I have written an application for Apple's iOS which embeds messages in JPEG files using steganography (see http://en.wikipedia.org/wiki/Steganography). For the purposes of this question lets assume that my steganography algorithm is well known, but I also use random embedding locations (meaning that a key is required to extract the payload).
In my mind this classifies as encryption, but what if I didn't use random embedding (anyone who detected the cover image could extract the payload using raster scan mode)?
This is more for my curiosity, and I will be filling out my application submission to claim encryption functionality regardless because I offer and additional layer of encryption in my application.