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People tend to conveniently forget that it's the consumers in an economy who define a monopoly. There's nothing inherently wrong with it. If a monopoly occurs b

People tend to conveniently forget that it's the consumers in an economy who define a monopoly. There's nothing inherently wrong with it. If a monopoly occurs because the majority of consumers are giving that product/service their money, then it must be deserving of it. If enough people are dissatisfied with the quality, they'll turn to new business, and the monopoly will cease to exist. The market has and will continue to regulate itself without legislative interference. I see no reason for the government to get involved with Apple's private marketplace. Edit: I'll put it this way: You don't like Apple's closed market because they can define arbitrary rules that makes it hard to compete. How is that any different than a Government defining arbitrary rules on the national marketplace?

cooldeal 14y ago
> If enough people are dissatisfied with the quality, they'll turn to new business, and the monopoly will cease to exist. Wish it were so simple, but the problem is the ecosystem. A new business will not start out with 500K apps and developers won't develop apps till a platform has a lot of users, a chicken-and-egg problem. Users don't like buying devices with only a few apps available. Looks at WebOS, it was a good platform but died. This is not even mentioning the real costs of switching, like not having access to already purchased apps and content because they're locked down(music, movie, ebook purchases). It was a big problem with Windows in the 90s, you had to get a Windows computer to run software needed to be compatible with others.
- jwallaceparker 14y ago
  > Wish it were so simple The process takes time, but it is that simple. Granted, it would take an enormous effort to start a new company that competes against Apple, but one could do it. But just because it takes an enormous effort that doesn't nullify the fact that consumers would indeed turn to other products if Apple products failed to satisfy. I think a big issue to consider is that people are very satisfied with the quality of Apple's products at this point. If somehow the government decided that people could only buy Apple products, then we'd have monopoly, and then we should be angry. But they haven't. So we should relax.
  - astrodust 14y ago
    Apple is in a very strong position, they have an amazing product that people will literally line up to buy. What they don't have is a lock on the market, though, and they know it. They either innovate, keep pushing themselves, or they'll end up steamrollered by someone else. Remember that in 1995 people did line up to buy Windows 95 and while future launches weren't met with as much fanfare, people would actively seek out computers with Windows on it and had no time for side-show attractions like MacOS or Linux. Amazing how that can come collapsing down just because of a few mis-steps. You have Vista, you have a near decade of focusing aggressively on the server market and leaving the consumer side to twist in the wind, neglecting their important and dominant Internet Explorer product for the better part of six years. In other words, Apple is just one Steve Ballmer away from total irrelevance. The company best situated to take down Apple doesn't exist yet, not in the form it will ultimately be. Maybe Samsung will finally go beyond emulating and will build their own platform that resonates with consumers as well as they'd have you believe in the marketing... Maybe Microsoft will hire new leadership and straighten out the train-wreck that Windows Phone 7 is... As much as Apple is doing a great job, it's frustrating when there really isn't any competition. We need a market where there are two or three very good choices. Like Xbox 360 or PS3 or Wii where each have their merits. What will the world be like if that's reduced to just one?
- nraynaud 14y ago
  Wait, when Apple started the iPhone they had no 3rd party application, people begged them to allow that. They got to that number from zero. They are not preventing anyone to create a phone so compelling that everybody is asking for a SDK. moreover hundreds of mobile allowed 3rd party apps before the iPhone was there(I remember those cheesy java apps). They sold a very expensive phone that had less feature than the others and everybody wanted one. I don't know exactly what more proof we can get than the market is free than that. It was more expensive and had less feature than the other. The only extra stuff was Steve Jobs, sorry but the marked for that was destroyed a few month ago.
  - MBCook 14y ago
