More details have been coming out about the new iPhone prototype that was found in a Bay Area bar.

As it turns out, before being lost the phone was in the care of an Apple employee who was out at a local bar. At some point the phone was lost and later found by someone else.

From there, the person in possession of the phone apparently tried to contact Apple and return the phone (which by now had been remotely disabled.) After getting nowhere with Apple customer service, the person then turned to Gizmodo, who paid $5,000 for the device.

From there, the story ran, the engineer who lost the iPhone was outed as a 27-year-old Apple software engineer, and following a letter from Apple's attorneys, the site handed over the phone.

First a brief discussion on the issue of ethics. I will say that V3.co.uk does not pay sources for news, and we never have. For us, and most other news publications and services, that is a fundamental ethics violation and grounds for instant termination.

That said, Gizmodo is a blog and not a news service. They're in a highly competitive arena and make no pretences to being bound to the same sort of ethical standards as news media. What they do to obtain their news is up to them, and it's not up to news services to dictate the ethics of independent bloggers.

It's also worth noting that even within the news industry ethics can vary. European publications often allow vendors to pay for trips to events, something most US publications do not consider acceptable. Meanwhile, European reporters often accuse their US counterparts of not grilling companies enough on important news for fear of losing access.

Even the largest and most reputable publications will look the other way or fail to mention when an exclusive story is offered by an executive or investor looking to float a "weather balloon" and test the market response to planned projects. How often do you see "persons familiar with the matter" cited rather than "persons with a direct monetary interest in the matter?"

That's not to say that I think paying for the device was ethical. It's just to say that every site, service, paper, magazine and blog has its own standards. Gizmodo openly and readily admitted its actions, so ultimately the readers will decide.

Now, back to the story itself. Some people have criticised the decision to out the engineer who lost the iPhone. Again, not necessarily something I would have done, but at this point publicity in the blogosphere is the least of this guy's problems. If he hasn't already been fired from Apple, he's severely limited his long-term prospects with the company. Apple is notoriously strict about product leaks, and even if this guy isn't the first to lose his phone in a bar, the company won't let losing a highly-valuable piece of experimental equipment go unpunished. Blog disclosures or not, the engineer is likely polishing his CV.

Legal action from Apple? Doubtful. The guy who found the phone attempted to return it. Gizmodo did return it, and California's rules on handling lost property along with shield laws for journalists would make pursuing the case more trouble than it's worth for Apple.

Gizmodo likely won't get invited to any Apple events for a while, but it's not like they were getting special access to begin with.

Now to put everything back in perspective: in the long run, this isn't going to be big news. Apple is going to unveil the new iPhone in June and pretend this whole thing never happened (aside from a quick joke by Steve Jobs at the unveiling, perhaps). The blogs and news sites will continue on with their usual coverage, and hopefully this poor engineer who lost the iPhone will be able to move on with his life and career.

Meanwhile, a bar fly in Redwood City has enough cash to cover his tab for a good long time.

21 Apr 2010