Apple said the official Google Voice app duplicated features already available on the iPhone. (Canadian Press)A war is escalating among technology giants over small software — smartphone apps — with Apple at its core.

And now the U.S. federal communications regulator is probing the fight over Google Voice, Palm wants to get an industry group involved… and smartphone users may end up as the winners.

In July, Apple changed its iTunes software to prevent Palm's new answer to the iPhone — the Pre — from easily transferring files from a user's iTunes library. A week later, Apple refused to approve a Google Voice application for the iPhone.

In doing so, it sent the clear message that it has no qualms about restricting both the iPhone applications available to its users and popular Apple software available to other platforms.

That's far different from the approach taken by many other companies. They are trying to capitalize on consumers' desires to access powerful new features on as many platforms as possible.

Still, the others aren't giving up without a fight. Palm's counterattack included both an operating system update to restore the Pre's iTunes abilities and a complaint with the USB Implementers Forum, an industry standards group.

Meanwhile, the U.S. Federal Communications Commission sent letters to Apple, U.S. iPhone wireless carrier AT&T and Google last week asking for more information about Apple's decision not to approve Google Voice applications for the iPhone.

Apps are everything: analyst

All the scuffling over smartphone software is one sign that it's no longer cool designs and innovative hardware features that set smartphones apart from one another.

"Apps are pretty much everything," said Mark Tauschek, lead research analyst for Info-Tech Research Group in London, Ont.

So far, that's good for Apple, which has more than 65,000 apps in its app store available to iPhone users.

"They are absolutely dominant by a long shot over any of the other application stores or markets," Tauschek said, noting that Nokia has only about 20,000 apps, Research In Motion has only a few thousand for its BlackBerry, Palm's Pre has just a handful, and Windows hasn't even launched its mobile marketplace yet.

The Palm Pre smartphone and a wireless charger are shown at the International Consumer Electronics Show in Las Vegas in January. (Jae C. Hong/Associated Press)The rise of smartphone apps has been predicted for awhile, but is only starting to happen, said Shyam Sheth, mobile product manager for Google's Waterloo office.

"It's an exciting time … I think a lot of innovation is finally getting unleashed that's been held back the last 13 years."

That all presents a huge opportunity for companies like Google, but the landscape is also a challenging one.

Fragmented market: Google

"It's a very fragmented market," Sheth said. "There's so many devices out there today … so you want to extend out as much as possible."

He added that for developers, being able to write an application and have it accessible on many platforms in that type of market is a "huge benefit," particularly for apps that have a social or viral nature.

It's not just a matter of reaching a larger market share, he said. It's also the fact that existing users also keep changing their phones on a regular basis, and companies like Google want them to be able to access their services "regardless of what device you're on."

Google isn't the only one of this opinion. Microsoft posted a case study on its blog last week detailing how to adapt iPhone applications for the Windows Mobile 6.5 operating system.

Tauschek said customers also don't want to have three or four applications in order to perform the same functions for different devices — and that is presumably what Palm has in mind with its determination to make iTunes work with its Pre.

He said he's not sure why Apple would try and stop Pre users from using iTunes, as that would presumably boost revenue to the iTunes store and is unlikely to draw potential iPhone buyers to the Pre.

Nor is he sure why Apple rejected the Google Voice application, although he suspects that it may have something to do with Apple's relationship with its wireless carriers. AT&T has denied it was behind the rejection but the company has expressed concerns in the past about other apps.

An Apple spokesman told CBC News that the company does not comment on its app approval process or marketing strategies.

Meanwhile, Tauschek said a Google Voice app for the iPhone is available from an underground app store to users who have "jailbroken" their iPhones to accept such software. That shows there is demand for the app, he added, and "if Apple wants to play that way, then there are alternate ways for people to get applications onto their iPhones."

'You can't blame Apple'

Ken Dulaney, an analyst for Gartner, said the closed, controlled approach of Apple and companies such BlackBerry-maker Research In Motion has worked in their favour so far.

"You can't blame Apple and Blackberry from trying to make and to safeguard their user experience," he said. "You may not like them, but they are sound business directions, and they provide value for those customers."

At the moment, he said, customers don't expect smartphones to be open platforms like PCs, but they really want them to be.

"Openness does drive innovation," he said.

Tauschek said he thinks networks will eventually become more open.

"Really, it's consumer preference that will drive carriers towards that."

Already, Apple is getting bad press for the way it rejects apps that people want, such as Google Voice.

"If they do it frequently enough with important enough applications, you'll probably start to see a little bit of an exodus from their device."

In the short term, however, he predicts there's going to be more fighting.