    Remember, when Apple started, the market basically didn't exist. Not many people had smartphones. The programs available for, say, Windows CE, had costs of $10-$20 at the low end. Feature phones had games, but they were often $5+. On a feature phone, if you replaced it with a new model you may have lost whatever you purchased. I distinctly remember one of my Sprint feature phones having a version of Tetris (or some similar complexity of game) for $3 a month. It was the rise of Apple's mobile app store that made apps an important factor in which phone to buy. Before the iPhone app store, what percent of users in the US spent $10 a year to buy phone apps? What percent do now? Ignoring the fact I love my iPhone, I would be hesitant to go to another plstform because of all the games I'd have to either give up or re-buy.
    - astrodust 14y ago
      It's hard to remember that when Apple started the RIM BlackBerry was the undisputed Ph.D. of the smartphone market compared to the relatively high-school smart challengers of Danger and Palm. Palm had an app store first and it was amazing for its time. It's an interesting case study to deconstruct how they could botch such an amazing product so thoroughly. They even missed the tablet bandwagon completely.
- jopt 14y ago
  Those are just reasons Apple is more attractive to consumers than the competition is. Nobody said competing has to be easy, or even possible for everyone. Free competition is not a guarantee that anyone will be able to outperform incumbents; it only means that if you do (as defined by consumers) you won't be held back by regulations/legal monopolies.
wslh 14y ago
> People tend to conveniently forget that it's the consumers in an economy who define a monopoly. There's nothing inherently wrong with it. Yes there are issues with monopolies. This is why new laws must be created to protect against these monopolies.
- FuzzyDunlop 14y ago
  I'd also say that the GP's statement isn't wholly true. Inorganic growth is a different road to monopoly power. Vertical integration, another. As is abuse of existing monopoly power to gain a monopoly in a different market (see Internet Explorer). The consumer isn't accountable for the actions of a monopoly. The main problem is that the monopoly becomes less accountable as a whole. Hence legislation and regulation.
lukifer 14y ago
> If a monopoly occurs because the majority of consumers are giving that product/service their money, then it must be deserving of it. "Deserving" is subjective, and that attitude doesn't seem far from "might makes right". Beta was better than VHS (or so I hear), but the consumers went where the content was, and the better format lost. > I see no reason for the government to get involved with Apple's private marketplace. Except it already is involved: the government issues currency and defends copyrights and patents, all backed by (heavily abstracted) violence. In fact, remove the threat of prosecuting NDAs alone, and I guarantee that Apple as we know it would collapse within a year. > How is that any different than a Government defining arbitrary rules on the national marketplace? In theory, the rules are not arbitrary, but driven by democratic processes. In practice, such rules might as well be arbitrary, if not openly hostile, and I will stipulate this as unfixable (for now). But we already have marketplace rules all over the place, whether by law or by convention: don't false advertise, don't market poison as candy, etc. I don't see why "you're not allowed to encrypt everything so you're the only game in town" can't be one of them. Moreover, I don't see a difference between a tyrannical Apple and a tyrannical government, except in details and scale, and I'm not willing to settle for either. For the record: I am typing this on a MacBook Pro. I think curtailing Apple's monopolistic tendencies would be not only be good for users and the ecosystem, but in the long run, good for Apple itself. For instance: if users are allowed to side-load any old app, they can curate their App Store to their heart's content, including only the best of the best, and regular users would be more satisfied their experience as a result.
- mgkimsal 14y ago
  they might be more satisfied, but use it less, and provide less revenue. "highly satisfied" users of a system that is optional to use will most likely provide less revenue than a system people are forced to use, but provides less overall satisfaction to the users.
efsavage 14y ago
You're right in that there's nothing inherently wrong with a monopoly. There's only things wrong with how you got it, and more importantly, how you use it. When you use collusion to build one (or a cartel), that's a problem. When you start using it to preclude people from turning to an alternative, that's a problem. Right now Apple is the dominant player in the mobile phone space, but it's definitely not a monopoly, and AFAICT they aren't really doing anything that is preventing competitors from entering the market. iCloud is a step in that direction, but it's not very good right now so we'll have to wait and see. Android basically lets Apple do whatever they want, and is the credible competitor that Microsoft was lacking. Where Apple was a monopoly was in mp3 players, and where they were abusing it was with their DRM, by also having the dominant music store, and not allowing other devices to get music from it, or to let other stores sell DRM music for the iPod. They removed it, and I don't think it had anything to do with consumers, it was simply an anti-trust target that was growing larger by the day. They were smart and fixed that.
