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People are shouting "Apple is evil" and "Apple monopoly", but Apple has no obligation to support the Palm device. Apple still makes a lot of money on iPhone and iPod sales - not everyone buys music from the iTMS. So, every Pre owner that uses iTunes to rip their music and put it on their Pre cost Apple money. Yes, those that use the iTMS make them money, but they'd need to buy an awful lot of music to cover the cost of R&D etc. This is without the bad karma of Palm stealing device id's and breaking the USB rules.
I don't think this is about supporting third party devices. My understanding is that it is more related to deliberately disabling third party devices. It's like getting a Sony CD player for your car and it only allows you to play Sony CDs and nothing else despite the fact it is a common standard. Well in this case Palm did what they had to "Pretend to be an Apple device" and let's see what Apple will do now? Ban their own vendor ID? Imagine the consequences for such an action. In the current situation, until Apple finds a better way of detecting an authentic Apple device, Palm Pre will just work. Edited 2009-07-25 06:22 UTC
If you think this has nothing to do with "supporting third party device", you shouldn't feel uncomfortable when it is broken in a new version. When you say CD player is a standard, you must be aware iTune protocol is not. Don't say there is no cost to allow third party devices work via hacking. There is always cost. More than once, a product is hacked to work with a third party device. Then when the product is upgraded, all the third party devices are killed and customers just blame the vendor of the product. Because software is so complicated, Apple can not assure if an upgrade would break Palm's device so it is better to let Palm users know the danger to rely on such a fragile inter-work before they get use to it.
The Pre costing Apple money argument is a red herring. iTunes is a freely distributed, Mac/PC-based program and doesn't require a portable media player at all. I use it purely to listen to podcasts on my PC. By your argument, I'm costing Apple money. That's true, in a sense, but it's a cost Apple has implicitly agreed to foot by providing me with free access to their product.
Putting the shoe on the other foot regarding the Vendor Id field, the USB standard is about interoperability. If Apple has used the Vendor Id field to limit the interoperability of their software, they are abusing the spirit and the letter of the USB license just as much as Palm is.
In this battle, there is no morally or ethically superior position. Either Palm or Apple could have taken the high road, but neither chose to do so.