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Capitalism needs competition, yet capitalists hate it. There is an ongoing shift to more and more resources being dedicated to protecting the returns on existin

Capitalism needs competition, yet capitalists hate it. There is an ongoing shift to more and more resources being dedicated to protecting the returns on existing assets instead of creating new assets. When there is no longer a realistic choice of whether or not to pay a fee, it starts to look very similar to a tax.

zepto 6y ago
I agree with your premise, but not your conclusion. It’s fairly obvious that Apple invests heavily in the development of iOS, the Mac and the iPad and iPhone. The people whose assets are being protected are the people sitting on large amounts of capital that they could invest in creating alternative platforms. What would it cost to build an alternative? $1BN? $2BN Epic alone has vastly more than that available to invest, and there are many others who do too. There is no reason that we shouldn’t have a third or fourth alternative given the 100s of billions of dollars sloshing around in these companies and in VCs. That would create more jobs, and would put real competitive pressure on Apple and Google. Letting a few middlemen siphon a few percent out of the App Store while degrading user experience will not. Just consider for a moment what it would take to make an actually free Linux into a viable smartphone platform (as librem and pine are trying to do). The answer is, very little for companies whose revenues are in the billions. That would create the free market they claim to want. There is no reason at all for companies and investors who think an open ecosystem would be good for them not to put $2BN into a joint venture to build an open Linux for mobile. Except that they don’t want an open platform. They just want a cut.
- tamlin 6y ago
  MBA and business students are taught the rule of three: "The Rule of Three applies wherever competitive market forces are allowed to determine market structure with only minor regulatory and technological impediments." https://iveybusinessjournal.com/publication/competitive-markets-and-the-rule-of-three/ https://iveybusinessjournal.com/publication/competitive-mark... https://en.wikipedia.org/wiki/Rule_of_three_(economics) https://en.wikipedia.org/wiki/Rule_of_three_(economics) The costs here of developing the platform and substitute services / features is high and all investors want some return on the investment. Third place companies are often stuck in the ditch going nowhere. Microsoft has deep pockets and years of experience, but ultimately bailed on Windows Phone because #3 is not a good place to be.
  - zepto 6y ago
    MBA’s also completely failed to understand low-end disruption for many years. I’m not about to accept an argument for authority from ‘what MBAs are taught’, which is usually based on analysis of past business cases. Neither should anyone else. However I agree with you about Windows phone. There is no room for a 3rd place closed ecosystem like iOS or Android, where the goal is to monetize the app distribution platform. However, there is absolutely room for an open platform where the profit comes from competitive apps that are able to do things that are not allowed under iOS and Android and can be developed by more parties. The fact that a truly open platform would get leverage the from community, only strengthens the case. If you want some MBA buzzwords as a lens, this would be called commoditizing your complement. It is in the interests of people who don’t own closed stores, for the stores to be a commodity priced at as close to cost as possible. That group has an interest in investing in such a platform. Not because of the direct ROI from platform fees, but because of the reduced costs to them, and frankly the reduction in power of companies like Apple. It’s appears that it is cheaper for them to attempt to lobby for legislation to force other people’s App stores into being a commodity (or more likely force access for a limited group), than to actually build one, or at least it’s cheaper to try that first. You can also look at low-end disruption theory.

zepto 6y ago

I agree with your premise, but not your conclusion. It’s fairly obvious that Apple invests heavily in the development of iOS, the Mac and the iPad and iPhone. The people whose assets are being protected are the people sitting on large amounts of capital that they could invest in creating alternative platforms. What would it cost to build an alternative? $1BN? $2BN Epic alone has vastly more than that available to invest, and there are many others who do too. There is no reason that we shouldn’t have a third or fourth alternative given the 100s of billions of dollars sloshing around in these companies and in VCs. That would create more jobs, and would put real competitive pressure on Apple and Google. Letting a few middlemen siphon a few percent out of the App Store while degrading user experience will not. Just consider for a moment what it would take to make an actually free Linux into a viable smartphone platform (as librem and pine are trying to do). The answer is, very little for companies whose revenues are in the billions. That would create the free market they claim to want. There is no reason at all for companies and investors who think an open ecosystem would be good for them not to put $2BN into a joint venture to build an open Linux for mobile. Except that they don’t want an open platform. They just want a cut.

tamlin 6y ago
MBA and business students are taught the rule of three: "The Rule of Three applies wherever competitive market forces are allowed to determine market structure with only minor regulatory and technological impediments." https://iveybusinessjournal.com/publication/competitive-markets-and-the-rule-of-three/ https://iveybusinessjournal.com/publication/competitive-mark... https://en.wikipedia.org/wiki/Rule_of_three_(economics) https://en.wikipedia.org/wiki/Rule_of_three_(economics) The costs here of developing the platform and substitute services / features is high and all investors want some return on the investment. Third place companies are often stuck in the ditch going nowhere. Microsoft has deep pockets and years of experience, but ultimately bailed on Windows Phone because #3 is not a good place to be.
- zepto 6y ago
  MBA’s also completely failed to understand low-end disruption for many years. I’m not about to accept an argument for authority from ‘what MBAs are taught’, which is usually based on analysis of past business cases. Neither should anyone else. However I agree with you about Windows phone. There is no room for a 3rd place closed ecosystem like iOS or Android, where the goal is to monetize the app distribution platform. However, there is absolutely room for an open platform where the profit comes from competitive apps that are able to do things that are not allowed under iOS and Android and can be developed by more parties. The fact that a truly open platform would get leverage the from community, only strengthens the case. If you want some MBA buzzwords as a lens, this would be called commoditizing your complement. It is in the interests of people who don’t own closed stores, for the stores to be a commodity priced at as close to cost as possible. That group has an interest in investing in such a platform. Not because of the direct ROI from platform fees, but because of the reduced costs to them, and frankly the reduction in power of companies like Apple. It’s appears that it is cheaper for them to attempt to lobby for legislation to force other people’s App stores into being a commodity (or more likely force access for a limited group), than to actually build one, or at least it’s cheaper to try that first. You can also look at low-end disruption theory.