The US Justice Department also sued Microsoft for violating a 1994 consent decree by forcing computer makers to include its Internet browser as a part of the installation of Windows software.
Didn't you first grade teacher tell you encyclopedias are not valid sources? The US DoJ doesn't sue anyone. They convict them for violating the law. When the DoJ gets involved in an antitrust lawsuit it becomes a criminal case. Aside from that, yes the DoJ went after MS for a lot of different aspects of abuse. How does that indicate that one aspect by itself is not illegal?
iTunes is not an operating system. It is an application. It can easily be deleted by dropping the iTunes.app folder in the trash.
Yeah and I can easily erase a hard drive that comes with Windows. Did you have some sort of a point? Do you think antitrust law is written about operating systems in specific and does not apply to applications as opposed to being written about markets and applying to any product in a market regardless of it is an OS or a service or oil?
I can easily use Amazon, MP3.Com, Napster, or any other number of online music sites to purchase music.
Good for you. Can you also install Linux or Solaris? Can you install OpenOffice? None of you points in any way mean Apple may not have enough influence on the market in question to qualify under the law.
No amount of whining will change that fact.
Why are you whining? Here's a better idea, actually read and understand the wikipedia link you sent so you grasp the concept.
You don't understand the arugment[sic]. Does Apple have a monopoly on DRM Fairplay media?
That's not a relevant market with regard to antitrust law, the only aspect of law that makes Apple's actions potentially illegal.
The term is "significant barrier" to entry in the marketplace. The fact that others can and have created other online stores negates your arugment[sic] that Apple has a monopoly.
That's not how monopolies are defined.
Amazon has quite a successful online store.
Amazon and all other competitors combined are half the size of Apple alone. That's not particularly successful in terms of markets. This means Apple has a lot of influence on music buyers. If, for example, they were to blacklist an artist that would be a serious threat to that artist's ability to make money distributing music (not that the RIAA isn't already the same.
You can load nonDRMed AAC onto a Palm Pre.
You can run Windows programs in WINE. That does not negate the possibility that the digital music market is being leveraged. It doesn't have to be impossible to be a breach, it just has to make it harder for people who don't use Apple's product in a separate market.
Other OS's exist for the PC however none of them have been able to gain anything in the marketplace. Some of this was to due to tactics by MS.
This is actually irrelevant to antitrust law as it applies here because it is perfectly legal to gain a monopoly via several methods. Apple isn't being accused of illegally maintaining a monopoly, just leveraging the monopoly into another market.
Huh? Palm is free to write an iTunes plugin to sync up with their Palm devices.
They are, but not with the same APIs Apple uses and without the same level of functionality. Don't you think if Palm could get the same level of functionality using a plug-in they would have done it? Do you think they'd be risking censure from the USB committee if they had an easy way to compete evenly with the iPhone? The point is, right now iTunes the program is the interface to iTunes the store and plugging in in iPhone and plugging in any other device results in different functionality within iTunes. If iTunes constitutes a monopoly, which it well could, that is clearly tying.
You said: Apple is potentially leveraging their influence in the online digital music sales market to gain a competitive advantage in the smartphone market.
The fundamental complaint here is both Apple and Palm are competing in the smartphone market. Both want to deal with digital music and Apple is dominant in the digital music market. To compete fairly palm needs to be able to have the same access to the iTunes store as the iPhone does and they claim that is impossible given what Apple has presented as public APIs so they hacked a work around. The illegality of Apple's actions hinges on two things:
Apple's share of the relevant market for online music being sufficiently large in a jurisdiction for competition laws to apply.
Apple's third party interface to iTMS being inferior to the one Apple uses with the iPhone.
From where I'm sitting the first is probable in some jurisdiction and about 50/50 proposition in the US. The second seems fairly certain or either Apple or Palm would have used the third party interface and solved all potential issues like this.
Actually the ribbon style is not built for eye candy but rather for usability.
This is actually a point of contention among usability engineers.
The problem with menu style systems is that it is not intuitive.
Intuitive is a rather subjective term. Rather the question is how learnable it is and how functional.
There is resistance to the change because of 'menus are the way we are used to doing things' not necessarily the way things should be done.
The learning curve for new interfaces can be problematic. Any change will meet some resistance. MS's ribbon will probably meets more than most because of vocal minorities and because the coupled it with a switch that temporarily eliminated some features. So power users of Word were frustrated partly by a new interface but also because they assumed they could perform a task and the interface was preventing them, when in truth the task had become impossible coinciding with the new interface.
Putting features in front of the user rather than 3 to 4 deep in a menu system is far more intuitive.
The problem is if the needed feature is in front of the user and determining what is needed where. If a menu system is more than three levels deep, you've failed as a UI designer.
In fact I think the office ribbon layout is due to a massive amount of consumer research on Microsoft's Behalf.
The consensus I've seen seems to be that it is based off of the the U of W's Decision-Theoretic UI project, but where MS was unable to get it to work properly so they scrapped the fundamental adaptive nature and just kept the UI style. The underlying concept resulted in mixed results for UI designers in the first place, so maybe that isn't too terrible and the design of the elements they copied were at least sensible and obeyed fundamental principals of UI design.
MS does not seem to have published their usability testing (if they did it and followed the results which is always a question with MS) but have published PR pieces claiming that user studies show improved usability; of course not publishing that underlying study either. Scholarly works to date seem to contradict their claims, but some of those were a little less than methodical in implementation. I think MS managed to piss a lot of people off and introduce a new UI scheme which is questionable but not terrible in and of itself.
Perhaps - but this issue should be taken through the proper venue to be resolved.
Antitrust charges often start as civil suits. Having real damages to show can make a difference in many ways. Our legal system is slanted towards trying to take an action and then suing and showing you were harmed when you tried.
There are some arguments in favor of Apple's position... perhaps if they don't defend their exclusive use of the "iPod/iPhone interface" they could lose exclusivity here, and ultimately be forced to support other vendors products...
The only thing I can think of that remotely resembles what your describing is trademark law. That's not really an issue here.
Doesn't Apple have a right to a competitive advantage that they spent many many $$s creating specifically so that they would sell more of their product?
Only if that competitive advantage is not leveraging dominance in a market where they have overwhelming (monopoly) influence as they potentially do in the online digital music download market. Then it becomes criminally using dominance in one market to artificially do better in another instead of competing on merits in the second market. That dominance is the real question here.
There is an interesting argument against Apple's position: iPhoto works with a wide variety of cameras, not just one or two brands. Apple works hard to make it as compatible as possible with as many different cameras as possible. Apple doesn't make a camera - would they be so generous with iPhoto if they did?
Apple is free to make a camera and to shut out anyone they want with iPhoto at the same time. That's legal. Right up until iPhoto or the iCamera or another Apple product in a market they've tied to it gains monopoly influence on that market.
Of course, iTunes does work without an iPod.
This is true and a good point. The potential problem here though is that the iTunes music store doesn't work without the iTunes application. So anything integrating with the iTunes application is subject to antitrust concerns because of the iTMS's market dominance. The question is how much influence it has and what level of responsibility does that place on Apple.
Other vendors figured out how to interface to iTunes without pretending to be an iPod.
Yes, but they settled for a lesser level of functionality that the iPod or iPhone has. You'll note Apple has more functionality and does not use the method they provide to third parties. I liken this to the public APIs MS let Netscape use and the secret APIs IE used.
Was violating the USB standard the only way they could interface with iTunes?
Judging from their actions, they seem to think it was the only way to get parity with iPhones suing iTunes.
In the end, as long as Apple isn't breaking any laws, I think they should be free to do as they choose...
And that's the question isn't it. Apple is walking a fine line of antitrust law here and may well be violating it in some jurisdictions. A legally conscientious company would either divorce ITMS form iTunes the application or provide a single API for iTunes which is public and which Apple sues for their own devices.
And if Palm thinks Apple has created an illegal tie-in, there are venues within which Palm can air that complaint and see if they can get a legal authority with appropriate jurisdiction to agree with them.
