 4: Customers who intended to unlock the iPhone all along. They buy the iPhone, enter 999-99-9999 as their SSN (Social Security number), fail the credit check, sign up to pay by the month, then terminate service. They then read up on how to unlock the iPhone, and do so successfully, paying lawful charges to their new carrier. So far, so good.

  However, they then decide that they want the new features offered to Class No. 1 customers. A) They apply the next Apple update without resetting the iPhone back to its original pristine condition. It gets bricked. B) Or, the customer does reset it, applies the update, and then finds that their original procedures to re-unlock the phone doesn’t work so well. They’re greatly annoyed.

All the fuss is surrounding customers in Class No. 3 and No. 4, so I’m going to analyze the situation by appealing to precedent and analogy in a related industry, the car, which has been around for 100 years, as opposed to the iPhone, which has been around for about 100 days.

Adventures With Bill

Let’s take a look at a BMW customer named “Bill.” He’s bought a new BMW 335i. It’s drop-dead gorgeous, and he loves it.

After the sale, the BMW dealer tells him about the Dinan racing group. It’s a serious group of professionals, and they’ve developed a software patch for his car that will give him 20 more hp, requires premium fuel, is blessed by BMW, won’t violate his warranty, but will cost him US$450. Bill thinks about it, but declines.

One day, Bill finds a Web site called “JoesSuperBimmer.com.” There, he finds some software, v0.9, that claims to give him 15 more horsepower, but allows for mid-grade fuel. Bill hates paying for premium. So he downloads the software, connects his Macbook to the 335i’s engine, and uploads the software to computer “A.” All seems well, and Bill is happy to be paying for mid-grade gas. He has a zippier car than other 335i owners, and that pleases him also.

Soon thereafter, BMW is required to do a safety recall. They’ve tested the fix for his engine’s computer “B,” and apply the fix when Joe takes the car in for the recall.

After the technician applies the BMW update, he starts the engine, and there’s a loud crack, small explosion, smoke, and the engine seizes up. Bill gets a phone call.

BMW: Bill, your engine is gravely damaged. The car won’t start. It’s never going to start.

Bill: It’s your fault! You were working on my car!

BMW: It’s certainly not out fault. We know our cars.

Bill: You did it on purpose!

BMW: No, we simply applied our own tested update. Something else went wrong.

Bill: Then you should fix it under warranty!

BMW: In fact, we know what went wrong. We noted that the engine software has been tampered with. Your warranty is void.

Bill reflects for a moment. He needs his car to get to work.

Bill: What are my options?

BMW: Well, you can pay us $4,815.84 for a new engine. Then we’ll reload all the factory software. Your car will be as perfect as the day you bought it. Or … you can have your car towed to your house, put up on blocks, and you can admire its beauty daily.

Grudgingly, Bill agrees to pay the repair fee. However, the next day, driving to work, he thinks about suing BMW. He suspects they destroyed his engine on purpose. Worse, they’re trying to force him into paying for premium fuel. He smolders.

That night, when he gets home from work, he goes to JoesSuperBimmer.com and discovers v 0.92 of the software. Super Joe’s comment about the new version is, “… worked all night on it. Seems better.”

Bill thinks about installing the software. He has every right to do so.

What would you do?

Battling Exclusivity

It seems to me that mobile phones tied to one carrier have been around for a long time. No federal or state law, no legal judgment that I am aware of has set a precedent that says Apple cannot tie its phone to a single carrier partner.

Just because the situation with unlocking a mobile phone is more flexible in Europe and Asia, a more desirable situation for most of us, doesn’t mean that Apple cannot engage in what every other mobile phone manufacturer has been doing all along: building desirable phones and making them available exclusively with a partner, for a period of time, in order to help both prosper in the market place.

Most certainly, Apple’s attorneys have scoped that out, and until U.S. law changes, it’ll continue. If we don’t like it, we have to somehow convince our Representatives to enact a new law.

