Apple has rejected an iPhone app, Podcaster, on the basis that it duplicates the functionality of the Podcast section of iTunes. The author is greatly annoyed, as are some other developers and observers. Apple might even be on shaky legal grounds.

The author of Podcaster, Fraser Speirs, in his blog, explained how Apple disapproved his app on seemingly anti-competitive grounds.

"That’s right folks, it duplicates the functionality of the desktop version of iTunes. Therefore, it was denied from sale in the app store. Although my app does allow you to listen to podcasts (like iTunes), it also allows you to download them directly to device and that is something Apple does not offer."

Mr. Speirs pointed out that there is a calculator for sale in the App Store that duplicates [and extends] the functionality of Apple’s built-in calculator. Not a problem. Meanwhile, Mr. Speirs is looking at other ways to distribute his software.

Dave Winer, another noted developer, said last week that he would never develop for the iPhone because after a lot of investment, one could fine out at the last minute that Apple disapproves.

Mr. Chuq Von Rospach, a former Apple sysadmin, weighed in in his own blog:

"Okay, Apple has a serious problem here. Two, actually. One is that they’ve now messed up the Application approval setup enough that developers are abandoning the platform. The second problem is they don’t seem to care (or notice).

"This is really disturbing to me; what seemed to be ’oh my god, too many developers!’ early on is starting to look like ’We’re Apple, because we can.’ Not a good trend. My biggest worry is that Apple’s made a decision that it’s certain key/major developers that really matter (like Pop Cap or Pangea) and the rest can basically take it or leave it; with Android coming from Google, now seems a bad time to piss off the people who can turn the iPhone from a huge success into a sustained, long-term massive success."

John Gruber at Daring Fireball put it more strongly: "Let’s be clear: forbidding ’duplication of functionality’ is forbidding competition. The point of competition is to do the same thing, but better."

An attorney who follows Apple closely but who requested anonymity told TMO: "Apple is skating on thin ice here. Refusing to post an app to the App Store for technical and/or security reasons or to protect Apple’s reputation (e.g., no porn) or to prevent actionable fraud is defensible, but to exclude an application simply because it duplicates the function of iTunes is highly questionable and exposes Apple to legal jeopardy for hindering competition."

If Apple wasn’t paying too much attention to the consistency and manner in which they vetoed certain apps in the App Store before, chances are they’re paying attention now.