That's true, but Palm has more effective legal options now that they can show real damages. Sadly, our courts are very ineffective so this is likely to be one of those lawsuits that lasts years and either turns into an antitrust case somewhere or is settled where Apple pays a lot of money to keep such a conviction from happening.
That's not even the relevant market in this discussion. The relevant market would be online digital music sales. i.e iTunes Music Store.
Unless you buy DRMed Fairplay, that is not a monopoly.
Monopolies are defined by influence on the market, but market share is usually the largest determining factor. Apple has about 69% of the online digital music market as it is usually defined. Many regulators use 70% as a rule of thumb to determine if a single player is sufficiently dominant. Some restrictions in some jurisdictions take effect when a company becomes the single, largest player or has 40% or more. For all intents and purposes, Apple is restricted in behavior by at least some antitrust laws at this point and the courts could easily rule them to have monopoly influence. Or the courts could rule the other way. In any case, it is a close decision, and arbitrarily stating they aren't one based upon if they have DRM shows you don't understand how such determinations are made.
Also other competitors are free to create their own music stores.
Other companies are free to create desktop OS's. That doesn't do anything to mitigate MS's legal antitrust responsibilities with regard to their monopoly on desktop OS's
Also you limited the argument to one mode of distribution. You can get music without ever going to an online store from both legal and illegal sources.
This is referred to as a "market definition" and is one of the most important aspects of an antitrust case. For example, the EU does not consider Apple to have a monopoly on portable, digital music players (their market definition) based upon the fact that they include media playing cell phones in that market definition. Previous court cases, however, make it likely the market definition is going to be limited to online sales of digital music files for complete songs and will not include CDs. That's not a certainty, but it is likely.
Some people use P2P to get their music illegally.
This is a good example of something that won't be included as part of the market for music in competition to Apple.
My recollection is different than MS simply including a browser in their OS and trying to integrate it. I remember them threatening and strong-arming OEMs not to include Netscape as a browser on installs.
There were many aspects to the case, but simply bundling the two products alone would have been sufficient legally. The rest is just determining the extent of guilt and damage and liability. You can look to the more recent EU case, where there is no evidence of such action, but the courts are certainly going to convict MS for simply bundling IE and Windows.
Wasn't the point of contention in your original argument about the music store and not the app store? Palm can't access iTunes software. However Palm could access nonDRMed music as well as iTunes metadata...
My argument is about the music store not the app store. Palm cannot integrate with the music store on a level playing field with Apple because Apple uses one method to integrate with the iPod and iPhone, allowing users to manage them from within iTunes which is the interface for the store. They provide a separate method, with lesser functionality for third parties who are using devices and who also want to buy from the store. If Apple wants this problem to go away, one solution is to use the same method of access for the iPhone that they provide to Palm for the Pre. That's a level playing field.
But about the app store:
I don't see why you bring the App store up. I never mentioned it. It integrates with the iPhone and iPod touch, but as far as I know there are no antitrust concerns with the App store at all.
How can they stifle competitoon when APPLE PUBLISHES AN API THAT DOES EXACTY WHAT PALM WAS TRYING TO DO
I don't believe this is true. Apple publishes a plug-in architecture, but it is less capable than the features used by iPods and the iPhone within iTunes. If Apple wants to get rid of any antitrust complaints from anyone going forward though they have a simple path. Apple can use their own plug-in architecture for the iPhone and all devices will have the same level of compatibility.
Let me just be clear here since you don;t seem to understand what "anticompetitive means" - if Palm want to sync the Pre with iTunes, they can write a plugin for it.
Supporting other players in a market less than you support your own is still an antitrust violation if Apple has dominance in a relevant market. Netscape won in court even though MS supplied Windows APIs, partly because MS did not use those APIs for IE, but used secret APIs. That's where Apple is now, from what I can tell.
I wasn't aware that Apple is preventing Palm from writing their own sync software? Did I miss that in TFA?
I wasn't aware MS was preventing Netscape from writing a browser for Windows. I must have missed that article too when MS was convicted.
As much as the Apple haters might not want to acknowledge, the ability to sync with iTunes is fully open.
Apple haters? Nice ad hominem. I writing this from Safari in OS X. The more capable method Apple uses for interaction with the iPhone is not open. MS used their own, more capable API's with IE and let Netscape use less capable ones. That's enough to be antitrust abuse if there is actually a monopoly in one of the markets.
There is also nothing preventing someone from using iTunes to purchase music.
And there's nothing preventing you from downloading Linux and running netscape on it. There was nothing preventing you from downloading files with IE and then using Netscape to look at them. That does nothing to alleviate the tying or potential antitrust ramifications.
Are you seeing why MS's antitrust abuse makes for a fairly reasonable comparison?
Although, I really don't think people are going to buy a device based on the fact that it does or does not interface with iTunes.
You may be right. The point of this article is that Palm disagrees and is going to great lengths to try to integrate more fully with iTunes because they think that will get them more sales. Apple has been actively blocking those attempts although their opinion could be the same as yours, but they are still concerned about making sure developers go through the less capable interface for maintenance reasons.
Another criteria is that there must be significant barriers to entry in that market for competitors. Judging by the dozens of competing players you can find at a local Best Buy alone, that criteria does not seem to be satisfied.
That's not even the relevant market in this discussion. The relevant market would be online digital music sales. i.e iTunes Music Store.
Even if Apple has a monopoly, that in itself is not illegal.
True.
Here is where the comparison with MS doesn't work. MS was found to have a monopoly and used illegal tactics to maintain that monopoly.
False. MS was convicted of using their monopoly one one market to gain market share without competing in other, separate markets, notably: web browsers, media players, and server OS's. MS did settle numerous lawsuits with regard to illegally stifling competitors in their primary market and in office suites as well, but have not been convicted that I know of.
Apple is potentially leveraging their influence in the online digital music sales market to gain a competitive advantage in the smartphone market. A comparison with MS, who used their desktop OS market to gain an unfair advantage in the web browser market, for example, is a pretty reasonable one in many ways.
Does Apple have a 95% share of the portable music player market? I don't think so, a quick Google shows it to be between 70 and 80%. That's not a monopoly.
Legally speaking, you actions are likely restricted by antitrust law if you have a significant portion of a market, with 70% being the rule of thumb used by investigators and influence on customers being the determining factor. So in terms of law, yes 90% is almost certainly a monopoly and actions taken by a company that has 90% of a market had bloody well better be in compliant with antitrust law if they don't want to be charged with a crime.
So, what this is saying is that I can't slap a ford logo on my toyota and expect ford to warranty it for me?
Not at all. That would be trademark law a completely separate issue. They're saying you can't sell Ford trucks with instructions that say, "take it to the Toyota's Only gas pumps and just tell them it's a toyota when you want gas" because you signed a contract with the gas cap and fill port regulatory body that says you'll tell gas stations what brand of truck it really is.
There are other online music stores that ONLY sell music and not hardware and they make money. They have less volume as well so the business model can and does make a profit.
First, Apple's major competitor (Amazon) was given a better deal on selling music than Apple, specifically because the illegal cartel controlling music publishing (RIAA in the states) wanted Apple's market share to decrease so it did not threaten their own power. Basically, everyone in the music business makes money as the RIAA allows.
Second, Apple probably can make money selling music instead of hardware, especially if they raise prices on music. They won't make as much money and Apple is a business. Apple will follow the path of greatest profit. If Apple lets the Pre integrate with iTunes they might, if they are lucky, get $20 in profit over the lifetime of the Pre. If they sell an iPhone they make more like $500-600 in profit over the lifetime of the device. Why would any businessman i their right mind be concentrating on the former rather than the latter, when the latter is making Apple one of the more profitable companies around?
Apple is not supporting other companies' phones in iTunes as well as it is supporting the iPhone. Ergo, Apple is potentially leveraging dominance in online digital music sales to win smartphone sales over Palm
There's a world of difference between "as well as" and "not at all".
