Apple’s iPhone & iTunes Monopoly? Seriously?

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I've been covering Apple for just about twelve years now, and during that time I've seen a lot of very, very stupid things written (and said) about Apple. I've written and said some of them myself, though I'd like to think my less-stupid utterings outnumber the mistakes, but that's not my point -- pointing out some new silliness would be my point.

David Coursey wrote a column today titled, "Apple's iPhone and iPod Monopolies Must Go." Now, I have long been a fan of Mr. Coursey and his writing. He's a mainstream tech writer who often has interesting and insightful things to say about Apple and the rest of the tech world, and I normally thoroughly enjoy his columns.

This new column, however, is interesting mainly for the opportunity it presents to try (again) to correct this misconception that Apple's iPhone/iPod + iTunes ecosystem represents a monopoly. Or, to quote my friend Peter Cohen (quoting The Princess Bride - $8.99 at Amazon), "I do not think it means what you think it means."

Mr. Coursey wrote, "Is it really in customers' best interest for Apple to have such tight control over what iPhone and iPod users can buy? Of course not. With the Obama Justice Dept. seemingly looking for evil monopolies to take apart, maybe Apple would be a good place to start."

Mr. Coursey is not the first to get this very fundamental issue wrong, but his column today will serve as a nice building block to address the broader concept of: WTF?!??!?!?!?!?!?!?! PROPRIETARY DOES NOT EQUAL A FRAKKING MONOPOLY!

Let's look at the basic issues:

1.) Apple doesn't have a monopoly on online music or application stores, digital media devices, or smartphones. There are dozens of competing online services, scores of competing devices, and Apple is the #3 smartphone vendor in the U.S., and lower in the global market.

I mean, duh.

2.) A brand is not a market. iPods, iPhones, and Macs are competing products among many in a broader market of digital media devices, smartphones, and computers. The same goes for iTunes.

3.) Apple doesn't even have monopoly power in any of these markets. The music industry held Apple hostage to DRM schemes by refusing to give up DRM until Apple gave the labels the power to stupidly jack up prices on new music. If Apple had monopoly power, such a battle could not have taken place -- oh, and the labels won in case you didn't notice.

That's why every competing music download service had DRM-free tracks before Apple did.

The only thing Apple has control of is the ability to create hardware and software that are tied together in a compelling way that many people find delightful. This is the heart of any proprietary system, the vast majority of which have eventually failed in the face of open competition. Indeed, Apple's success with these platforms is a rare victory for proprietary systems, especially in the world of technology.

Those basic points alone should be enough to point out the absurdity of Mr. Coursey's basic premise, but I also want to take a moment to sing the praises of proprietary platforms. We should be singing Apple's praises for how Apple has made these products, not demanding that they be torn down and opened up to every newcomer.

For instance, let's at one of Mr. Coursey's last lines, where he wrote, "I am not trying to suggest incredible wrongdoing on Apple's part. I am, actually, a huge fan of what the company has done both in selling both content and applications."

What so many people (mostly outside of the Mac community) seem to either not understand or want to disregard is that it is the proprietary nature of Apple's (mostly) closed ecosystem that is at the heart of why using iTunes and iPods and iPhones is so cool that people have flocked to it, even though none of the three components are the cheapest solutions available.

In other words, being a fan of the iTunes experience, or of Mac OS X for that matter, and wanting Apple to open them up for licensing are completely inconsistent. Were Apple to open up iTunes (or Mac OS X) to manufacturers of other products, it would cease to be the easy-to-use product that you liked in the first place.

It is the ability to control the whole widget that allows Apple to craft this user experience -- as great as Apple's engineers are, as strong as Steve Jobs's vision is, if Apple had to license to any and all newcomers, the loss of control over the end-to-end solution would result in products that did not always work seamlessly together.

Were the Feds to heed the calls of Mr. Coursey and force Apple to end its (nonexistent) "monopoly," the end result would eventually be a product and experience likely to be on par (OK, slightly better) than what comes out of Redmond.

