Dan Lyons, who used to be best known as Fake Steve Jobs but who now writes for Newsweek under the name of…Dan Lyons, has written a piece called “One Bad Apple” for his new employer. It makes the case that Apple is a would-be monopolist that’s beginning to resemble the Microsoft of a decade or so–the one that wanted to dominate every market it could, and which left smaller companies with only crumbs off the table.
Lyons’ piece starts with an example that that’s not that compelling: Apple TV vs. the nifty movie box from a small company called Vudu. He correctly points out that Apple TV has added features that resemble some of those in Vudu, and that Apple cut Apple TV’s price. But Apple TV predates Vudu and sold for less than it in the first place; you can’t blame Apple for competing in a market when it was there first, and I don’t think you can criticize it for improving its product.
The story also says that Apple is the only company that can sell music for the iPod and iPhone, which is just plain wrong and has been for months: Amazon, Rhapsody, eMusic, Wal-Mart, and Lala all sell MP3s that play just fine on Apple devices; they all have millions of songs and most of them undercut Apple’s prices. That’s because the music market is slowly and surely going DRM-free, a scenario that Steve Jobs expressed support for in his famous February 2007 memo “Thoughts on Music.” Not very monopolistic.
Also mentioned: Apple’s extremely tough dealings with companies that want to sell their products in Apple Stores. It doesn’t sound like a lot of fun for iPod accessory manufacturers, but I don’t think it’s monopolistic–actually, Apple doesn’t make that much in the way of iPod and iPhone accessories, choosing to let third parties make most of them. Yes, its Made for iPod program and the importance of the Apple Store mean that it makes lots of money from other companies’ successes, but it could corner the market on most iPod-related product categories if it decided to, and it hasn’t.
Lyons is on firmest ground when talking about the iPhone’s App Store–Apple is inded the only source of iPhone applications (assuming you haven’t jailbroken your iPhone). It takes a cut of every iPhone application that isn’t free, and it gets to decide which apps can and can’t be sold. Apple would make the case that all this ensures a level of quality control that’s important for devices that use the cell network, and I can accept the notion that it’s not maintaining complete control over the iPhone platform purely out of anti-competitive instincts. But it’s not a great situation for either iPhone users or iPhone developers, and I suspect that at some point Apple will either choose to open up app sales or be forced to by market conditions. (Remember, Steve Jobs started out by maintaining that the iPhone shouldn’t be a platform for third-party apps, period.)
Oddly enough, Lyons doesn’t bring up Apple’s biggest monopoly: Unless you count tiny, vulnerable Psystar, it’s the only company on the planet that sells computers that run its own OS X, and probably always will be as long as Steve Jobs has anything to do with it. For decades, folks have argued that the Mac and Apple would be better off if it let other companies build Macs, and it seems entirely possible that the company would be more profitable at the end of the day if it chose to do so. Instead, it bundles hardware, software, and services together into an experience that it has utter control over, and settles for a small (albeit growing) slice of a very large pie.
And ultimately, I think it’s that control that drives Apple rather than a desire to crush anybody. It wants its experiences to be exactly what it wants them to be; it’s willing to frustrate other companies, and sometimes its own customers, to do so. At its worst, it’s an obnoxious control freak of a company; at its best…well, it’s still a control freak, but one that uses that control to provide the best user experiences in the industry.
That’s my take, anyhow; I’d love to hear yours…