The fundamental damage that Apple has done to itself involves trust. IT may be glad that now unencrypted iPhones and iPod Touches -- meaning every model except the iPhone 3G S released earlier this year -- aren't violating their security policies. But IT won't be happy about learning those devices were unsecurely accessing their Exchange servers or about dealing with all those users whose iPhones and iPod Touches suddenly have lost access to Exchange.
No good options to fix the problem
And IT won't be happy to follow Apple's official suggestions: Either replace the devices with 3G S models or change the security policies to allow at least iPhone users to access Exchange without requiring on-device encryption. Neither option is realistic, and both show an amazing naïveté, or perhaps arrogance, about Apple's view of the business environment.
The third option -- downgrading the iPhone OS to 3.0 -- is unrealistic for many users. If you're lucky and the last backup of your iPhone has the previous OS, go to iTunes and click Restore. Otherwise, you need to have a copy of a 3.0-based backup (Mac OS X users who have Time Machine running likely will), or you need to download the 3.0 version from BitTorrent or other questionable sites, then restore your iPhone or iPod Touch using that older OS. Note that you have to Option-click in Mac OS X or Shift-click in Windows the Restore button in iTunes to be able to choose that backed-up or downloaded 3.0 OS. After the restore is complete, you'll likely have to reinstall some apps, update your music files, and so forth to reflect changes made since the last backup; if you have no backup, you're essentially starting over. Despite what I read on various blogs, I was able to restore an unsanctioned iPhone OS 3.0 onto my iPod Touch using the new iTunes 9.
I have my Exchange access back -- but I had to become a hacker to do it. Few people will do that. And many organizations may decide to ban all iPhones and iPod Touches from Exchange rather than risk access by unencrypted devices that hack around their security policies by dowbngrading to the 3.0 OS or not upgrading to the 3.1 version.
There's a fourth possible option, which is the only one that would satisfy legitimate IT security concerns: Apple revs iPhone OS to include software encryption, so the pre-3G S devices can honestly tell Exchange 2007 they support on-device encryption. But Apple has avoided implementing such encryption since Day 1, except for the 3G S released in July. I'm betting there's a reason the on-device encryption is available only on the faster-chip model. Plus, Apple has been very clear in saying it won't support simultaneous processes in the iPhone OS for third-party apps, which any software encryption would likely need to be. But Apple does support some simultaneous processes in the OS and its own apps, such as for message notification.
Does Apple have a plan to reenable the pre-3G S models' ability to work with Exchange when encryption is a requirement? I asked Apple that question yesterday, and a spokeswoman said she would let me know when she had an answer. So far, there is none.
The sick feeling of betrayal
I really like my iPod Touch, but at this point, I won't buy another one or an iPhone. Right now, I simply can't count on Apple to do the right thing. If I did get a 3G S or some future encryption-enabled iPod Touch model, what other nasty surprise will I find a year on?