Legally and economically speaking, not as much as you'd think. Microsoft was found guilty in actions against Netscape where they provided Netscape and other vendors with APIs to work with Windows, but they were not the same APIs Internet Explorer used. MS wasn't supporting Netscape "not at all" just not "as well as" they did IE.
At 69% there's no definition that would even label Apple a monopoly
None of the laws I know of specify a percentage. It is always based upon influence in the market and on customers. 70% is often used as a "rule of thumb" by investigators. So there is certainly room for doubt, especially since 69% is an old figure and we don't know how much of the total market is pertinent to this specific market.
...much less there being any grounds to do so given that the phone can use music from any other store now that DRM is gone from the scene.
That's irrelevant to the issue of tying i this case.
But "Fault" implies Apple has done something wrong. Apple has done everything right in terms of law and frankly even ethically.
Apple may be in violation of antitrust law and they may be undermining a healthy market and thereby stifling innovation and competition. That would be both illegal and unethical, if it turns out to be the case. From a practical standpoint, with numbers getting as close as they are the pertinent thing to do in a normal market would be to break the tying between iTMS and iTunes the application just to make sure there won't be legal issues going forward. I give Apple some slack in this regard since the market is so broken and they're dealing with several outstanding criminal antitrust violators the courts have not effectively acted against. In these markets breaking the law and then trying to weasel out of punishment after dragging things out in court... well that's the status quo and business as usual. But that's Apple joining the ranks of MS and the RIAA for shady business practices and some of us dislike those organizations because of their shady business practices.
Even if Apple were a monopoly it would not be Apple's "Fault" or illegal behavior to follow standards.
No it would be their fault for undermining competition. They're big boys and have lots of lawyers and economists and know what's going on here and how legally questionable some of their actions are. When you commit murder you aren't at fault for firing a gun. That's the mechanism by which you committed the crime. If you fire the gun in a two-handed weaver stance down a shooting range you've followed the standards, but if you saw someone you did not like down range, you aren't free of guilt for murder because you fired a gun in a "standards compliant" fashion.
Yeah but it's still money. They wouldn't have to do anything different other than allow the devices to connect. That's it.
Allow me to introduce you to the topic of opportunity cost. A smart business person evaluates what happens in both situations, sees which is likely to make the most money, and does that. So lets see the possibilities:
Possibility 1: Apple does nothing. Palm interacts with iTunes better and as a result sells P1 Pre's. For each user of a Pre or an iPhone Apple makes an average of T dollars profit on iTMS sales. Apple sells A1 iPhones. Let H stand for the profit Apple makes on each iphone sale. Apple's profit is P1*T + A1*T + A1*H = overall profit.
Possibility 2. Apple pays their engineers to keep the Pre from working at a manpower cost D. Palm interacts with iTunes worse and Palm makes fewer sales as a result, some of whom buy iPhones from Apple instead. P2 is Pre sales in this scenario which will be lower than P!. A2 is iPhone sales which is higher than A1. H remains the same. Apple's profit is P2*T + A2*T + A2*H - D = overall profit.
You'll note that in these numbers if T is small and H is large a small decrease of P2 compared to P1 is vastly overweighed by a small increase of A2 over A1. I'm guessing in the real world T is probably something like $2 and H is something like $500. Apple sells about 20 songs per iPod sold and makes nine cents on each sale. Apple makes a bit over $500 for every iPhone they sell over the two year contract. This is all really rough math.
Plugging in the numbers that means each iPhone sale Apple makes will net them 250 times as much profit as a Pre sale if Pre's work well with iTunes. So you can see why their priority is on making iPhones more attractive compared to Pre even if their method of selling more iPhones is to make Pre's not work well with the iTMS.
Hopefully you're getting the point. While Apple may make money by doing nothing, there is a lost opportunity which shows up as a cost in Apple's calculations. They do what makes them the most money and selling even a few more iPhones makes them more money than selling a bunch of music to Pre owners.
All Apple is refusing to do for Palm is let them integrate Pre into the main iTunes application. That would require Apple to publish and maintain a plug-in API for iTunes which would cost Apple money. Why should they?
Allow me to present some potential answers. If Apple has sufficient influence in the online digital music market such that it constitutes overwhelming influence on customers, then legally and economically several things are important. iTunes is the only interface to the iTMS. That ties the two products legally and economically. Interfaces to iTunes, therefore, are also interfaces to iTMS. At that point Apple is legally obligated to provide competitors to their products in other markets with the exact same access Apple themselves have with Apple products. That is to say, if an iPod connects to iTunes in a particular way, that method has to be available to other music players. If other music players, including smartphones have to access iTunes via plug-in which does not allow them to manage it within iTunes, then Apple's own iPhone must use the same plug-in architecture without using anything not available to other implementors. This is similar to how MS (having a monopoly on desktop OS's) was found guilty of using one set of APIs for IE and presenting a less capable set to competing browsers like Netscape.
Now even if all those things are true (and Apple's share of the relevant market is borderline) Apple doesn't have to maintain a plug-in API for iTunes. They have numerous options for alleviating the problem, including untying iTunes and the iTunes store by connecting them with a published API and allowing other stores to plug-in to iTunes the application and other applications to plug into the store. That neatly bypasses any problems with iTunes the application, although it does open the way for companies like Microsoft to integrate the iTMS into WMP, thereby greatly lessening installs of iTunes while nat addressing their own illegal tying.
Why the hell would Apple not want other devices syncing with their software? That could open up a whole new line of devices for which to sell apps and music from their iTunes store to.
Apple gives away the software so they don't profit there. Apple runs the iTMS at a level that makes very little money as a way to sell more iPods and iPhones. iPhones are making a huge portion of Apple's revenue these days. Selling an iPhone is profitable. Selling tracks from iTMS makes a pittance. The only reasons Apple created it and continues to run it is to sell hardware. If you aren't buying a Mac, iPod, or iPhone, you'll have to buy a whole crapload of music for it to make the same profit for Apple. Apple is more interested in motivating sales of iPhones over Pre's than in selling music tracks where they won't make real money.
Apple doesn't want devices to lie. Palm wants to lie. This is fairly simple.
Palm doesn't want to lie. They want to interoperate with Apple's software and use the same features as Apple's hardware does. Lying, is the method by which Palm attempted to do this.
It's so discouraging to see that it's OK to lie as long as your[sic] lying to a company that you don't like.
So you think it is immoral to do things like change the User Agent string in your browser in order to view a Web page that filters non-IE browsers? That's lying to the Website operator, but is certainly not objected to by the average Slashdot reader and Apple themselves make it easy to do in Safari.
I love how the comments immediately blame Apple for all of this. How is this any of Apple's fault?
Apple is not supporting other companies' phones in iTunes as well as it is supporting the iPhone. iTunes is the only interface to the iTunes store which sells 69% of all digital music in the US. Ergo, Apple is potentially leveraging dominance in online digital music sales to win smartphone sales over Palm, not by making the iPhone better than the Pre, but by leveraging their share of a separate market.
Apple is not the most open company around, but if openess is what you want then don't buy Apple, it's not like you're forced to.
That's a fine argument right up until Apple gains monopoly influence on a market. Then while you may not be physically forced to do business with Apple, you are strongly pressured economically by market forces to do business with Apple and it is Apple's legal responsibility to make sure it is not using overwhelming share in one market to gain unfairly in any other.
That is not to say Apple necessarily has enough share of the online digital music market to qualify, especially given the potential for a better market definition by the courts. I'm just explaining how this is (potentially) Apple's fault legally and in terms of economics.
However, that said, I can't see tying attempts between products(above and beyond the natural tying effects that the complexity of software interaction naturally produces) as being even a remotely good thing for users, competition, or technological development generally.
