Re: Apple--the new Microsoft

Resistance is futile


"Elmo P. Shagnasty" <elmop@nastydesigns.com> wrote in message
news:elmop-7CFD3A.16174808092007@nntp1.usenetserver.com...
> Is Apple the New Microsoft?
> Don't look now, but the role of the industry's biggest bully is
> increasingly played by Apple, not Microsoft.
> Mike Elgan, Computerworld
> Friday, September 07, 2007 8:00 AM PDT
>
>
> Ten years ago, Microsoft was the company everyone loved to hate.
>
> The most vociferous Microsoft haters slammed the company for being a
> greedy industry bully that used its monopolistic, clunky, copycat
> operating system to force software on users and coerce partners into
> unfair licensing deals.
>
> Don't look now, but the role of the industry's biggest bully is
> increasingly played by Apple, not Microsoft. Here's a look at how Apple
> has shoved Microsoft aside as the company with the worst reputation as a
> monopolist, copycat and a bully.
>
>
>
> Apple the monopolist
>
> The core complaint about Microsoft in the 1990s was that its Windows
> market share gave it monopoly power, which it abused in multiple ways.
> Attorneys General and others zeroed in on the "bundling" of the Internet
> Explorer Web browser, which they claimed was forced on users because
> Microsoft offered it as part of Windows.
>
> People love iPods (including me; my family of four has purchased 12
> iPods in the past few years). But iPods come bundled with iTunes. Want
> to buy music from Apple? Guess what? You must install iTunes. Want an
> Apple cell phone from AT&T? Yep! ITunes is required even if you want
> only to make phone calls. Want to buy ringtones for your Apple phone?
> ITunes.
>
> Apple not only "bundles" iTunes with multiple products, it forces you to
> use it. At least with Internet Explorer, you could always just download
> a competitor and ignore IE.
>
> Not fair, you might say. Any hardware device that syncs data with a PC
> as part of its core functionality has software to facilitate that
> syncing. True enough. But operating systems have browsers as part of
> core functionality, too. Doesn't Mac OS X come with Safari? Doesn't the
> iPhone?
>
> And "bundling" works. Steve Jobs bragged this week that Apple has
> distributed 600 million copies of iTunes to date. The overwhelming
> majority of those copies were iTunes for Windows. And iTunes for
> Windows' popularity isn't driven by software product quality. ITunes is
> the slowest, clunkiest, most nonintuitive application on my system. But
> I need it because I love my iPods.
>
> At least with Windows, you could reformat your PC and install Linux or
> any number of other PC-compatible operating systems. Can I reformat my
> iPod and install something else? Can I uninstall iTunes but keep using
> the iTunes store and my iPods? Apple strongly discourages all that,
> claiming that the iPod, the iPod software and iTunes are three
> components of the same product. But that's what Microsoft said about
> Windows and IE.
>
>
>
> Sorry, dad
>
> Here's a scenario for you. A consumer walks into a local retail outlet
> to buy a Christmas present for dad. The Apple iPod "section" of the
> store dwarfs the section where all the also-ran players are displayed.
> IPod is clearly the trusted standard. The consumer buys a shiny new
> "Fatty" iPod nano with video.
>
> Dad opens the present and is excited. He follows the directions,
> installs iTunes and immediately splurges on a few dozen songs at the
> iTunes store. He loves it, and is an instant convert to portable digital
> music.
>
> The only downside is that he works out every day at the gym, where
> cardio machines face TVs that broadcast sound over FM radio. Six months
> later, when his iPod is stolen, he goes to buy another player -- this
> time, he hopes, with an FM radio in it. Several competitors offer this
> feature, but not iPods. He's about to choose a new player with an FM
> radio when it hits him: None of his files -- now totaling 300 songs and
> 50 movies -- will play on the new player. He bought and paid for all
> this content, but it only works with iPods and iTunes.
>
> Apple has an iPod customer for life. Microsoft never had this kind of
> monopoly power. Sorry, dad. I should have bought you a tie.
>
>
>
> Sticker shock
>
> Another clue that a company has monopoly power is when you find yourself
> suffering sticker shock. How many times have you stood in line at the
> theater megaplex and marveled at the chutzpah required to charge $4.50
> for a soft drink, when the same beverage is one-third the price at the
> quickie mart 50 feet outside the theater doors? But -- so sorry! -- no
> outside food or beverages are allowed in the theater. The theater has a
> monopoly on soft drink sales, and you'll pay what they charge.
>
> That same shock rippled through the iPhone enthusiast community
> yesterday when Jobs announced with a straight face that iPhone ringtones
> based on iTunes songs would cost the full price of the song, plus 99
> cents extra. What? The full song costs 99 cents! How on Earth can Apple
> seriously charge the same amount again for the ability to hear just 30
> seconds of the song -- the same length as the free iTunes "samples"?
