Google Blocks Protected Apps from Unlocked G1s

An unlocked Android G1 for $400, to anyone? That sounded like a great deal, when Google started offering developer G1s. Anyone who registered as a developer (and anyone could do so) could buy one. But Google is blocking unlocked G1s from viewing copy-protected Apps in the Android Market.  Not much of a bargain when you can't get access to all the applications that you might want, is it?

Google admitted the issue in response to a question in the Android Help Forum:
Hi there, If you're using an unlocked, developer phone, you'll be unable to view any copy-protected application, including Shazam and Calorie Counter. This is a change that was made recently. Best, Ash
Now, the theory is not so much that they care about the phone being unlocked per se, as much as the fact that users of the developer version can access folders in the phone that others cannot, giving them the ability to copy copy-protected applications off the phone and onto ... other phones.

Google said in a statement:
"The Developer version of the G1 is designed to give developers complete flexibility. These phones give developers of handset software full permissions to all aspects of the device ... We aren't distributing copy protected applications to these phones in order to minimize unauthorized copy of the applications."
It seems like Google erred in their form of DRM. By doing nothing more than copying the app into a private folder that owners of the developer unlocked phone could get at, they pretty much neutered their DRM. Yet, preventing people who paid a premium price for these unlocked phones from gaining full access to all possible applications seems, well, evil from a company who's unofficial motto is "Don't be evil."

Our thought is they will come up with a modified form of DRM, and eliminate the blocking. Otherwise they may face their first genuine anti-Google revolt.