Blog Post

After Download Frenzy, Apple Cuts Cord To iTether 's iPhone Tethering App

An iPhone application called iTether that would let iPhone users run their Mac or PC over the phone’s data connection without paying their carrier extra fees appeared in Apple’s App Store last night, to the surprise of many familiar with Apple’s review process. The app lasted just under 12 hours before being removed by Apple (NSDQ: AAPL) Tuesday morning, but briefly became the top-grossing app in the App Store.

Tethering can be a life-saver when you’re stuck at a location without Wi-Fi or hardwired Internet access and need to do something that requires a keyboard and processing power. But carriers don’t like the idea of their customers running data-thirsty PC apps over wireless networks, and many charge a significant monthly premium in order to allow people to use their phones as wireless modems.

iTether appeared to be a way around that restriction. For a one-time $15 fee, Tether (the company behind the app) promised to “help iPhone users find a simple, affordable and effective way to use their laptops while traveling,” said Tim Burke, the company’s CEO, in a blog post announcing the release of the application.

Patrick Hankinson, the company’s chief marketing officer, bragged on his Twitter feed that iTether quickly became the top-grossing app during the short amount of time it was live on the App Store, besting such iPhone juggernauts as Zynga and Rovio. And Tether’s servers sagged under the weight of those curious about the app. But a little after 9 a.m. Pacific Time (NYSE: TWX), it all came to a halt.

The app is no longer available in the App Store, to the surprise of very few. Apple is famously circumspect about the types of applications it will allow into the App Store, unlike other mobile application stores that don’t have such a strict review process. (Tether makes an Android and BlackBerry version of its app.) And it would seem that the approval of the app, much the same way a games-subscription app was made available and then pulled in quick fashion last week.

Tether thought it was playing by the rules. “We were very clear with Apple what our app did. They asked us a bunch of questions and then approved us,” the company said on its official Twitter feed in response to a question from a potential user. Certain carriers around the world may not be as restrictive when it comes to tethering as AT&T (NYSE: T) and Verizon are in the U.S., but it’s hard to imagine that an App Store reviewer would be unaware of the app’s potential to anger those key partners.

In any event, those who managed to download Tether before it was pulled from the store found a cheap way to use their PC or Mac anywhere, so long as they also have their iPhone. So long as they don’t start downloading pirated HD movies over their carrier’s network (or other bandwidth-intensive files), their carriers may never know that their iPhones are skirting the rules.