A recent business move made by Apple managed to cause quite a commotion, with the company rejecting the iPhone podcast client Podcaster with the explanation that "since Podcaster assists in the distribution of podcasts, it duplicates the functionality of the Podcast section of iTunes".

Al Sokirynsky's Podcaster is a version of Podcaster.fm developed strictly for the iPhone. The Web app streams podcasts over Wi-Fi and EDGE and aside from streaming podcasts, it is also designed for listening offline to the downloaded items.

Sokirynsky claims that the development process took into consideration all of Apple’s guidelines and the application should not be considered a violation of the iTunes App Store Prime Directive.

The true explanation might be related to Apple’s fears about Podcaster’s potential to steal some of its business, as it offers clients an alternative. Some call it a clear proof of an anti-competitive business strategy with the company looking to push aside all those smaller players looking to turn their projects into a success. The whole point of competition is to top the work of the other players in the market with a similar better product. This leads to the wider variety that consumers can choose from, as they can get a cheaper product, an easier to use product, a better looking product or all these features in one.

Even though by following the App Store’s rules and guidelines, developers should be assured that their work will be included in the company’s offer and they will get a chance at financial gains, the final say goes to the company’s execs, who can decide just like in this case, that the product does not “fit” well with its direction.

This is expected to cause a general fear among developers, as they might receive with a certain reserve the news about future projects with Apple. This fear is completely justified because nobody wants to work on an assignment knowing that there is a strong possibility not to receive any sort of compensation, no matter how good it turns out.

Apple needs to take a good look at its policy and provide some clear rules of engagement. These rules are used by many of its collaborators to get a clearer image of the activities what they can and cannot do. Without Apple’s approval, these applications are useless, as they cannot be sold anywhere without some legal issues; they cannot even be offered for free.

The reactions in the media were not awaited for too long. “Apple has gone too far,” writes Paul Kafasis for O’Reilly Digital Media. “Rejecting an application because it might compete with Apple is simply indefensible,” he concluded. Fraser Speirs, who developed a popular iPhone app called Exposure, posted a message called App Store: I’m Out, where he wrote “I will never write another iPhone application for the App Store as currently constituted.”

The release of the App Store was received with great enthusiasm, and it now offers about 3,000 programs and recorded more than 100 million downloads since its launch.