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What you're describing is a monopsony, not a monopoly. And Apple is not by any contortion of the imagination a monopsony for chips. Apple and Samsung are the la

What you're describing is a monopsony, not a monopoly. And Apple is not by any contortion of the imagination a monopsony for chips. Apple and Samsung are the largest buyers, but they're barely cracking single digits market share.

adam_arthur 4y ago
I'm not describing a monopsony. I'm describing a company that is able to pay far higher than competitors due to anticompetitive practices which drive their margins far above what would be realized in a truly competitive environment. I'd gladly like to see the alternative timeline where Microsoft charged 30% for all software on windows and where you and others shamed them for it. Because I know for a fact all of those defending Apple here would have at the time
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- anonuser123456 4y ago
  Name a product Apple sells that Apple has a monopoly on.
  - adam_arthur 4y ago
    They have a monopoly on providing services within iOS. When an ecosystem becomes large enough, societally impactful enough, and is controlled exclusively by one entity, that qualifies as a monopoly within that ecosystem. You remove any capacity for competition to drive down margins. Apple can ban Spotify tomorrow to promote apple music on their devices, for example. Not anti-competitive in your mind? You have two gated monopolistic ecosystems, choose the one you want to be gouged by. In a competitive environment, margins get compressed close to cost to deliver. If a company can achieve huge margins on items that could otherwise be much cheaper to deliver in a competitive environment, that qualifies as anti competitive. How much does it cost the supplier to host apps via CDN? Or to process a single payment? Apple can take as much margin as they want on these because nobody else is allowed to provide those services within their ecosystem The law will adapt to this, it's quite obvious to those that are unbiased.
    - codehalo 4y ago
      > You have two gated monopolistic ecosystems, choose the one you want to be gouged by. Is there some number of gated ecosystems that we get gouged by that would be considered acceptable and non-monopolistic? Three, ten?
      - adam_arthur 4y ago
        It has nothing to do with competition between platforms, but competition within those platforms. When a platform reaches a sufficient size (subjective), it must be opened to competition for services provided within that platform. We're talking about the base operating system for global computing here, not a car's dashboard system
    - onlyrealcuzzo 4y ago
      > You remove any capacity for competition to drive down margins. Apple can ban Spotify tomorrow to promote apple music on their devices, for example. Not anti-competitive in your mind? The amount of REVENUE Apple makes from iTunes is likely less than $5Bn per quarter. Apple is not using their iTunes monopoly to buy chips. They're using their insane amount of phone sales (at absurd profit margins) to buy chips. Again, I hate Apple as much as anyone. Anyone who thinks Apple is a monopoly in phones is a moron. They don't even own 30% of the smartphone market... I agree Apple is anti-competitive within the ecosystem of the iPhone. That's not going to change their ability to buy all of TSMC's chips.
    - dwaite 4y ago
      > They have a monopoly on providing services within iOS. This sounds similar to how Torvalds has a monopoly on services within mainline Linux?
  - slt2021 4y ago
    Imagine Microsoft charging 30% of sales for every Windows app developer. Actually, if this were to happen back in the days, we would have everyone on Linux Desktop already...
    - adam_arthur 4y ago
      Not a chance Linux would have won out, even then
  - slt2021 4y ago
    mobile phone market. You can poll your friends, colleagues, and relatives - how many people use iPhone vs something else. If % is more than 50%, then apple is monopoly effectively same with mobile tablet market, just make a table of how many ipads vs alternatives.
    - philsnow 4y ago
      > You can poll your friends, colleagues, and relatives It only makes sense to do this on the level of a governing body, because the term 'monopoly' is defined by governing bodies and the remedies against it are enforced by the same. You can cherry-pick / gerrymander any group you want to make it look like Apple has a monopoly by the numbers, but in order to make it stick you'd need to demonstrate that Apple fixes prices (they don't, their phones cost ~2x or more what competitors' phones cost) or that they're somehow excluding other competitors from access to the phone market (they're not).
      - slt2021 4y ago
        the current definition of monopoly is coming from industrial ages, when all goods were perfectly replaceable with each other, like steel, tobacco, or grain or other commodities. From this point of view, prices of goods are similar to each other and using market share (in units sold) is good enough proxy to identify monopolists (identify monopolists using topline approach) However, iPhone is not a commodity, it comes bundled with an OS and plethora of apps and services, the whole ecosystem. per this report ( https://www.imore.com/apple-takes-75-smartphone-profits-despite-13-market-share-says-report https://www.imore.com/apple-takes-75-smartphone-profits-desp... ) it says apple is taking over 75% of profit pool of the market, despite selling only 13% in units. If we identify monopolists using bottom-line approach, then Apple will be a clear monopolist. As would be Facebook and Google. as they should be, if lawmakers truly cared about public good
        dwaite 4y ago
        > If we identify monopolists using bottom-line approach, then Apple will be a clear monopolist. Per the parent, the challenge is to convince governments to take your proposed approach. Repeating the argument to try to convince a HN crowd is not just non-productive, but counter-productive if it doesn't move toward this goal. Taking away property and/or converting investments into a utility when a business becomes too successful results in a lot of nasty byproducts and most governing bodies will shy away from this. Instead, you likely see the issue completely side-stepped. Nobody truly cares about labelling Apple a monopoly or declaring iOS to be a somehow accepted as a market onto itself - they want a change in behavior. The challenge is how to side-step this when per the letter of the law, they have literally done nothing wrong. For instance, the EU will likely get a lot of pressure due to new regulations being solely against US-headquartered countries for the primary benefit of companies in the EU.
- scarface74 4y ago
  Most of the successful companies outside of games either don’t allow in app purchases at all and you pay for the subscription outside of the App Store or give users the choice of paying outside of the App Store. And if you look at their revenue breakdown, it’s clear that most of it comes from hardware.

