AOL Turns the iPhone into an Expensive Radio

Here’s one way I listened to the radio in grade school: I wound a coil of wire and connected it to a small crystal, a little yellow earphone and a few other parts nailed to a board. This crystal radio was enough to receive WJR, then the CBS affiliate in Detroit, where I grew up. Batteries were not required. Here is how someone will be able to listen to the radio next month: Buy an Apple iPhone and download the new AOL Radio application. It will connect to AOL’s servers by way of the cellular network. The phone’s GPS system will monitor signals from satellites orbiting 12,000 miles in space in order to determine your location. This will automatically determine your location and tune to the digital stream from the nearest CBS station.
Have we really made progress?
OK, that’s a sort of complicated question. From the 1970s to today, a cheap transistor radio has been a fine and portable way to listen to local radio. It beats the crystal set I made — and in many ways, it’s superior to the latest configuration of an iPhone.
But I actually think that the use of the iPhone for streaming audio is groundbreaking. Most of the Rube Goldberg complexity is under the surface. It expands what you can listen to on an iPod, adding news, weather, DJ blather and songs you don’t own. The AOL service lets you listen to some 200 stations, including CBS radio stations and others programmed to 25 genres.
More importantly, the same technology is available to others that offer streaming services. This can be audio and presumably video of all types, including the sort of customized radio offered by Pandora and Last.FM.
The AOL application will work over a Wi-Fi connection and the cellular data network with both the original iPhone and the faster 3G iPhone. Kevin Conroy, an executive vice president of AOL, said in an e-mail that the application offers sound quality as good as listening to a CD.
AOL Radio on the iPhone will be free to users, with audio advertising inserted in the radio streams. There may be graphic ads in the application later.
All of this begins to answer the nagging question about how much latitude Apple and AT&T will allow to applications that may challenge their own businesses. Streaming media, of course, can use a lot of bandwidth. And it can compete both with Apple’s iTunes store and whatever hopes AT&T may have for making money from over-the-air music and video.
Apple has not restricted AOL’s ability to offer over-the-air streaming supported by ads. Apple even awarded the AOL Radio application a design award in the “best iPhone entertainment app” category.
The picture is not entirely consistent. Apple still won’t enable the Adobe’s Flash video format, which has the effect of limiting the amount of streaming video on the iPhone. (Apple has enabled video streaming in other formats.) And there are reports that the terms for iPhone developers ban the creation of applications that use the Global Positioning System feature for “real-time route guidance,” perhaps to avoid competition with Apple’s own navigation services.
However, Apple does seem to understand that it will ultimately fare best if it makes the iPhone as useful as possible. And that means exploiting the device’s ability to stream music, talk and video. I’d say that’s handy even if you do have to charge the battery every day.