- Steko 14y ago
  "Where Apple was a monopoly was in mp3 players, and where they were abusing it was with their DRM.... They removed it, and I don't think it had anything to do with consumers, it was simply an anti-trust target that was growing larger by the day." You seem to have gotten the history wrong. DRM on itunes was mandated by the music companies. After a very public push from Steve Jobs, the music companies tested DRM free with Amazon and after that they gave Apple the green light.
  - efsavage 14y ago
    DRM may have been mandated, but Apple's refusal to license FairPlay to other manufacturers, and refusal to allow the iPod to support any other DRM, was not. Jobs' spinning this into a victory for the little guy rather than an anti-trust dodge is just another example of his PR prowess.
    - X-Istence 14y ago
      I don't see why I should be required to license my IP to anyone, let alone companies that may compete with me. I also don't see how a product I design would need to support a format that is licensed by a competitor and is something I'd have to pay money for. You want content for your iPod, you can purchase it from iTunes, which will be DRM'ed according to the music industry, or you can purchase your music on a CD and rip it to MP3 and transfer it to your iPod that way. There is no rule that any company should be required to license their IP, nor is there a rule that a company should be required to purchase a license to someone else's IP.
chris_wot 14y ago
I must disagree. Except in a few cases, monopolies cause problems with deincentivization of innovation, uncompetitive behaviour, poorer outcomes for consumers and often higher prices than there would be otherwise were there a competitor. Apple are beginning to show all these signs. I would suggest that given enough instances of incidents like these that the US DOJ would be within their rights to start another anti-trust case.
- jwallaceparker 14y ago
  > Except in a few cases, monopolies cause problems with deincentivization of innovation, uncompetitive behaviour, poorer outcomes for consumers and often higher prices than there would be otherwise were there a competitor. I think you'll only find this is the case with government-granted monopoly. Government-granted monopolies (US post office, some energy utilities, many transportation companies and so on) have little incentive to innovate and generally deliver poor service to consumers. But how can you argue this about Apple? They're incredible innovators, they deliver great products that consumers love and the prices of those products generally fall over time.
  - beagle3 14y ago
    > I think you'll only find this is the case with government-granted monopoly. That's demonstrably wrong; e.g., once Microsoft had a monopoly on the browser market (somewhere around IE5-IE6), they stopped innovating, whereas before that point (IE2-IE5) they made great efforts to innovate. > But how can you argue this about Apple? They're incredible innovators, they deliver great products that consumers love and the prices of those products generally fall over time. That's true. Despite what many people in this thread feel, Apple does not have a monopoly in any market: Macs are ~15% of all PCs. iphones aren't event 30% of the phone smartphone market. What Apple did manage to do is dominate the lucrative parts of most markets -- but that doesn't make them a monopoly more than it makes Louis Vutton a monopoly on lucrative handbags.
  - emptyaccount 14y ago
    Its important to note that many government granted monopolies are created to provide important services to all areas, not just those that are profitable. For example, USPS delivers mail to all addresses. Competitors use USPS to deliver to remote locations. They have their problems of course, but they also have their share of burdens competitors don't.
no_more_death 14y ago
Yes, you can choose from multiple options. Android, Meego, Boot2Gecko (soon). Windows Mobile, Blackberry, iOS, Bada, etc. So: some people choose Apple for its advantages, and others choose Android for its advantages. As a matter of fact, openness was the whole purpose of Android, way back when the G1 was released. Android is an incredible success story for open source cooperating with commercial interests and gaining huge public mind share.
gizzlon 14y ago
> If a monopoly occurs because the majority of consumers are giving that product/service their money, then it must be deserving of it. Why exactly? The argument works if you make it circular (they deserve it because they get it), but so what? It's not like consumers always do whats best for them, especially in the long run. Even if if the consumer did what was best for him or herself, that might not be what's best for everyone. Honestly, I don't get where this seemingly naive faith, that everything will just take care of it self, comes from. Personally I can't see any evidence of that.