In a healthy market those things are not a significant problem. Tying products in general is a net negative for users so they tend to move to other products and the vendor doing the tying goes out of business or changes. There's absolutely nothing wrong with selling bleach and floor wax in the same package in a bottle with two reservoirs and nozzles. Legally and economically this hurts no one. It may result in the seller making fewer sales.
Imagine if, back in the day, the "Well, they should just write their own iTunes-like application" had been applied to Compaq and the IBM-compatible clone kiddies. "Well, they can just write their own OS and set of applications..."
The problem comes in when you're dealing with a company that has overwhelming influence on one of the markets involved. At that point the company has too much power over customers in one market and leverages that to gain an advantage in another market. If, in our theoretical example above, only one company sold household bleach, it would be destroying the market for floor wax to tie it to bleach. It would not matter if another company sold better or cheaper floor wax, because everyone would be forced to buy their competitor's in order to get bleach. And while theoretically people could throw away that floor wax and pay a second time to get a different brand, realistically that is not how the economics work out. For that reason tying products when there is a monopoly in one market is both illegal and economically destructive. it undermines the drive for lower costs and innovation that fair competition bring about by leveraging financial self interest.
So looking to your example, IBM had monopoly influence at the time IBM compatible clones were appearing. IBM did try to stop them but the courts properly intervened. So where does this leave us? Does Apple have monopoly influence on the market in which iTunes (the application) operates or in the markets it's tying to iTunes (the application) in this case. There are plenty of music jukebox software packages and iTunes (the application) is not even the most common one. In this instance Apple is giving preferential interaction with its own iPhone product, but the iPhone does not dominate the smartphone or cell phone market, so that too is not harming the market. If people are inconvenienced by Apple's choice to tie the two they can and will buy a different phone and a different music playing application.
Then we get into the two iffy areas. Apple ties their iTunes store (service) to their iTunes application. iTunes (service) sells 69% of online digital music in the US and that is about where the courts have traditionally started to consider a company to have monopoly influence. Moreover, Apple gives preference in connecting to ITunes (application) to iPods and iPods make up about 73% of digital music players, excluding cell phones. You'll notice the last caveat. The EU said Apple doesn't have monopoly influence in that market because cell phones are considered options by average users buying mp3 players. That may be different in the US where phones are locked to cell providers. So on both counts, Apple could be guilty of antitrust action. On the first count, the antitrust action could be seen as damaging Palm by using one level of indirection to leverage Apple's dominance in online music sales to win more market for smartphones, when in a free market Palm would otherwise win more share. This is concerning because it could be holding back innovation and hurting the progress of technology.
Now before we rush off on an antitrust campaign against Apple, however, I feel it pertinent to mention the rest of the equation. When the courts took effective action agai
Kind of scary that revenge was valued higher then deterrence and seems self defeating. I'm no vulcan, but seems illogical.:-/
Logically we'd never be in need of any such system. As designed, however, it was a logical way to deal with illogical people. It was a deterrent to nuclear war in that it was designed to prevent a soviet officer with assurance that it would never be too late to retaliate. In such a way it appeased their illogical desire for revenge and deterred them from making a mistake because of that desire, a mistake which could result in an actual, nuclear shooting war because of a mistaken interpretation. Remember this is at a time when we were telling the Russians we were going to build a system so we could kill them but they couldn't kill us and had just deployed missiles that we claimed could hit them in a very short period of time, meaning they had to act more hastily with fewer facts in order to retaliate. In fact, this system probably did a lot to mitigate the potential damage actions on the part of the US created. This thing was being built while US military officials were just as hotheaded and vengeful, lying to our leaders by intentionally bypassing the safeguards on launching our own missiles.
Some anti-Yankees (North Korea) could detonate a warhead to set off Perimeter, and wipe us off the map. Maximum return on investment.
It doesn't work that way. High command has to enable it because they saw what they think was a launch from us. Then the detonation would have to sever all communication between command and the bunker. Then, an officer in the bunker would have to look at the seismograph and radiation data and misinterpret it to think there had been a major attack that wiped out all the people in charge and in turn order a launch.
What's the point of building a Doomsday machine if you don't tell everyone about it?
That point is well covered in the article:
By guaranteeing that Moscow could hit back, Perimeter was actually designed to keep an overeager Soviet military or civilian leader from launching prematurely during a crisis. The point, Zheleznyakov says, was "to cool down all these hotheads and extremists. No matter what was going to happen, there still would be revenge. Those who attack us will be punished."
The machine was designed as a deterrent to soviet military commanders, not to deter the US.
How does that work? In a proprietary project if your boss says "do this" you either do it or find another job. In an open source project you could just flame the hell out of the guy that told you on the public mailing list and carry on working on something else.
The difference is whether or not your boss tells you to do it or whether he tells you to work on new feature X, that will add a bullet point to the marketing materials. Whether commercial or noncommercial, open or closed, customers want bug fixes and new features and better performance and all sorts of improvements to code. Proprietary projects can be just as bad or worse about allocating human resources appropriately to deal with what actually needs to be done. With commercial software, if you have enough money you can make deals contingent upon certain work being done or you can look for a different projects. With open source software, you can do the same, or you can hire someone else to work on the project and meet your needs, forking it if necessary.
And in a proprietary project if customers want something fixed they can threaten to not pay which in even the most incompetent company will tend to make your boss tell you to fix it.
Have you worked in proprietary software? Generally when someone wants something fixed it's after they've already paid. They can threaten to sue, or to not buy the next version, but in many cases that does not justify the cost to perform fixes unless they're one of your really, really big clients. I remember sitting in a meeting where it was revealed three clients who had already bought our product wanted us to fix a bug, but British Telecom had just made adding a new feature contingent upon our getting a multimillion dollar sale. Guess where we allocated our resources.
In open source that mechanism does not exist.
What? In open source not paying is the norm. That doesn't mean you can't offer to pay, contingent upon your problems getting solved. It's the same thing except you only pay when you really need something and no one else has already paid for it. That's how real businesses deal with open source software. They use it for free, but if they need something fixed they source in house coders or hire someone as a contractor to solve the problems.
Your statement is like saying, "Olympic athletes don't get paid for competing and there's no mechanism whereby they will appear and endorse products for money, because they aren't doing it for the money." It completely ignores the reality of how most open source software is actually written for commercial gain by paid coders.
The deployment of Macs in enterprise and large business has been interesting. Seven years ago, there were a few Macs in IT at most places I worked. Four years ago, Macs outnumbered PCs at many IT and engineering shops, especially in the security field where I was working at the time. Today, I'm doing some contract work for a huge organization, where one department has over 2,000 desktops and there are hundreds of departments. They didn't even ask before hiring me if I had access to a Mac and they rely upon several Mac only programs for day to day business. Everyone I've worked in IT (with exception of one new manager) has a Mac laptop as their primary machine.
I know a lot of the transition has been in specific fields and my experiences do not represent the market as a whole, but the transition has been quite drastic. It gives me some hope for a truly competitive desktop OS market and for related markets. Some day maybe we'll get past MS and technology can rapidly advance again.
I agree, and I'm failing to see the news in the story here - the pro-Apple spin ("poaching" etc) is painfully apparent.
A lot of people on Slashdot do like Apple products and even some of the other things the company does. That said, I don't see any bias in the discussion here, or at least none that is not justified. "Poaching' is a normal term in the industry, not a slur against MS. I've seen plenty of comments about Google and other companies poaching employees. It just means hiring people away from your competitors or people in a similar field.
I bet if this was the other way round, the story would be citing it as proof that employees want to work for Apple, and saying that therefore Apple were great employers, and how nice they are.
This is called empty speculation. You have nothing to support this assertion.
I'm also confused at the snide dig of "besides copying Apple's retail formula" - so they invented some special retail now?
Umm, you don't think opening stores with a "Guru bar" where people can come and ask experts questions from within the retail store is not just a little bit influenced by Apple retail stores where you can go to a "Genius bar" and ask experts questions? I'm sorry but you have to be biased as hell to not see that as copying Apple's retail ideas.