adam_arthur 4y ago

I'm not describing a monopsony. I'm describing a company that is able to pay far higher than competitors due to anticompetitive practices which drive their margins far above what would be realized in a truly competitive environment. I'd gladly like to see the alternative timeline where Microsoft charged 30% for all software on windows and where you and others shamed them for it. Because I know for a fact all of those defending Apple here would have at the time

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anonuser123456 4y ago
Name a product Apple sells that Apple has a monopoly on.
- adam_arthur 4y ago
  They have a monopoly on providing services within iOS. When an ecosystem becomes large enough, societally impactful enough, and is controlled exclusively by one entity, that qualifies as a monopoly within that ecosystem. You remove any capacity for competition to drive down margins. Apple can ban Spotify tomorrow to promote apple music on their devices, for example. Not anti-competitive in your mind? You have two gated monopolistic ecosystems, choose the one you want to be gouged by. In a competitive environment, margins get compressed close to cost to deliver. If a company can achieve huge margins on items that could otherwise be much cheaper to deliver in a competitive environment, that qualifies as anti competitive. How much does it cost the supplier to host apps via CDN? Or to process a single payment? Apple can take as much margin as they want on these because nobody else is allowed to provide those services within their ecosystem The law will adapt to this, it's quite obvious to those that are unbiased.
  - codehalo 4y ago
    > You have two gated monopolistic ecosystems, choose the one you want to be gouged by. Is there some number of gated ecosystems that we get gouged by that would be considered acceptable and non-monopolistic? Three, ten?
    - adam_arthur 4y ago
      It has nothing to do with competition between platforms, but competition within those platforms. When a platform reaches a sufficient size (subjective), it must be opened to competition for services provided within that platform. We're talking about the base operating system for global computing here, not a car's dashboard system
  - onlyrealcuzzo 4y ago
    > You remove any capacity for competition to drive down margins. Apple can ban Spotify tomorrow to promote apple music on their devices, for example. Not anti-competitive in your mind? The amount of REVENUE Apple makes from iTunes is likely less than $5Bn per quarter. Apple is not using their iTunes monopoly to buy chips. They're using their insane amount of phone sales (at absurd profit margins) to buy chips. Again, I hate Apple as much as anyone. Anyone who thinks Apple is a monopoly in phones is a moron. They don't even own 30% of the smartphone market... I agree Apple is anti-competitive within the ecosystem of the iPhone. That's not going to change their ability to buy all of TSMC's chips.
  - dwaite 4y ago
    > They have a monopoly on providing services within iOS. This sounds similar to how Torvalds has a monopoly on services within mainline Linux?
- slt2021 4y ago
  Imagine Microsoft charging 30% of sales for every Windows app developer. Actually, if this were to happen back in the days, we would have everyone on Linux Desktop already...
  - adam_arthur 4y ago
    Not a chance Linux would have won out, even then
- slt2021 4y ago
  mobile phone market. You can poll your friends, colleagues, and relatives - how many people use iPhone vs something else. If % is more than 50%, then apple is monopoly effectively same with mobile tablet market, just make a table of how many ipads vs alternatives.
  - philsnow 4y ago
    > You can poll your friends, colleagues, and relatives It only makes sense to do this on the level of a governing body, because the term 'monopoly' is defined by governing bodies and the remedies against it are enforced by the same. You can cherry-pick / gerrymander any group you want to make it look like Apple has a monopoly by the numbers, but in order to make it stick you'd need to demonstrate that Apple fixes prices (they don't, their phones cost ~2x or more what competitors' phones cost) or that they're somehow excluding other competitors from access to the phone market (they're not).
    - slt2021 4y ago
      the current definition of monopoly is coming from industrial ages, when all goods were perfectly replaceable with each other, like steel, tobacco, or grain or other commodities. From this point of view, prices of goods are similar to each other and using market share (in units sold) is good enough proxy to identify monopolists (identify monopolists using topline approach) However, iPhone is not a commodity, it comes bundled with an OS and plethora of apps and services, the whole ecosystem. per this report ( https://www.imore.com/apple-takes-75-smartphone-profits-despite-13-market-share-says-report https://www.imore.com/apple-takes-75-smartphone-profits-desp... ) it says apple is taking over 75% of profit pool of the market, despite selling only 13% in units. If we identify monopolists using bottom-line approach, then Apple will be a clear monopolist. As would be Facebook and Google. as they should be, if lawmakers truly cared about public good
      - dwaite 4y ago
        > If we identify monopolists using bottom-line approach, then Apple will be a clear monopolist. Per the parent, the challenge is to convince governments to take your proposed approach. Repeating the argument to try to convince a HN crowd is not just non-productive, but counter-productive if it doesn't move toward this goal. Taking away property and/or converting investments into a utility when a business becomes too successful results in a lot of nasty byproducts and most governing bodies will shy away from this. Instead, you likely see the issue completely side-stepped. Nobody truly cares about labelling Apple a monopoly or declaring iOS to be a somehow accepted as a market onto itself - they want a change in behavior. The challenge is how to side-step this when per the letter of the law, they have literally done nothing wrong. For instance, the EU will likely get a lot of pressure due to new regulations being solely against US-headquartered countries for the primary benefit of companies in the EU.
scarface74 4y ago
Most of the successful companies outside of games either don’t allow in app purchases at all and you pay for the subscription outside of the App Store or give users the choice of paying outside of the App Store. And if you look at their revenue breakdown, it’s clear that most of it comes from hardware.