On the other hand, it’s been pointed out that under the DMCA (Digital Millennium Copyright Act), we have the right to unlock our phone. The law doesn’t say much, so far as I’ve read, about the manufacturer’s legal obligation to make unlocking easy and painless. Eventually, those matters will have to be settled in court. Even so, I believe Apple will prevail because Apple is following ample precedent in tying its phone to one carrier. Until U.S. law specifically requires a mobile phone manufacturer to make unlocking as simple as replacing a SIM card and requires phones to be usable with any carrier, Apple’s attorney’s can just stand up in court, point to the current U.S. laws, or their absence, as well as precedent and be home in time for an early dinner.

What does all this mean for Class No. 3 and No. 4? They’re perfectly free to try to unlock the iPhone that they own. If they achieve an unlocked iPhone and settle their account with their carrier(s), they’re probably in good shape. However, if they then, desiring to take advantage of the features offered to Class No. 1 customers, ignore Apple’s warnings about what could happen, then they don’t really have anyone to blame but themselves if that update bricks the iPhone. After all, Apple cannot take into account what experimental software may have been installed that effectively terminated the customer’s license agreement. Even the customer wasn’t sure about all the side effects. The experimental code is too new and complicated.

‘Apple Doesn’t Have a Monopoly’

I should point out here that no evidence has been presented that proves Apple wrote code to intentionally brick phones. Given the obscurity, security and complexity of Apple’s own code, I doubt anyone ever will prove that. Moreover, Apple is blameless if some exotic technique used for unlocking results in damage to the iPhone at the next update because the full impact of the experimental software was never explored nor warrantied.

On the other hand, I believe that Apple may have to backtrack on the Magnuson-Moss Warranty Act. After all, if a customer lawfully unlocks their iPhone and otherwise pays all required fees to their old and new carriers, then Apple should attend to their side of warranty against defects and poor workmanship. However, a customer shouldn’t expect, after warranty service, to have the repaired iPhone returned in other than Apple’s own factory condition. And if new parts replaced under warranty prevent further unlocking, Apple should have no liability. After all, the iPhone is fixed and ready to be used as intended according to Apple’s design specifications.

Apple doesn’t have a monopoly by any means; that’s a absurd proposition and will be laughed out of court. Anyone can go out and chose from many different mobile phone carriers, AT&T, Qwest, Sprint (NYSE: S) , T-Mobile , Verizon (NYSE: VZ) and many others. A wide variety of phones and services are available from all of them.

Back to Bill

Bill has installed version 0.92 of the software. He’s worried about taking the car in for service in the future but is crossing his fingers that nothing will go wrong. While he’s happy about paying for mid-grade fuel, he’s still blindingly mad at BMW for taking his $4,800 and some change.

In fact, he’s so mad that he’s thinking about selling the BMW and buying a Corvette. He calls Toyota and finds out that he can’t get a Corvette from Toyota. Now, Bill’s really mad.

Monopoly! GMC is evil. Bill hates the idea that he has to buy the Corvette from GMC, a company he doesn’t like. However, that Corvette is oh so beautiful. If only Toyota made one. Bill now believes that BMW and GMC are both out to get him.

In Conclusion

I believe that only a small percentage of Apple’s customers are responsible for all the fuss, but that small percentage creates a selfish, emotional sensation of injury that tries to irrationally rally the rest of the users to their unjustified cause.

Apple is engaging in activities that every other mobile phone manufacturer engages in. Apple doesn’t have a monopoly; that’s laughable. Customers who believe they’ve lawfully unlocked their iPhone should continue to use it in that state and not expect to install any further updates from Apple. If, however, the display or audio jack fails, they should get warranty service. If they’ve altered their iPhone in a fashion that Apple cannot anticipate and then insist on applying Apple’s updates, unanticipated problems of their own doing should be expected.

The key here is that we have a complex device, a mobile phone or a car. There is tested and approved software that maintains the warranty and the proper operation of the device. Then there’s experimental software, downloaded from a fly-by-night Web site, that neither the developer nor the user can validate 100 percent. If it’s installed by the user, he has the right to do that. He also has the right to put a bricked iPhone up on a pedestal and admire it daily.