Slashdot Mirror
The US Justice Department also sued Microsoft for violating a 1994 consent decree by forcing computer makers to include its Internet browser as a part of the installation of Windows software.
Didn't you first grade teacher tell you encyclopedias are not valid sources? The US DoJ doesn't sue anyone. They convict them for violating the law. When the DoJ gets involved in an antitrust lawsuit it becomes a criminal case. Aside from that, yes the DoJ went after MS for a lot of different aspects of abuse. How does that indicate that one aspect by itself is not illegal?
iTunes is not an operating system. It is an application. It can easily be deleted by dropping the iTunes.app folder in the trash.
Yeah and I can easily erase a hard drive that comes with Windows. Did you have some sort of a point? Do you think antitrust law is written about operating systems in specific and does not apply to applications as opposed to being written about markets and applying to any product in a market regardless of it is an OS or a service or oil?
I can easily use Amazon, MP3.Com, Napster, or any other number of online music sites to purchase music.
Good for you. Can you also install Linux or Solaris? Can you install OpenOffice? None of you points in any way mean Apple may not have enough influence on the market in question to qualify under the law.
No amount of whining will change that fact.
Why are you whining? Here's a better idea, actually read and understand the wikipedia link you sent so you grasp the concept.
You don't understand the arugment[sic]. Does Apple have a monopoly on DRM Fairplay media?
That's not a relevant market with regard to antitrust law, the only aspect of law that makes Apple's actions potentially illegal.
The term is "significant barrier" to entry in the marketplace. The fact that others can and have created other online stores negates your arugment[sic] that Apple has a monopoly.
That's not how monopolies are defined.
Amazon has quite a successful online store.
Amazon and all other competitors combined are half the size of Apple alone. That's not particularly successful in terms of markets. This means Apple has a lot of influence on music buyers. If, for example, they were to blacklist an artist that would be a serious threat to that artist's ability to make money distributing music (not that the RIAA isn't already the same.
You can load nonDRMed AAC onto a Palm Pre.
You can run Windows programs in WINE. That does not negate the possibility that the digital music market is being leveraged. It doesn't have to be impossible to be a breach, it just has to make it harder for people who don't use Apple's product in a separate market.
Other OS's exist for the PC however none of them have been able to gain anything in the marketplace. Some of this was to due to tactics by MS.
This is actually irrelevant to antitrust law as it applies here because it is perfectly legal to gain a monopoly via several methods. Apple isn't being accused of illegally maintaining a monopoly, just leveraging the monopoly into another market.
Huh? Palm is free to write an iTunes plugin to sync up with their Palm devices.
They are, but not with the same APIs Apple uses and without the same level of functionality. Don't you think if Palm could get the same level of functionality using a plug-in they would have done it? Do you think they'd be risking censure from the USB committee if they had an easy way to compete evenly with the iPhone? The point is, right now iTunes the program is the interface to iTunes the store and plugging in in iPhone and plugging in any other device results in different functionality within iTunes. If iTunes constitutes a monopoly, which it well could, that is clearly tying.
You said: Apple is potentially leveraging their influence in the online digital music sales market to gain a competitive advantage in the smartphone market.
The fundamental complaint here is both Apple and Palm are competing in the smartphone market. Both want to deal with digital music and Apple is dominant in the digital music market. To compete fairly palm needs to be able to have the same access to the iTunes store as the iPhone does and they claim that is impossible given what Apple has presented as public APIs so they hacked a work around. The illegality of Apple's actions hinges on two things:
From where I'm sitting the first is probable in some jurisdiction and about 50/50 proposition in the US. The second seems fairly certain or either Apple or Palm would have used the third party interface and solved all potential issues like this.
Actually the ribbon style is not built for eye candy but rather for usability.
This is actually a point of contention among usability engineers.
The problem with menu style systems is that it is not intuitive.
Intuitive is a rather subjective term. Rather the question is how learnable it is and how functional.
There is resistance to the change because of 'menus are the way we are used to doing things' not necessarily the way things should be done.
The learning curve for new interfaces can be problematic. Any change will meet some resistance. MS's ribbon will probably meets more than most because of vocal minorities and because the coupled it with a switch that temporarily eliminated some features. So power users of Word were frustrated partly by a new interface but also because they assumed they could perform a task and the interface was preventing them, when in truth the task had become impossible coinciding with the new interface.
Putting features in front of the user rather than 3 to 4 deep in a menu system is far more intuitive.
The problem is if the needed feature is in front of the user and determining what is needed where. If a menu system is more than three levels deep, you've failed as a UI designer.
In fact I think the office ribbon layout is due to a massive amount of consumer research on Microsoft's Behalf.
The consensus I've seen seems to be that it is based off of the the U of W's Decision-Theoretic UI project, but where MS was unable to get it to work properly so they scrapped the fundamental adaptive nature and just kept the UI style. The underlying concept resulted in mixed results for UI designers in the first place, so maybe that isn't too terrible and the design of the elements they copied were at least sensible and obeyed fundamental principals of UI design.
MS does not seem to have published their usability testing (if they did it and followed the results which is always a question with MS) but have published PR pieces claiming that user studies show improved usability; of course not publishing that underlying study either. Scholarly works to date seem to contradict their claims, but some of those were a little less than methodical in implementation. I think MS managed to piss a lot of people off and introduce a new UI scheme which is questionable but not terrible in and of itself.
A few notes on your commentary:
Perhaps - but this issue should be taken through the proper venue to be resolved.
Antitrust charges often start as civil suits. Having real damages to show can make a difference in many ways. Our legal system is slanted towards trying to take an action and then suing and showing you were harmed when you tried.
There are some arguments in favor of Apple's position... perhaps if they don't defend their exclusive use of the "iPod/iPhone interface" they could lose exclusivity here, and ultimately be forced to support other vendors products...
The only thing I can think of that remotely resembles what your describing is trademark law. That's not really an issue here.
Doesn't Apple have a right to a competitive advantage that they spent many many $$s creating specifically so that they would sell more of their product?
Only if that competitive advantage is not leveraging dominance in a market where they have overwhelming (monopoly) influence as they potentially do in the online digital music download market. Then it becomes criminally using dominance in one market to artificially do better in another instead of competing on merits in the second market. That dominance is the real question here.
There is an interesting argument against Apple's position: iPhoto works with a wide variety of cameras, not just one or two brands. Apple works hard to make it as compatible as possible with as many different cameras as possible. Apple doesn't make a camera - would they be so generous with iPhoto if they did?
Apple is free to make a camera and to shut out anyone they want with iPhoto at the same time. That's legal. Right up until iPhoto or the iCamera or another Apple product in a market they've tied to it gains monopoly influence on that market.
Of course, iTunes does work without an iPod.
This is true and a good point. The potential problem here though is that the iTunes music store doesn't work without the iTunes application. So anything integrating with the iTunes application is subject to antitrust concerns because of the iTMS's market dominance. The question is how much influence it has and what level of responsibility does that place on Apple.
Other vendors figured out how to interface to iTunes without pretending to be an iPod.
Yes, but they settled for a lesser level of functionality that the iPod or iPhone has. You'll note Apple has more functionality and does not use the method they provide to third parties. I liken this to the public APIs MS let Netscape use and the secret APIs IE used.
Was violating the USB standard the only way they could interface with iTunes?
Judging from their actions, they seem to think it was the only way to get parity with iPhones suing iTunes.
In the end, as long as Apple isn't breaking any laws, I think they should be free to do as they choose...
And that's the question isn't it. Apple is walking a fine line of antitrust law here and may well be violating it in some jurisdictions. A legally conscientious company would either divorce ITMS form iTunes the application or provide a single API for iTunes which is public and which Apple sues for their own devices.
And if Palm thinks Apple has created an illegal tie-in, there are venues within which Palm can air that complaint and see if they can get a legal authority with appropriate jurisdiction to agree with them.
