You’re correct when you say that Artie didn’t (and doesn’t) understand how the iPhone works. In fact, none of them on the show understand it — except perhaps Richard and Ralph, because they have iPhones. The rest of them regularly make off-hand comments (like the one Artie made) that don’t apply to the iPhone, because they don’t “get” it. The comments typically aren’t mean-spirited; they’re simply rooted in ignorance. (For example, they don’t seem to understand that iPhones are regularly updated with new features via software updates. No one explains these things, and they go off on tangents, based upon misinformation.)

I have familiarity with high-level artist contracts. I suspect there’s language in Howard’s contract that specified (and therefore limited) the types of devices that would carry his program. Remember — when Howard’s contract went into effect (in late 2005), the iPhone didn’t exist. So, although the iPhone app does *not* do anything different (doesn’t allow the user to *record* the show, for example — unless I’m mistaken), the simple fact that it wasn’t mentioned in Howard’s contract is probably a sticking point. Even though he probably realizes (now, after consulting with attorneys) that Apple is *not* profiting off of the iPhone app, he does realize that the iPhone is wildly successful. So, he’s probably looking for some way to monetize this new deployment. He probably wants a share of the $2.99, because the iPhone wasn’t mentioned in his original agreement.