cooldeal 14y ago

> If enough people are dissatisfied with the quality, they'll turn to new business, and the monopoly will cease to exist. Wish it were so simple, but the problem is the ecosystem. A new business will not start out with 500K apps and developers won't develop apps till a platform has a lot of users, a chicken-and-egg problem. Users don't like buying devices with only a few apps available. Looks at WebOS, it was a good platform but died. This is not even mentioning the real costs of switching, like not having access to already purchased apps and content because they're locked down(music, movie, ebook purchases). It was a big problem with Windows in the 90s, you had to get a Windows computer to run software needed to be compatible with others.

jwallaceparker 14y ago
> Wish it were so simple The process takes time, but it is that simple. Granted, it would take an enormous effort to start a new company that competes against Apple, but one could do it. But just because it takes an enormous effort that doesn't nullify the fact that consumers would indeed turn to other products if Apple products failed to satisfy. I think a big issue to consider is that people are very satisfied with the quality of Apple's products at this point. If somehow the government decided that people could only buy Apple products, then we'd have monopoly, and then we should be angry. But they haven't. So we should relax.
- astrodust 14y ago
  Apple is in a very strong position, they have an amazing product that people will literally line up to buy. What they don't have is a lock on the market, though, and they know it. They either innovate, keep pushing themselves, or they'll end up steamrollered by someone else. Remember that in 1995 people did line up to buy Windows 95 and while future launches weren't met with as much fanfare, people would actively seek out computers with Windows on it and had no time for side-show attractions like MacOS or Linux. Amazing how that can come collapsing down just because of a few mis-steps. You have Vista, you have a near decade of focusing aggressively on the server market and leaving the consumer side to twist in the wind, neglecting their important and dominant Internet Explorer product for the better part of six years. In other words, Apple is just one Steve Ballmer away from total irrelevance. The company best situated to take down Apple doesn't exist yet, not in the form it will ultimately be. Maybe Samsung will finally go beyond emulating and will build their own platform that resonates with consumers as well as they'd have you believe in the marketing... Maybe Microsoft will hire new leadership and straighten out the train-wreck that Windows Phone 7 is... As much as Apple is doing a great job, it's frustrating when there really isn't any competition. We need a market where there are two or three very good choices. Like Xbox 360 or PS3 or Wii where each have their merits. What will the world be like if that's reduced to just one?
nraynaud 14y ago
Wait, when Apple started the iPhone they had no 3rd party application, people begged them to allow that. They got to that number from zero. They are not preventing anyone to create a phone so compelling that everybody is asking for a SDK. moreover hundreds of mobile allowed 3rd party apps before the iPhone was there(I remember those cheesy java apps). They sold a very expensive phone that had less feature than the others and everybody wanted one. I don't know exactly what more proof we can get than the market is free than that. It was more expensive and had less feature than the other. The only extra stuff was Steve Jobs, sorry but the marked for that was destroyed a few month ago.
- MBCook 14y ago
  Remember, when Apple started, the market basically didn't exist. Not many people had smartphones. The programs available for, say, Windows CE, had costs of $10-$20 at the low end. Feature phones had games, but they were often $5+. On a feature phone, if you replaced it with a new model you may have lost whatever you purchased. I distinctly remember one of my Sprint feature phones having a version of Tetris (or some similar complexity of game) for $3 a month. It was the rise of Apple's mobile app store that made apps an important factor in which phone to buy. Before the iPhone app store, what percent of users in the US spent $10 a year to buy phone apps? What percent do now? Ignoring the fact I love my iPhone, I would be hesitant to go to another plstform because of all the games I'd have to either give up or re-buy.
  - astrodust 14y ago
    It's hard to remember that when Apple started the RIM BlackBerry was the undisputed Ph.D. of the smartphone market compared to the relatively high-school smart challengers of Danger and Palm. Palm had an app store first and it was amazing for its time. It's an interesting case study to deconstruct how they could botch such an amazing product so thoroughly. They even missed the tablet bandwagon completely.
jopt 14y ago
Those are just reasons Apple is more attractive to consumers than the competition is. Nobody said competing has to be easy, or even possible for everyone. Free competition is not a guarantee that anyone will be able to outperform incumbents; it only means that if you do (as defined by consumers) you won't be held back by regulations/legal monopolies.

