The developer version of the G1 comes unlocked from particular mobile operators and is priced at $400 (£280). Anyone who joins the Android developer programme for $25 (£17.50) can buy the phone.
Last week, Google employees began replying to questions people posted on the Android Market (its app store) help website about being unable to see copy protected applications in the store.
Google is preventing owners of the unlocked G1 handset from downloading apps from Android Market
"If you're using an unlocked, developer phone, you'll be unable to view any copy-protected application," Google employee Ash said on the help site in reply to a user's question on Friday. "This is a change that was made recently."
While Google offered only slim details about why it made the change, it could be an attempt to close a loophole that reportedly allows users of the unlocked phone to download paid applications for free.
"The Developer version of the G1 is designed to give developers complete flexibility," Google said. "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 minimise unauthorised copy of the applications."
A couple of developers have theories about the issue behind the move. Tim at the Strazzere.com blog discovered that protected applications are automatically downloaded into a private folder on Android phones. Most phone users can't access that file but users of the Developer phone can.
That means a Developer phone user could buy an application, copy it from the private folder, return the application for a refund and then re-download the application to the phone, the developers say. The Android Market allows anyone to return an application within 24 hours.
The Phandroid blog and a few developers commenting on the blog said they were able to download and copy-protected applications. Some developers are surprised that assigning the application to a specific folder is the only copy protection given to applications.
It's unclear how many people have the unlocked version of the phone. But some vocal developers are very annoyed that they paid for the phone and aren't allowed to access all of the apps in the store.
One, who goes by the name bakgwailo, is proposing a 'developer revolt', where all developers pull their applications from the store. "It would be the only way to show Google that this is NOT acceptable, and that devs are not second (third?) class citizens on the Market," he said.
"I do not know about you, but I am beyond angry that I can not even see my own paid app on the Market with my 400 dollar dev phone!"
"This is a big problem for everyone who has a Dev phone," one developer using the name oscillik said. "Assuming that we're pirates is very offensive."