That's true, but Palm has more effective legal options now that they can show real damages. Sadly, our courts are very ineffective so this is likely to be one of those lawsuits that lasts years and either turns into an antitrust case somewhere or is settled where Apple pays a lot of money to keep such a conviction from happening.
That's not even the relevant market in this discussion. The relevant market would be online digital music sales. i.e iTunes Music Store.
Unless you buy DRMed Fairplay, that is not a monopoly.
Monopolies are defined by influence on the market, but market share is usually the largest determining factor. Apple has about 69% of the online digital music market as it is usually defined. Many regulators use 70% as a rule of thumb to determine if a single player is sufficiently dominant. Some restrictions in some jurisdictions take effect when a company becomes the single, largest player or has 40% or more. For all intents and purposes, Apple is restricted in behavior by at least some antitrust laws at this point and the courts could easily rule them to have monopoly influence. Or the courts could rule the other way. In any case, it is a close decision, and arbitrarily stating they aren't one based upon if they have DRM shows you don't understand how such determinations are made.
Also other competitors are free to create their own music stores.
Other companies are free to create desktop OS's. That doesn't do anything to mitigate MS's legal antitrust responsibilities with regard to their monopoly on desktop OS's
Also you limited the argument to one mode of distribution. You can get music without ever going to an online store from both legal and illegal sources.
This is referred to as a "market definition" and is one of the most important aspects of an antitrust case. For example, the EU does not consider Apple to have a monopoly on portable, digital music players (their market definition) based upon the fact that they include media playing cell phones in that market definition. Previous court cases, however, make it likely the market definition is going to be limited to online sales of digital music files for complete songs and will not include CDs. That's not a certainty, but it is likely.
Some people use P2P to get their music illegally.
This is a good example of something that won't be included as part of the market for music in competition to Apple.
My recollection is different than MS simply including a browser in their OS and trying to integrate it. I remember them threatening and strong-arming OEMs not to include Netscape as a browser on installs.
There were many aspects to the case, but simply bundling the two products alone would have been sufficient legally. The rest is just determining the extent of guilt and damage and liability. You can look to the more recent EU case, where there is no evidence of such action, but the courts are certainly going to convict MS for simply bundling IE and Windows.
Wasn't the point of contention in your original argument about the music store and not the app store? Palm can't access iTunes software. However Palm could access nonDRMed music as well as iTunes metadata...
My argument is about the music store not the app store. Palm cannot integrate with the music store on a level playing field with Apple because Apple uses one method to integrate with the iPod and iPhone, allowing users to manage them from within iTunes which is the interface for the store. They provide a separate method, with lesser functionality for third parties who are using devices and who also want to buy from the store. If Apple wants this problem to go away, one solution is to use the same method of access for the iPhone that they provide to Palm for the Pre. That's a level playing field.
But about the app store:
I don't see why you bring the App store up. I never mentioned it. It integrates with the iPhone and iPod touch, but as far as I know there are no antitrust concerns with the App store at all.
Had Apple acted like MS...
But Apple has taken an action directly ak
How can they stifle competitoon when APPLE PUBLISHES AN API THAT DOES EXACTY WHAT PALM WAS TRYING TO DO
I don't believe this is true. Apple publishes a plug-in architecture, but it is less capable than the features used by iPods and the iPhone within iTunes. If Apple wants to get rid of any antitrust complaints from anyone going forward though they have a simple path. Apple can use their own plug-in architecture for the iPhone and all devices will have the same level of compatibility.
Let me just be clear here since you don;t seem to understand what "anticompetitive means" - if Palm want to sync the Pre with iTunes, they can write a plugin for it.
Supporting other players in a market less than you support your own is still an antitrust violation if Apple has dominance in a relevant market. Netscape won in court even though MS supplied Windows APIs, partly because MS did not use those APIs for IE, but used secret APIs. That's where Apple is now, from what I can tell.
I wasn't aware that Apple is preventing Palm from writing their own sync software? Did I miss that in TFA?
I wasn't aware MS was preventing Netscape from writing a browser for Windows. I must have missed that article too when MS was convicted.
As much as the Apple haters might not want to acknowledge, the ability to sync with iTunes is fully open.
Apple haters? Nice ad hominem. I writing this from Safari in OS X. The more capable method Apple uses for interaction with the iPhone is not open. MS used their own, more capable API's with IE and let Netscape use less capable ones. That's enough to be antitrust abuse if there is actually a monopoly in one of the markets.
There is also nothing preventing someone from using iTunes to purchase music.
And there's nothing preventing you from downloading Linux and running netscape on it. There was nothing preventing you from downloading files with IE and then using Netscape to look at them. That does nothing to alleviate the tying or potential antitrust ramifications.
Are you seeing why MS's antitrust abuse makes for a fairly reasonable comparison?
Although, I really don't think people are going to buy a device based on the fact that it does or does not interface with iTunes.
You may be right. The point of this article is that Palm disagrees and is going to great lengths to try to integrate more fully with iTunes because they think that will get them more sales. Apple has been actively blocking those attempts although their opinion could be the same as yours, but they are still concerned about making sure developers go through the less capable interface for maintenance reasons.
Highest markeshare != monopoly.
True.
Another criteria is that there must be significant barriers to entry in that market for competitors. Judging by the dozens of competing players you can find at a local Best Buy alone, that criteria does not seem to be satisfied.
That's not even the relevant market in this discussion. The relevant market would be online digital music sales. i.e iTunes Music Store.
Even if Apple has a monopoly, that in itself is not illegal.
True.
Here is where the comparison with MS doesn't work. MS was found to have a monopoly and used illegal tactics to maintain that monopoly.
False. MS was convicted of using their monopoly one one market to gain market share without competing in other, separate markets, notably: web browsers, media players, and server OS's. MS did settle numerous lawsuits with regard to illegally stifling competitors in their primary market and in office suites as well, but have not been convicted that I know of.
Apple is potentially leveraging their influence in the online digital music sales market to gain a competitive advantage in the smartphone market. A comparison with MS, who used their desktop OS market to gain an unfair advantage in the web browser market, for example, is a pretty reasonable one in many ways.
Does Apple have a 95% share of the portable music player market? I don't think so, a quick Google shows it to be between 70 and 80%. That's not a monopoly.
Legally speaking, you actions are likely restricted by antitrust law if you have a significant portion of a market, with 70% being the rule of thumb used by investigators and influence on customers being the determining factor. So in terms of law, yes 90% is almost certainly a monopoly and actions taken by a company that has 90% of a market had bloody well better be in compliant with antitrust law if they don't want to be charged with a crime.
So, what this is saying is that I can't slap a ford logo on my toyota and expect ford to warranty it for me?
Not at all. That would be trademark law a completely separate issue. They're saying you can't sell Ford trucks with instructions that say, "take it to the Toyota's Only gas pumps and just tell them it's a toyota when you want gas" because you signed a contract with the gas cap and fill port regulatory body that says you'll tell gas stations what brand of truck it really is.
There are other online music stores that ONLY sell music and not hardware and they make money. They have less volume as well so the business model can and does make a profit.
First, Apple's major competitor (Amazon) was given a better deal on selling music than Apple, specifically because the illegal cartel controlling music publishing (RIAA in the states) wanted Apple's market share to decrease so it did not threaten their own power. Basically, everyone in the music business makes money as the RIAA allows.
Second, Apple probably can make money selling music instead of hardware, especially if they raise prices on music. They won't make as much money and Apple is a business. Apple will follow the path of greatest profit. If Apple lets the Pre integrate with iTunes they might, if they are lucky, get $20 in profit over the lifetime of the Pre. If they sell an iPhone they make more like $500-600 in profit over the lifetime of the device. Why would any businessman i their right mind be concentrating on the former rather than the latter, when the latter is making Apple one of the more profitable companies around?
Apple is not supporting other companies' phones in iTunes as well as it is supporting the iPhone. Ergo, Apple is potentially leveraging dominance in online digital music sales to win smartphone sales over Palm
There's a world of difference between "as well as" and "not at all".