wslh 14y ago

> People tend to conveniently forget that it's the consumers in an economy who define a monopoly. There's nothing inherently wrong with it. Yes there are issues with monopolies. This is why new laws must be created to protect against these monopolies.

FuzzyDunlop 14y ago
I'd also say that the GP's statement isn't wholly true. Inorganic growth is a different road to monopoly power. Vertical integration, another. As is abuse of existing monopoly power to gain a monopoly in a different market (see Internet Explorer). The consumer isn't accountable for the actions of a monopoly. The main problem is that the monopoly becomes less accountable as a whole. Hence legislation and regulation.

lukifer 14y ago

> If a monopoly occurs because the majority of consumers are giving that product/service their money, then it must be deserving of it. "Deserving" is subjective, and that attitude doesn't seem far from "might makes right". Beta was better than VHS (or so I hear), but the consumers went where the content was, and the better format lost. > I see no reason for the government to get involved with Apple's private marketplace. Except it already is involved: the government issues currency and defends copyrights and patents, all backed by (heavily abstracted) violence. In fact, remove the threat of prosecuting NDAs alone, and I guarantee that Apple as we know it would collapse within a year. > How is that any different than a Government defining arbitrary rules on the national marketplace? In theory, the rules are not arbitrary, but driven by democratic processes. In practice, such rules might as well be arbitrary, if not openly hostile, and I will stipulate this as unfixable (for now). But we already have marketplace rules all over the place, whether by law or by convention: don't false advertise, don't market poison as candy, etc. I don't see why "you're not allowed to encrypt everything so you're the only game in town" can't be one of them. Moreover, I don't see a difference between a tyrannical Apple and a tyrannical government, except in details and scale, and I'm not willing to settle for either. For the record: I am typing this on a MacBook Pro. I think curtailing Apple's monopolistic tendencies would be not only be good for users and the ecosystem, but in the long run, good for Apple itself. For instance: if users are allowed to side-load any old app, they can curate their App Store to their heart's content, including only the best of the best, and regular users would be more satisfied their experience as a result.

mgkimsal 14y ago
they might be more satisfied, but use it less, and provide less revenue. "highly satisfied" users of a system that is optional to use will most likely provide less revenue than a system people are forced to use, but provides less overall satisfaction to the users.

efsavage 14y ago

You're right in that there's nothing inherently wrong with a monopoly. There's only things wrong with how you got it, and more importantly, how you use it. When you use collusion to build one (or a cartel), that's a problem. When you start using it to preclude people from turning to an alternative, that's a problem. Right now Apple is the dominant player in the mobile phone space, but it's definitely not a monopoly, and AFAICT they aren't really doing anything that is preventing competitors from entering the market. iCloud is a step in that direction, but it's not very good right now so we'll have to wait and see. Android basically lets Apple do whatever they want, and is the credible competitor that Microsoft was lacking. Where Apple was a monopoly was in mp3 players, and where they were abusing it was with their DRM, by also having the dominant music store, and not allowing other devices to get music from it, or to let other stores sell DRM music for the iPod. They removed it, and I don't think it had anything to do with consumers, it was simply an anti-trust target that was growing larger by the day. They were smart and fixed that.

