The Case Against Apple – My Rebuttal
Today, someone I've never met, but hold in high regard wrote a piece on how Apple has become a monopoly. Jason Calacanis jasoncalacanis published an email entitled “The Case Against Apple–in Five Parts.” You can find it: here.
This is my rebuttal to each of his five parts.
1. Destroying MP3 player innovation through anti-competitive practices.
The Zune Marketplace and the Zune software will only work with Windows. Microsoft did exactly as Jason said, and created something that only Windows users can enjoy. As a Mac user, I'm locked out of the Zune and can't participate – even if I wanted to. Apple iTunes software on Windows works to allow Windows users to enjoy their iPods and iPhones as equals to the Mac platform.
Apple built the entire iTunes ecosystem from scratch, against all odds. Apple was able to convince the major labels to allow legal downloads, with copy protection, where others had failed. Without Apple, and those early days, who knows where we'd be with downloads. The fact that most music stores (including iTunes) sell DRM free songs today is directly attributable to Apple and their stronghold over DRM'd music. Without it, Amazon would never have been able to convince the majors to let them sell DRM free content in an effort to re-level the playing field with Apple.
2. Monopolistic practices in telecommunications.
Apple's iPhone is available to users of AT&T's service, exclusively, in the US. Step away from the US, and what carriers is the iPhone available with? If you want the exclusive to end with AT&T, give Apple a reason not to renew. Convince everyone you know to leave the iPhone behind and switch to something better (or worse for that matter). When people leave the network, Apple too will leave AT&T in the US.
The fact of the matter is that Apple's total control over the device is the envy of every handset maker on the planet. It has changed the game.
3. Draconian App Store policies that are, frankly, insulting.
Jason, step back for a second and put yourself in Apple's place. One day, someone inside Apple went out on a limb and suggested that Apple create an interface for buying Apps directly from the phone, and from within iTunes. Someone agreed, and so it started. They planned, pitched, planned, wrote code, and so on until it went live.
Do you think for a second that the infrastructure they planned took in to account the demand they've seen for the App store? If they'd known that there would be over 50,000 Apps, and more than a billion downloads in the first year, don't you think they would have done a few things differently? Apple created something so amazing and so well adopted that they're having a hard time. They're figuring it all out along the way. Give me one example of another company that got something this large right the first time.
Ultimately developers will deal with this as long as they can write an App over a weekend, submit it to the store, and make $100,000 in a week. There is no other App store in existence that can even come close to those numbers. And before you scream “stronghold” understand that Apple only has 10.8% of the mobile phone market. Apple controls 100% of the Apps on 10.8% of the phones in the market. That's far from a monopoly.
Give it time, it's only been a year.. That scale and growth is unprecedented in history.
4. Being a horrible hypocrite by banning other browsers on the iPhone.
Apple's entire brand is built on reliability and trust by the consumer. Think of the irony of your earlier statement as it relates to number four: “It sucked to have to buy anti-virus software and reinstall Windows every 12 months, so moving to Apple's rock-solid and virus-free OS was, in a word, delightful.” If Apple allows programs that were able to execute their own code on the iPhone, Apple would lose the ability to control said code. If that happens, the risk of malicious code exploits increases dramatically. I for one, don't want a phone that's as susceptible to malware as Windows Mobile and Symbian. Apple's control of the platform protects its users from the very things you left Windows for.
5. Blocking the Google Voice Application on the iPhone.
This one has yet to play out, and I'll admit this is the first action that has truly baffled me. I bought and paid for GV Mobile before it was pulled, and it still works perfectly. Google Voice is a revolutionary product that will eventually rule the voice world – for business users especially. What gets me about this is that Google Voice isn't even a VOIP play, it manually connects two voice lines – leaving AT&T to make money on minutes just as before.
Questions:
1. Do you think Apple would be more, or less, successful if they adopted a more open strategy (i.e. allowing other MP3 players in iTunes)?
Apple's iTunes store would certainly sell more music, but as everyone knows Apple makes money on hardware, not music. Why is it that everyone wants to sneak in to the iTunes ecosystem? Apple built it from scratch as they were the laughing stock of the computer industry. Now that they're insanely successful, everyone wants to just pretend that they somehow deserve to be included. I call BS, and strongly recommend that any hardware vendor that wants to eat in to Apple's market build something better. Use Songbird as a platform and integrate it with Amazon's music store. It's there for the taking.
2. Do you think Apple should face serious antitrust action?
No. Keep government out of business.
3. Do you think Apple's dexterity and competence forgive their bad behavior?
No, but I do believe that the market will let Apple know when their bad behavior has gone overboard. That process may now be starting, but it's way too early to tell. We'll all know when Apple stops breaking sales records across their entire business.
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