Legally and economically speaking, not as much as you'd think. Microsoft was found guilty in actions against Netscape where they provided Netscape and other vendors with APIs to work with Windows, but they were not the same APIs Internet Explorer used. MS wasn't supporting Netscape "not at all" just not "as well as" they did IE.
At 69% there's no definition that would even label Apple a monopoly
None of the laws I know of specify a percentage. It is always based upon influence in the market and on customers. 70% is often used as a "rule of thumb" by investigators. So there is certainly room for doubt, especially since 69% is an old figure and we don't know how much of the total market is pertinent to this specific market.
...much less there being any grounds to do so given that the phone can use music from any other store now that DRM is gone from the scene.
That's irrelevant to the issue of tying i this case.
But "Fault" implies Apple has done something wrong. Apple has done everything right in terms of law and frankly even ethically.
Apple may be in violation of antitrust law and they may be undermining a healthy market and thereby stifling innovation and competition. That would be both illegal and unethical, if it turns out to be the case. From a practical standpoint, with numbers getting as close as they are the pertinent thing to do in a normal market would be to break the tying between iTMS and iTunes the application just to make sure there won't be legal issues going forward. I give Apple some slack in this regard since the market is so broken and they're dealing with several outstanding criminal antitrust violators the courts have not effectively acted against. In these markets breaking the law and then trying to weasel out of punishment after dragging things out in court... well that's the status quo and business as usual. But that's Apple joining the ranks of MS and the RIAA for shady business practices and some of us dislike those organizations because of their shady business practices.
Even if Apple were a monopoly it would not be Apple's "Fault" or illegal behavior to follow standards.
No it would be their fault for undermining competition. They're big boys and have lots of lawyers and economists and know what's going on here and how legally questionable some of their actions are. When you commit murder you aren't at fault for firing a gun. That's the mechanism by which you committed the crime. If you fire the gun in a two-handed weaver stance down a shooting range you've followed the standards, but if you saw someone you did not like down range, you aren't free of guilt for murder because you fired a gun in a "standards compliant" fashion.
Yeah but it's still money. They wouldn't have to do anything different other than allow the devices to connect. That's it.
Allow me to introduce you to the topic of opportunity cost. A smart business person evaluates what happens in both situations, sees which is likely to make the most money, and does that. So lets see the possibilities:
Possibility 1: Apple does nothing. Palm interacts with iTunes better and as a result sells P1 Pre's. For each user of a Pre or an iPhone Apple makes an average of T dollars profit on iTMS sales. Apple sells A1 iPhones. Let H stand for the profit Apple makes on each iphone sale. Apple's profit is P1*T + A1*T + A1*H = overall profit.
Possibility 2. Apple pays their engineers to keep the Pre from working at a manpower cost D. Palm interacts with iTunes worse and Palm makes fewer sales as a result, some of whom buy iPhones from Apple instead. P2 is Pre sales in this scenario which will be lower than P!. A2 is iPhone sales which is higher than A1. H remains the same. Apple's profit is P2*T + A2*T + A2*H - D = overall profit.
You'll note that in these numbers if T is small and H is large a small decrease of P2 compared to P1 is vastly overweighed by a small increase of A2 over A1. I'm guessing in the real world T is probably something like $2 and H is something like $500. Apple sells about 20 songs per iPod sold and makes nine cents on each sale. Apple makes a bit over $500 for every iPhone they sell over the two year contract. This is all really rough math.
Plugging in the numbers that means each iPhone sale Apple makes will net them 250 times as much profit as a Pre sale if Pre's work well with iTunes. So you can see why their priority is on making iPhones more attractive compared to Pre even if their method of selling more iPhones is to make Pre's not work well with the iTMS.
Hopefully you're getting the point. While Apple may make money by doing nothing, there is a lost opportunity which shows up as a cost in Apple's calculations. They do what makes them the most money and selling even a few more iPhones makes them more money than selling a bunch of music to Pre owners.
All Apple is refusing to do for Palm is let them integrate Pre into the main iTunes application. That would require Apple to publish and maintain a plug-in API for iTunes which would cost Apple money. Why should they?
Allow me to present some potential answers. If Apple has sufficient influence in the online digital music market such that it constitutes overwhelming influence on customers, then legally and economically several things are important. iTunes is the only interface to the iTMS. That ties the two products legally and economically. Interfaces to iTunes, therefore, are also interfaces to iTMS. At that point Apple is legally obligated to provide competitors to their products in other markets with the exact same access Apple themselves have with Apple products. That is to say, if an iPod connects to iTunes in a particular way, that method has to be available to other music players. If other music players, including smartphones have to access iTunes via plug-in which does not allow them to manage it within iTunes, then Apple's own iPhone must use the same plug-in architecture without using anything not available to other implementors. This is similar to how MS (having a monopoly on desktop OS's) was found guilty of using one set of APIs for IE and presenting a less capable set to competing browsers like Netscape.
Now even if all those things are true (and Apple's share of the relevant market is borderline) Apple doesn't have to maintain a plug-in API for iTunes. They have numerous options for alleviating the problem, including untying iTunes and the iTunes store by connecting them with a published API and allowing other stores to plug-in to iTunes the application and other applications to plug into the store. That neatly bypasses any problems with iTunes the application, although it does open the way for companies like Microsoft to integrate the iTMS into WMP, thereby greatly lessening installs of iTunes while nat addressing their own illegal tying.
Why the hell would Apple not want other devices syncing with their software? That could open up a whole new line of devices for which to sell apps and music from their iTunes store to.
Apple gives away the software so they don't profit there. Apple runs the iTMS at a level that makes very little money as a way to sell more iPods and iPhones. iPhones are making a huge portion of Apple's revenue these days. Selling an iPhone is profitable. Selling tracks from iTMS makes a pittance. The only reasons Apple created it and continues to run it is to sell hardware. If you aren't buying a Mac, iPod, or iPhone, you'll have to buy a whole crapload of music for it to make the same profit for Apple. Apple is more interested in motivating sales of iPhones over Pre's than in selling music tracks where they won't make real money.
Apple doesn't want devices to lie. Palm wants to lie. This is fairly simple.
Palm doesn't want to lie. They want to interoperate with Apple's software and use the same features as Apple's hardware does. Lying, is the method by which Palm attempted to do this.
It's so discouraging to see that it's OK to lie as long as your[sic] lying to a company that you don't like.
So you think it is immoral to do things like change the User Agent string in your browser in order to view a Web page that filters non-IE browsers? That's lying to the Website operator, but is certainly not objected to by the average Slashdot reader and Apple themselves make it easy to do in Safari.
I love how the comments immediately blame Apple for all of this. How is this any of Apple's fault?
Apple is not supporting other companies' phones in iTunes as well as it is supporting the iPhone. iTunes is the only interface to the iTunes store which sells 69% of all digital music in the US. Ergo, Apple is potentially leveraging dominance in online digital music sales to win smartphone sales over Palm, not by making the iPhone better than the Pre, but by leveraging their share of a separate market.
Apple is not the most open company around, but if openess is what you want then don't buy Apple, it's not like you're forced to.
That's a fine argument right up until Apple gains monopoly influence on a market. Then while you may not be physically forced to do business with Apple, you are strongly pressured economically by market forces to do business with Apple and it is Apple's legal responsibility to make sure it is not using overwhelming share in one market to gain unfairly in any other.
That is not to say Apple necessarily has enough share of the online digital music market to qualify, especially given the potential for a better market definition by the courts. I'm just explaining how this is (potentially) Apple's fault legally and in terms of economics.
However, that said, I can't see tying attempts between products(above and beyond the natural tying effects that the complexity of software interaction naturally produces) as being even a remotely good thing for users, competition, or technological development generally.