The San Jose, Calif., company owns four islands in the virtual online world Second Life, each populated with pavilions for product demonstrations, training and meetings.

However, its push into virtual work spaces — where offices and conference rooms exist inside computers instead of concrete — reaches well beyond Second Life’s quirky environment of flying “avatars,” or digital people.

The network equipment maker launched a virtual site for business partners and service providers a month ago where visitors can wander among product exhibits. It also set up virtual workrooms where engineers, represented by avatars, collaborate on new designs, despite being spread around the world. The company plans to make the virtual workrooms available to all its employees in 2008.

A Workplace Transformation

With its interest in virtual environments, Cisco has placed itself on the leading edge of a workplace transformation now creeping into U.S. corporations. The goal is to enhance communications and productivity as workforces go global — the effect may be a radically different office of tomorrow.

“This technology is just coming of age,” said Christian Renaud, chief architect of Cisco’s networked virtual environments. “It is at a crossroads. It’s either going to get really big or stay boutique.”

Virtual worlds offer new ways for people to collaborate and foster workplace interaction in an age of dispersed employees, say advocates. Companies can also save on travel time and cut down on the greenhouse gases fueling global warming.

Virtual worlds may take years to become widely adopted, but interest is growing, said Ian Hughes, a virtual worlds evangelist at IBM (NYSE: IBM) . “Eighteen months ago, they were (considered) insane. Suddenly they are becoming very real.”

Much Work Remains

Serious problems regarding security and the ability of virtual worlds to interact with each other remain unsolved, skeptics say. Workers may also need powerful new computers to run the 3-D environments that make virtual conference rooms seem more like the real thing.

Most corporations have yet to take the first few steps. Even consumer sites such as Second Life that have attracted a lot of press attention see relatively low traffic. According to comScore Media Metrix, a research firm, the Web destination attracted just 340,000 unique visitors from the United States in August, a relatively small number compared with other big-name Internet sites.

Some companies admit they have yet to give virtual worlds much thought. Other firms are moving aggressively. One is IBM, which has a variety of experimental projects under way that let employees hold meetings in virtual office buildings with waterfalls and have chats around impromptu campfires. Participants select from a variety of relatively plain avatars linked to their IBM names — unlike Second Life where members can embellish their avatars.

“In virtual worlds, we notice people mingle like they do in real life,” said Hughes. “The pre-event mingle gets to be very important.”

The 20th Building

Sun Microsystems (Nasdaq: JAVA) has a project it began in January titled “MPK20,” a name that refers to the first virtual building. It’s an addition to 19 real buildings at Sun’s Menlo Park campus. MPK20 has about seven rooms and is being used by its developers for team meetings. Other small groups will be invited starting in November.

In the “team room,” workers post documents they are working on and can speak to one another. The benefit is the serendipitous social interaction employees in different locations can share, said Nicole Yankelovich, principal investigator. On any given day, more than 50 percent of Sun’s personnel work remotely, and employees say they miss person-to-person exchange, Yankelovich said. After virtual meetings, small groups form spontaneously to continue discussions.

“To me, that’s what we designed MPK20 for,” Yankelovich said. “That is something you cannot do with video conferencing.”

Plenty of Upside

Vendors of virtual world software and services are convinced a large market is inevitable. Forterra Systems of San Mateo began shipping its virtual-worlds software in May and says it has 20 customers, including the U.S. Army, which uses a virtual environment to train recruits on checkpoint procedures they will encounter in Iraq. Qwaq of Palo Alto has “scores” of customers for the virtual-world hosting service it has had in the market for less than a year, said Chief Executive Greg Nuyens. Among them is Intel (Nasdaq: INTC) .

“This isn’t really a market yet,” Erica Driver, a principal analyst at Forrester Research, said of virtual worlds products for businesses. “It’s still experimentation.”

There are good reasons. First, companies need to enhance security so they can confirm the identities of employees and protect communications with encryption in case they are intercepted. Worlds need to be interoperable, so that employees moving from one to another don’t need to log out and log in again with new personas.