So if you like iTunes, or if you like Mac OS X, get an Apple product with which to use them. It's part of why you like them in the first place. If you don't want to be tied to Apple, go use one of the many, many craptacular competing solutions on the market. They exist because Apple doesn't have a monopoly on anything, except for maybe good taste, but that's a subject for another time.

Comments

Kh?rt Williams

Amen, brother!

jfbiii

...until Apple gave the labels the power to stupidly jack up prices on new music.

Yeah, amazing how the labels have dropped the prices on so large a portion of their back catalog. No matter, new music comes from lots of places that aren’t ripping off artists to pay for label fat cats. Because who really needs new Black-Eyed Peas or something done by an American Idol sell-out.

Zarko

I think that in a lot of cases you are right—Apple’s integration of platforms is a great value-added element to apple products that separates them from their competitors; and apple is generally acting in that vein as opposed to as a monopolic power manipulating markets.  However, Apple does skirt that line and comes remarkably close to the Windows/IE case which prevailed in europe and was quashed in the US due to political pressure in a business-friendly administration.  I think especially spurious is apple maliciously updating iTunes the break syncing with the Pre. (one of the points in David Coursey’s column)  I’m not necessarily saying that Apple should have to allow iPod-quality syncing to any music player that comes knocking, but to intentionally block a competitor who has engineered it’s own way into the system is an action that could qualify as more of a abuse of monopoly position than a benign act.  With the iTunes Music Store still serving around 75% of digital music downloads and being the largest distributor of music online or off, Apple could easily be found to have monopoly power.  Windows did not have a 100% lock on operating systems to exert monopoly power as Netscape and Real Networks can attest.  With Apple actively crippling their software that interfaces the iTunes Store, they are leveraging their dominance in both the portable music player and music downloads arenas to bolster their success—if only marginally—in the smartphone market.  That is textbook abuse of monopoly power.  Apple may make a better iPhone that MS’s IE, but if I’m on the jury Apple is just as guilty as MS was.

wiredzen

? I think especially spurious is apple maliciously updating iTunes the break syncing with the Pre. (one of the points in David Coursey?s column)? I?m not necessarily saying that Apple should have to allow iPod-quality syncing to any music player that comes knocking, but to intentionally block a competitor who has engineered it?s own way into the system is an action that could qualify as more of a abuse of monopoly position than a benign act.?

This is not really true. Yes, Missing Sync is a hack, but so is half of everything people add to their computers, Mac or otherwise. And Missing Sync has not been denied access by Apple:

http://www.ipodobserver.com/ipo/article/mark_space_says_missing_sync_still_works_for_itunes_palm_pre/

JulesLt

iTunes file are stored in a standard directory structure, and the library d/b also saved in XML format. If third parties can’t work out a way to ‘sync’ using that, then they deserve what they get.

As for proprietary ecosystems, there are more of them than we think - the games console market has always belonged to proprietary systems, despite publishers like EA wanting the market to standardise.

Arguably, things progress faster when proprietary systems compete, than when there is a standard (but prices fall faster when there is a standard) - the home computer market being a case in point (fast progress through the 80s, slow progress in the early-mid-90s, then the battle between the graphics cards companies (proprietary systems battling underneath DirectX)).

trrll

No, it’s not at all like the Windows/IE case, which was about Microsoft tying IE into Windows at a low level such that you had to have IE.

Apple has done nothing at all to lock out competing music players, phones, or music stores. If you don’t want to use Apple products other than the OS, you can simply throw iTunes in the trash and install one of the many competing music players, and nothing horrible will happen.

It’s worth noting that this is typical of Apple, in the sense that what Apple normally does is to put the equivalent of a chain on the door—almost a token indication that Apple doesn’t authorize this practice. If you really want to run OS X on a non-Apple computer,  jailbreak your iPhone, or sync your Pre with iTunes you can do it—it just takes a little time with Google, and you lose the convenience of being able to routinely install every Apple software update.

kimhill

Yes, that Coursey column was one of the dumbest pieces of tech commentary I’ve ever read.

Thing is, David Coursey is not that dumb. I think he was trolling for hits.

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