In a healthy market those things are not a significant problem. Tying products in general is a net negative for users so they tend to move to other products and the vendor doing the tying goes out of business or changes. There's absolutely nothing wrong with selling bleach and floor wax in the same package in a bottle with two reservoirs and nozzles. Legally and economically this hurts no one. It may result in the seller making fewer sales.
Imagine if, back in the day, the "Well, they should just write their own iTunes-like application" had been applied to Compaq and the IBM-compatible clone kiddies. "Well, they can just write their own OS and set of applications..."
The problem comes in when you're dealing with a company that has overwhelming influence on one of the markets involved. At that point the company has too much power over customers in one market and leverages that to gain an advantage in another market. If, in our theoretical example above, only one company sold household bleach, it would be destroying the market for floor wax to tie it to bleach. It would not matter if another company sold better or cheaper floor wax, because everyone would be forced to buy their competitor's in order to get bleach. And while theoretically people could throw away that floor wax and pay a second time to get a different brand, realistically that is not how the economics work out. For that reason tying products when there is a monopoly in one market is both illegal and economically destructive. it undermines the drive for lower costs and innovation that fair competition bring about by leveraging financial self interest.
So looking to your example, IBM had monopoly influence at the time IBM compatible clones were appearing. IBM did try to stop them but the courts properly intervened. So where does this leave us? Does Apple have monopoly influence on the market in which iTunes (the application) operates or in the markets it's tying to iTunes (the application) in this case. There are plenty of music jukebox software packages and iTunes (the application) is not even the most common one. In this instance Apple is giving preferential interaction with its own iPhone product, but the iPhone does not dominate the smartphone or cell phone market, so that too is not harming the market. If people are inconvenienced by Apple's choice to tie the two they can and will buy a different phone and a different music playing application.
Then we get into the two iffy areas. Apple ties their iTunes store (service) to their iTunes application. iTunes (service) sells 69% of online digital music in the US and that is about where the courts have traditionally started to consider a company to have monopoly influence. Moreover, Apple gives preference in connecting to ITunes (application) to iPods and iPods make up about 73% of digital music players, excluding cell phones. You'll notice the last caveat. The EU said Apple doesn't have monopoly influence in that market because cell phones are considered options by average users buying mp3 players. That may be different in the US where phones are locked to cell providers. So on both counts, Apple could be guilty of antitrust action. On the first count, the antitrust action could be seen as damaging Palm by using one level of indirection to leverage Apple's dominance in online music sales to win more market for smartphones, when in a free market Palm would otherwise win more share. This is concerning because it could be holding back innovation and hurting the progress of technology.
Now before we rush off on an antitrust campaign against Apple, however, I feel it pertinent to mention the rest of the equation. When the courts took effective action agai
Kind of scary that revenge was valued higher then deterrence and seems self defeating. I'm no vulcan, but seems illogical. :-/
Logically we'd never be in need of any such system. As designed, however, it was a logical way to deal with illogical people. It was a deterrent to nuclear war in that it was designed to prevent a soviet officer with assurance that it would never be too late to retaliate. In such a way it appeased their illogical desire for revenge and deterred them from making a mistake because of that desire, a mistake which could result in an actual, nuclear shooting war because of a mistaken interpretation. Remember this is at a time when we were telling the Russians we were going to build a system so we could kill them but they couldn't kill us and had just deployed missiles that we claimed could hit them in a very short period of time, meaning they had to act more hastily with fewer facts in order to retaliate. In fact, this system probably did a lot to mitigate the potential damage actions on the part of the US created. This thing was being built while US military officials were just as hotheaded and vengeful, lying to our leaders by intentionally bypassing the safeguards on launching our own missiles.
Some anti-Yankees (North Korea) could detonate a warhead to set off Perimeter, and wipe us off the map. Maximum return on investment.
It doesn't work that way. High command has to enable it because they saw what they think was a launch from us. Then the detonation would have to sever all communication between command and the bunker. Then, an officer in the bunker would have to look at the seismograph and radiation data and misinterpret it to think there had been a major attack that wiped out all the people in charge and in turn order a launch.
What's the point of building a Doomsday machine if you don't tell everyone about it?
That point is well covered in the article:
By guaranteeing that Moscow could hit back, Perimeter was actually designed to keep an overeager Soviet military or civilian leader from launching prematurely during a crisis. The point, Zheleznyakov says, was "to cool down all these hotheads and extremists. No matter what was going to happen, there still would be revenge. Those who attack us will be punished."
The machine was designed as a deterrent to soviet military commanders, not to deter the US.
How does that work? In a proprietary project if your boss says "do this" you either do it or find another job. In an open source project you could just flame the hell out of the guy that told you on the public mailing list and carry on working on something else.
The difference is whether or not your boss tells you to do it or whether he tells you to work on new feature X, that will add a bullet point to the marketing materials. Whether commercial or noncommercial, open or closed, customers want bug fixes and new features and better performance and all sorts of improvements to code. Proprietary projects can be just as bad or worse about allocating human resources appropriately to deal with what actually needs to be done. With commercial software, if you have enough money you can make deals contingent upon certain work being done or you can look for a different projects. With open source software, you can do the same, or you can hire someone else to work on the project and meet your needs, forking it if necessary.
And in a proprietary project if customers want something fixed they can threaten to not pay which in even the most incompetent company will tend to make your boss tell you to fix it.
Have you worked in proprietary software? Generally when someone wants something fixed it's after they've already paid. They can threaten to sue, or to not buy the next version, but in many cases that does not justify the cost to perform fixes unless they're one of your really, really big clients. I remember sitting in a meeting where it was revealed three clients who had already bought our product wanted us to fix a bug, but British Telecom had just made adding a new feature contingent upon our getting a multimillion dollar sale. Guess where we allocated our resources.
In open source that mechanism does not exist.
What? In open source not paying is the norm. That doesn't mean you can't offer to pay, contingent upon your problems getting solved. It's the same thing except you only pay when you really need something and no one else has already paid for it. That's how real businesses deal with open source software. They use it for free, but if they need something fixed they source in house coders or hire someone as a contractor to solve the problems.
Your statement is like saying, "Olympic athletes don't get paid for competing and there's no mechanism whereby they will appear and endorse products for money, because they aren't doing it for the money." It completely ignores the reality of how most open source software is actually written for commercial gain by paid coders.
The deployment of Macs in enterprise and large business has been interesting. Seven years ago, there were a few Macs in IT at most places I worked. Four years ago, Macs outnumbered PCs at many IT and engineering shops, especially in the security field where I was working at the time. Today, I'm doing some contract work for a huge organization, where one department has over 2,000 desktops and there are hundreds of departments. They didn't even ask before hiring me if I had access to a Mac and they rely upon several Mac only programs for day to day business. Everyone I've worked in IT (with exception of one new manager) has a Mac laptop as their primary machine.
I know a lot of the transition has been in specific fields and my experiences do not represent the market as a whole, but the transition has been quite drastic. It gives me some hope for a truly competitive desktop OS market and for related markets. Some day maybe we'll get past MS and technology can rapidly advance again.
I agree, and I'm failing to see the news in the story here - the pro-Apple spin ("poaching" etc) is painfully apparent.
A lot of people on Slashdot do like Apple products and even some of the other things the company does. That said, I don't see any bias in the discussion here, or at least none that is not justified. "Poaching' is a normal term in the industry, not a slur against MS. I've seen plenty of comments about Google and other companies poaching employees. It just means hiring people away from your competitors or people in a similar field.
I bet if this was the other way round, the story would be citing it as proof that employees want to work for Apple, and saying that therefore Apple were great employers, and how nice they are.
This is called empty speculation. You have nothing to support this assertion.
I'm also confused at the snide dig of "besides copying Apple's retail formula" - so they invented some special retail now?
Umm, you don't think opening stores with a "Guru bar" where people can come and ask experts questions from within the retail store is not just a little bit influenced by Apple retail stores where you can go to a "Genius bar" and ask experts questions? I'm sorry but you have to be biased as hell to not see that as copying Apple's retail ideas.