Computers also may need to be more powerful. During a presentation last month, Intel senior fellow Justin Rattner estimated that a virtual, 3-D environment could require a 100-fold increase in the computational power of servers and place three times the load on personal computer chips .

They are “very computationally intensive on the client as well as the server,” Rattner said.

Mom and Dad will see the incident on video soon enough, after all.

Several U.S. auto insurers have begun offering in-car cameras or global positioning equipment to help parents monitor their teenagers’ driving behavior, hoping to reduce the alarming number of crashes involving young new motorists.

Driving Danger

Industry experts say it’s too soon to gauge the effectiveness of programs like American Family Insurance‘s Teen Safe Driver, used by the Kindermans in Madison, Wis. However, the case for needing to improve highway safety for teens is compelling.

Traffic accidents are by far the No. 1 killer of U.S. teenagers, with a fatality rate four times higher than drivers aged 25-69. A total of 5,288 teens died in traffic accidents in 2005, and more than 7,000 were driving cars involved in fatal accidents.

Insurance companies can benefit significantly if the initiatives catch on, according to Craig Weber, senior insurance analyst with research and consulting firm Celent.

“It’s a unique opportunity for them to help change behavior, which will help them drive down rates, which will make customers happy,” said Weber. Even if rates don’t drop, he added, “it’s a huge win in building customer loyalty and generating positive PR.”

Watching You

One of the programs — Safeco’s Teensurance — just announced premium discounts of up to 15 percent for its customers who participate. Others are likely to follow suit.

Under Teen Safe Driver, a camera records audio and video images of both the road and the driver when motion sensors detect swerving, hard braking, sudden acceleration or a collision. The footage goes to an analysis center where it is graded for riskiness and sent on to parents with comments and coaching tips.

Teen drivers have mixed feelings about the technology; one in 20 even cover the camera after it is first installed, according to program officials.

“It’s great that you can see what you did wrong,” said Anna. “But it kind of feels like a parent is in your space, especially when you get yelled at if you do something wrong.”

She has been part of a pilot program at her high school for the last year. She usually sits down with her father, a police officer, to review the incidents — and explain why she was driving with a cell phone to her ear.

Her mom, Bette Kinderman, views the system as a great tool for parents. “I’d rather be able to talk to her about an issue before there’s an accident,” she said.

She downplayed concerns about privacy: “To me, my kids haven’t earned their privacy in a car yet. Being in a car is so dangerous.”

‘Providing a Bridge’

While the early data is limited, Madison-based American Family says teen drivers participating in the program have had significantly fewer crashes and injury accidents than would have been expected based on national driving statistics. It also says driving risk scores measured in the recordings analyzed drop an average 80 percent during the first 16 weeks.

Rusty Weiss of DriveCam, the San Diego-based company that developed the technology, said the video captures more inattentive mistakes than aggressive-driving ones; for example, teens talking on their cell phones, listening to iPods or heeding friends’ advice to run yellow lights. Private details and conversations are not shared with parents, he said, nor are individual incidents or video clips given to American Family.

“Our program is really about providing a bridge between parents supervising teenage drivers in their vehicle and being out there on their own,” Weiss said.

Privacy-wise, the key is that the program is voluntary, said Joan Claybrook, president of the nonprofit group Public Citizen, which advocates for safer roads.

“I think it’s very important for teenagers to get some feedback at a time when they’re new to driving,” she said. “As long as they’re fully informed of the potential uses of it and the parents are fully informed of it and they decide to do it anyway, then that’s fine.”

GPS in the Mix

Other programs aim to accomplish similar goals using global positioning systems technology.

Guy Thompson of Lake Oswego, Ore., gets an automated text message whenever his 16-year-old daughter Maggie drives her car more than five miles from home or exceeds 55 mph, limits he set to trigger alerts under the Teensurance plan. He also can monitor the location of her car online, or even set the device to notify him if the car arrives at a specified address.

Thompson says the extra information eases his concerns when Maggie is out and has made her more forthcoming about her whereabouts.