>
> Apple fully understands the power of monopoly pricing. The company has
> sold the 8GB iPhone for two prices in its short, three months of
> existence: $599 and, now, $399. When the iPhone was the only way to get
> the whole multitouch, big-screen, Wi-Fi iPod experience -- when the
> product had no alternatives -- the price was $599. One analyst estimated
> Apple's cost to build an iPhone is $245.83. I don't know if that's true
> but, if so, more than half the user cost was profit. That's theater soda
> pricing. But as soon as Apple introduced an alternative to the iPhone --
> the iPod Touch -- Apple dropped the price by one-third.
>
> Imagine if another company were allowed to compete in the OS X media
> player market. These players would all drop to below $300. Don't hold
> your breath, though; it'll never happen. Apple has the power to exclude
> all others from software than runs on its media players. Microsoft could
> only dream of such power.
>
>
>
> Apple the copycat
>
> Ten years ago, Microsoft haters complained that Windows followed the Mac
> OS to market as a graphical user interface, copying the Mac's features
> such as folders, trash cans, resizable windows and other elements. That
> complaint was repeated with each new version of Windows -- Apple was the
> innovator in the operating system space, and got there first with a host
> of key features. Microsoft just came along later, duplicated features
> that Apple pioneered, and reaped the benefit because of its monopoly
> power.
>
> But who's innovating now? The LG KE850 was winning awards for its
> full-screen, touch-screen, on-screen keyboard before Jobs even announced
> the iPhone.
>
> The best thing about the iPhone and iPod Touch -- the warm-and-fuzzy
> multitouch UI with gestures -- wasn't new, either. Various labs have
> been demonstrating similar UIs for more than a decade, and even
> Microsoft demonstrated a fully realized 3G UI in May, well before Apple
> shipped the iPhone. Microsoft will ship its tabletop UI, called
> Microsoft Surface, in November, and Apple will likely enter this space
> with a 3G UI months or years after Microsoft does.
>
> And Wi-Fi in a media player? Ha! Microsoft's funky Zune had that almost
> a year before Apple did and SanDisk's Sansa Connect with Wi-Fi was
> released last June. Apple even stole the name for its iPod Touch
> product, according to HTC, which sells a touch-screen smart phone called
> the HTC Touch.
>
> Don't get me wrong. I think Apple's execution of these features is far
> better than its competitors'. And it would be horrible decision-making
> to not build the iPhone simply because others pioneered key features.
> But that's not what I'm talking about. I'm talking about Apple doing
> what Microsoft did: dominating the market with features other companies
> had first. If it was fair to slam Microsoft over Windows, it's fair to
> slam Apple over the iPhone and iPod Touch.
>
>
>
> Apple the bully
>
> Microsoft used to be the big bully, pushing everyone around and
> dictating terms to partners. Microsoft has lost its edge in this regard
> -- most of Microsoft's major resellers brazenly hawk Linux. Even Intel
>-- the "tel" part of "Wintel" -- is powering Macs these days. Microsoft
> is still profitable, but it has lost control -- and has lost its
> reputation as the bully nobody can say no to.
>
> Meanwhile, Jobs has suddenly become the most feared man in Hollywood,
> bragging Thursday about Apple's scary dominance in digital media sales.
> Apple has sold more than 3 billion songs and 95 million TV shows via
> iTunes. While music CD sales crash and burn, almost one-third of all
> music sales are now digital. As Jobs euphemistically said yesterday,
> "iTunes is leading the way."
>
> Although full details haven't been revealed, NBC apparently wanted more
> "flexibility" to charge higher prices for its TV shows on iTunes. Apple
> said no, and NBC was sent packing. NBC now plans to sell shows on
> alternative locations, such as its own Web site and on Amazon.com.
> Prediction: NBC will come crawling back to Apple and beg the company for
> inclusion, and on Apple's terms. Why? Because iTunes is increasingly
> becoming the only venue in which media companies can succeed selling
> music and TV show.
>
> Jobs rules like Bill Gates never did. If you want to succeed in the
> digital music or downloadable TV business, you'll do things his way.
>
>
>
> Why I support Apple
>
> After reading my preceding comments, you may be surprised at my next
> statement: I come not to bury Apple, but to support it.
>
> You see, my point isn't that Apple's growing bad reputation is deserved,
> but that Microsoft's wasn't. All that evil monopoly hype, court cases
> and public posturing directed for so long at Microsoft drained energy
> and resources from the entire industry. The market, however, corrects
> issues such as that. In the case of Microsoft's "monopoly," Linux,
> Firefox and now Apple prove that customers always had choices.
>
> The same goes for Apple.
>
> As pundits, bloggers, users, politicians, Hollywood big shots,
> regulators, lawyers and competitors increasingly bash Apple, accuse it
> of unfair play and call for legal and regulatory action, I will defend
> it, as I defended Microsoft. It's fun to slam big, powerful companies
> that are dominating their markets. But in the final analysis, Apple has
> earned its growing power and influence, just like Microsoft did.
>
> Is Apple a monopolist, copycat and bully? Yes, and deservedly so. And if
> anyone thinks Apple's success is a problem, well, bringing in the
> lawyers wasn't the solution for Microsoft, and it won't be the solution
> for Apple.
>
> Mike Elgan writes about technology and global tech culture. Contact Mike
> at mike.elgan@elgan.com or his blog, The Raw Feed.
>