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Is Apple the new badguy?
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Post: #1

Is Apple the New Microsoft?
Written by Mike Elgan, Computerworld
Lifted from: <a href='http://www.pcworld.com/article/id,136949/article.html' target='_blank'>http://www.pcworld.com/article/id,136949/article.html</a>
(September 7, 2007)

Quote: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.

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09-08-2007 01:31 PM
Post: #2

Quote: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.
Damn straight. It's always easier (and more fun) to poke at the bigger companies in terms of complaints. Mostly because people have much to gain from taking down a giant. It's only natural though that the more a company gets older and bigger, the less innovative it tends to get. Of course, once in a while a company comes up with something ingenious and markets it very well that it well alone pulls them up from the depths.

I've seen both love, hate and understanding for the Microsoft way of doing things on forums around. The love mostly comes from not knowing anything better, or just plain contentment. The hate usually comes from either personal experience or <a href='http://en.wikipedia.org/wiki/Fear%2C_uncertainty_and_doubt' target='_blank'>FUD</a>. The understanding usually comes from having used both, and finding both workable and having their own merits. It's the same with Apple and its products. You're going to have a majority of lovers, quite a few haters, and some in the middle.
Quote:You see, my point isn't that Apple's growing bad reputation is deserved, but that Microsoft's wasn't.
This I don't really agree with. Microsoft (and specifically Mr. Bill Gates) has said some things against the open-source community which started this whole uproar in the past. You do reap what you sow.
Quote: 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.
Choices huh? It seems he totally forgot about his dad example, speaking from a strictly legal point of view. There are alternatives to iTunes in other operating systems, but they're not as up-to-date as the real one. It's still either that or piracy. Which is what... Tongue

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09-09-2007 07:47 AM
Post: #3

In my opinion, Apple sells products that are dummy-proof. Meaning the interfaces comes with simple to understand instructions and are less hassle-free in general compared to Windows. A lot of people seem to like Apple products because of this, but I'm willing to bet the revenue Apple earns from iTunes is still much smaller than the amount of music ipod owners download for free *cough*

Also, iTunes is not the only program for ipods, and ipods can also play unprotected mp3s fine. iTunes can rip original cd's in regular mp3 format. AAC and WMA can just go and die Shifty

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09-11-2007 10:11 PM
Post: #4

Blah! screw em both, SONY for the win!!! Playstation pwns em all!! Bang bang

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09-11-2007 10:43 PM
Post: #5

<!--QuoteBegin-R.Leonhardt+September 11, 2007 10:43 pm--><div class='codebox_title'>QUOTE (R.Leonhardt @ September 11, 2007 10:43 pm)</div><div class='codebox'><div id='QUOTE'><!--QuoteEBegin--> Blah! screw em both, SONY for the win!!! Playstation pwns em all!! Bang bang [/quote:301e0393f4]
This isn't a console war topic, kid.

Quote:AAC and WMA can just go and die&nbsp; Shifty
People had stories about AAC being better for a while back, because it allows for (almost) the same quality of MP3 sound but at a lower file size, but more intensive tests show that it's not actually so. It's another format with a weird name, Ogg Vorbis that comes out on top. You can play OGG on iTunes but it requires some workaround. Plus MP3 is already much more ubiquitous. Point is that it's not being actively developed for, and that it's not the format people flock to, although it is better than most.

If only the rest of the world had hassle-free access to MP3 files like we do. Unfortunately, that's not the case, especially in America. So while I agree that some other file types can just be left to rot in the corner, if I were Apple I would still probably maintain some lossless and non-proprietary format-compatibility for the rest of my customers.

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09-12-2007 04:57 AM
Post: #6

Quote: This aint a console war kid.



lol, I know that Big grin

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09-12-2007 06:53 AM
Post: #7

.ogg music files work pretty well for cellphone players cuz they're much smaller than MP3s. Quality seems okay too.

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09-12-2007 11:45 AM
Post: #8

<!--QuoteBegin-NiX+September 12, 2007 11:45 am--><div class='codebox_title'>QUOTE (NiX @ September 12, 2007 11:45 am)</div><div class='codebox'><div id='QUOTE'><!--QuoteEBegin--> .ogg music files work pretty well for cellphone players cuz they're much smaller than MP3s. Quality seems okay too. [/quote:73d457a33c]
Personally I prefer FLAC, but then most of my music is played from burned dvds because conventional players can't carry their size/make the most of the quality.

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09-12-2007 12:21 PM
Post: #9

<!--QuoteBegin-Grimlok+September 12, 2007 05:57 am--><div class='codebox_title'>QUOTE (Grimlok @ September 12, 2007 05:57 am)</div><div class='codebox'><div id='QUOTE'><!--QuoteEBegin--><!--QuoteBegin-R.Leonhardt+September 11, 2007 10:43 pm--><div class='codebox_title'>QUOTE (R.Leonhardt @ September 11, 2007 10:43 pm)</div><div class='codebox'><div id='QUOTE'><!--QuoteEBegin--> Blah! screw em both, SONY for the win!!! Playstation pwns em all!! Bang bang [/quote:93999c667f]
This isn't a console war topic, kid.

[/quote:93999c667f]
LOL Laughing

Apple as the "Badguy"? They look more like a "Wiseguy" to me.

IMO they are just flexing their ingenuity in collecting current technology
and bringing them to costumers in easy to use and attractive packages.

But all in all, they are just providing an alternative solution.

If you think further, you will realize that they are stirring up the market
in a positive way because competitors are forced to innovate on their
own to match or even surpass the emerging giant. This results in more
feature rich products to choose from.

cabs

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09-12-2007 12:50 PM
Post: #10

<!--QuoteBegin-sforzando+September 12, 2007 12:21 pm--><div class='codebox_title'>QUOTE (sforzando @ September 12, 2007 12:21 pm)</div><div class='codebox'><div id='QUOTE'><!--QuoteEBegin--> Personally I prefer FLAC [/quote:455e67fcd9]
My hard disk cries 'ouch' already. Tongue

<!--QuoteBegin-article+--><div class='codebox_title'>QUOTE (article)</div><div class='codebox'><div id='QUOTE'><!--QuoteEBegin-->Apple the copycat[/quote:455e67fcd9]
<!--QuoteBegin-cabs+--><div class='codebox_title'>QUOTE (cabs)</div><div class='codebox'><div id='QUOTE'><!--QuoteEBegin-->Apple as the "Badguy"? They look more like a "Wiseguy" to me.

IMO they are just flexing their ingenuity in collecting current technology
and bringing them to costumers in easy to use and attractive packages.[/quote:455e67fcd9]
Or that. Both sides of the same coin, I guess.

It's hard being the leader in a field. One moment they're praising you for your great ideas, the next you're being crucified for trying to make a profit off of them... but then again, I would infer that the points raised in this article apply to a smaller population of users only. The rest of Apple's customers are very happy with their Macs and iPods.

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09-12-2007 01:52 PM
Post: #11

Bottom line...

So if you are planning on buying a mp3 player ask yourself this 2 simple questions:
"am i ready to get married to itunes (for better or for worst)?"
"wont i need the convenience of the MSC/UMS (aka drag&drop) system of transferring music & video files?"

If both your answers are "yes", do yourself a favor and buy youself an ipod
but if both your answers are "no", here is a site to get u started <a href='http://www.anythingbutipod.com/' target='_blank'>www.anythingbutipod.com</a>

This is so off topic, just don't mind my ramblings Rofl

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09-12-2007 03:11 PM
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