Maggie said she’s become a more conscientious driver because she knows that if she speeds, the device — and her dad — will hold her accountable.

“I think it’s generally a good thing,” she said, “as long as you have a trusting relationship and you’re honest. And if you don’t, maybe it’s a step in the right direction.”

Customers of Seattle-based Safeco pay an additional US$14.99 a month for two years for the program.

While Safeco agents suggested that initial interest in the program was tepid, spokesperson Matt Gertmenian characterizes nationwide sales as good so far. The main goal, he said, is to get teens to think and talk more about driving safety.

“We’re trying to have them drive the way they do when Mom and Dad are in the car with them,” he said.

Will It Catch On With Parents?

Another new program is MobileTeen GPS, launched in April by American International Group’s (NYSE: AIG) AIG Auto Insurance. Like Teensurance, the GPS program sends parents an e-mail or text message if the teen’s car exceeds pre-defined speed limits or strays too far from home or school.

The cost is $19.99 a month for two years for policy holders of Wilmington, Del.-based AIG; others can buy the device for $469 and join the program for another $29.99 a month.

The Insurance Institute for Highway Safety is withholding a formal opinion until it can complete studies on their effectiveness. It’s also unclear how widely the monitoring devices will be embraced by parents and teens, said Anne McCartt, senior vice president for research.

“We think it’s quite likely that the teens’ behavior would be affected, knowing that their parents are getting feedback on the risk-taking and the errors that they’re making,” she said. “Whether that translates into lower crashes, we don’t know.”

Before every trip, you need to check inventory. Costumes for 14 dancers. Check. Scenery and design artifacts for certain works. Check. About 1,000 iPods.

Excuse me?

‘Snazzy Setup’

The Merce Cunningham Dance Company returns Friday and Saturday to the Harris Theater in Chicago, laden with a couple of specially designed cases that store Apple (Nasdaq: AAPL) iPod MP3 players in a way that they recharge en route. “It’s a pretty snazzy set-up,” brags Trevor Carlson, the company’s executive director.

The troupe employs one extra staff member just for this tour, to serve as iPod guru.

The iPods aren’t for the dancers. They’re for the audience .

iPods, EyeSpaces

In “EyeSpace,” Cunningham, renowned for his interest in injecting chance into his work — a pre-performance roll of the dice is one celebrated practice — tackles what may be the ultimate in unpredictability. Audience members are provided iPod shuffle devices set to play tracks randomly from composer Mikel Rouse’s “International Cloud Atlas.” Thus, every viewer will experience a mix of dance and music that’s unique.

Or, iPod owners can get instructions to download the score when they buy tickets and bring their own devices. Moreover, a pre-recorded environmental score is also broadcast in the theater. Patrons will hear bits of it during pauses between selections or can forgo the iPod and listen to that score. Or go back and forth.

Think Different

The possibilities may not be infinite, but they’re darn close. “This allows the public, the individual, to be a part of the process,” Cunningham says. “We live in a world where you have to allow for diversity. The idea here is not to direct the audience, but give them the opportunity to do something themselves.

“By using chance operations, you can think in directions you hadn’t worked out before,” says Cunningham, 88, often labeled the greatest modern dance choreographer alive. The idea, it’s suggested, is to free the mind to take its own path. “Well, I suppose,” he responds. “I’d say it gets the mind out of the way. Perhaps they’re the same thing.”

In any event, “It’s another way of looking at the world around us,” he says.

Staying on the Cutting Edge

Because of a long life spent enduring the physical rigors of dance, sometimes on inhospitable concrete or linoleum floors, Cunningham is now mostly confined to a wheelchair. He sometimes directs the dancers while sitting on a stool.

That means he can’t demonstrate moves much anymore, but Carlson says the great artist has made a virtue of that necessity. He has been working with computer technology to illustrate moves, and this exploration has only added layers of complexity to the study of randomness that Cunningham and the late composer John Cage so famously pioneered. Enter the iPod.

“It’s exciting” Carlson says, with no risk of exaggeration, “to be working with a choreographer who remains so cutting edge.”