From a statement posted on the developer’s site:
Around 12PM EST, Apple called our head office to let us know they were going to go ahead and pull our app iTether from the App Store. They stated it was because the app itself burdens the carrier network, however they offered us no way to remedy the solution… We were very clear when listing the app what the primary function was and they even followed up with several questions and requested a video demo then they approved the application.
For a while it sounded like the approval of the iTether app (a $15 app that allows laptops and other devices to “tether” to the iPhone and use the carrier’s network for data, basically making your iPhone a Wifi hotspot) was a mistake on some Apple employee’s part, but this statement seems to indicate that it wasn’t a mistake at all.
The developers’ statement goes on to say:
We strongly disagree that it burdens a carrier’s network, as from our own data history on more than 500,000 users we know the average user consumes less than 200 MBs of data per month on Tether….
Our team is very disappointed in Apple’s decision; as we strongly believe we help carriers better monetize their data stream by pushing customers into new data tiers further increasing their bottom-line. It is very anti-competitive to not allow any Tethering application to enter into this space to innovate….
According to Apple, users who purchase iTether before it was pulled will continue to be able to use the product.
Our team is evaluating all of our options… Stay tuned.
If what the developer says is true, that Apple cooperated with the developer to bring the app to their market, then expect another wave of the free-to-tether debate to surge. The developer’s notion that allowing users to tether for free actually encourages them to upgrade their data plans seems valid enough; I guess we’ll just have to keep on waiting for Apple and the rest of the industry to sway AT&T and Verizon.