Steko 14y ago
"Where Apple was a monopoly was in mp3 players, and where they were abusing it was with their DRM.... They removed it, and I don't think it had anything to do with consumers, it was simply an anti-trust target that was growing larger by the day." You seem to have gotten the history wrong. DRM on itunes was mandated by the music companies. After a very public push from Steve Jobs, the music companies tested DRM free with Amazon and after that they gave Apple the green light.
- efsavage 14y ago
  DRM may have been mandated, but Apple's refusal to license FairPlay to other manufacturers, and refusal to allow the iPod to support any other DRM, was not. Jobs' spinning this into a victory for the little guy rather than an anti-trust dodge is just another example of his PR prowess.
  - X-Istence 14y ago
    I don't see why I should be required to license my IP to anyone, let alone companies that may compete with me. I also don't see how a product I design would need to support a format that is licensed by a competitor and is something I'd have to pay money for. You want content for your iPod, you can purchase it from iTunes, which will be DRM'ed according to the music industry, or you can purchase your music on a CD and rip it to MP3 and transfer it to your iPod that way. There is no rule that any company should be required to license their IP, nor is there a rule that a company should be required to purchase a license to someone else's IP.

chris_wot 14y ago

I must disagree. Except in a few cases, monopolies cause problems with deincentivization of innovation, uncompetitive behaviour, poorer outcomes for consumers and often higher prices than there would be otherwise were there a competitor. Apple are beginning to show all these signs. I would suggest that given enough instances of incidents like these that the US DOJ would be within their rights to start another anti-trust case.

jwallaceparker 14y ago
> Except in a few cases, monopolies cause problems with deincentivization of innovation, uncompetitive behaviour, poorer outcomes for consumers and often higher prices than there would be otherwise were there a competitor. I think you'll only find this is the case with government-granted monopoly. Government-granted monopolies (US post office, some energy utilities, many transportation companies and so on) have little incentive to innovate and generally deliver poor service to consumers. But how can you argue this about Apple? They're incredible innovators, they deliver great products that consumers love and the prices of those products generally fall over time.
- beagle3 14y ago
  > I think you'll only find this is the case with government-granted monopoly. That's demonstrably wrong; e.g., once Microsoft had a monopoly on the browser market (somewhere around IE5-IE6), they stopped innovating, whereas before that point (IE2-IE5) they made great efforts to innovate. > But how can you argue this about Apple? They're incredible innovators, they deliver great products that consumers love and the prices of those products generally fall over time. That's true. Despite what many people in this thread feel, Apple does not have a monopoly in any market: Macs are ~15% of all PCs. iphones aren't event 30% of the phone smartphone market. What Apple did manage to do is dominate the lucrative parts of most markets -- but that doesn't make them a monopoly more than it makes Louis Vutton a monopoly on lucrative handbags.
- emptyaccount 14y ago
  Its important to note that many government granted monopolies are created to provide important services to all areas, not just those that are profitable. For example, USPS delivers mail to all addresses. Competitors use USPS to deliver to remote locations. They have their problems of course, but they also have their share of burdens competitors don't.

no_more_death 14y ago

Yes, you can choose from multiple options. Android, Meego, Boot2Gecko (soon). Windows Mobile, Blackberry, iOS, Bada, etc. So: some people choose Apple for its advantages, and others choose Android for its advantages. As a matter of fact, openness was the whole purpose of Android, way back when the G1 was released. Android is an incredible success story for open source cooperating with commercial interests and gaining huge public mind share.

gizzlon 14y ago

> If a monopoly occurs because the majority of consumers are giving that product/service their money, then it must be deserving of it. Why exactly? The argument works if you make it circular (they deserve it because they get it), but so what? It's not like consumers always do whats best for them, especially in the long run. Even if if the consumer did what was best for him or herself, that might not be what's best for everyone. Honestly, I don't get where this seemingly naive faith, that everything will just take care of it self, comes from. Personally I can't see any evidence of that.