Apple vs Google vs Microsoft

[lbksig]

[quote=“Adam_CLO”]
I think Apple needs to upgrade their PR campaign, as they used to be the cool guys! Maybe becoming bigger than Microsoft is getting to them, as they are no longer the underdogs.[/quote]

They need to do more than upgrade their PR campaign, they need to prepare for WW3. FTC, Justice Department Discuss Possible Inquiry Amid Complaints From Application Developers, Advertising Firms

WASHINGTON—U.S. antitrust enforcers are taking a keen interest in recent changes that Apple Inc. made to its licensing agreement with iPhone application developers and are likely to open a preliminary investigation into whether the company’s actions stifle competition in mobile devices, according to people familiar with the situation.

The Federal Trade Commission and the Justice Department, which are jointly tasked with enforcing federal antitrust laws, are holding discussions over which agency would hold the inquiry, these people said. Apple, the FTC and Justice Department all declined to comment.

[…]

People familiar with the matter said the latest interest from regulators was triggered by complaints from Apple competitors and application developers over the terms of company’s agreement with iPhone and iPad app developers.

Apple recently revised the terms to forbid developers from using software tools other than Apple’s tools to build their programs. It also banned apps from transmitting certain technical iPhone data to third parties.

Here’s the money quote. You know Apple is no longer the rebel when they become the empire.

Some critics contend Apple is now engaging in the kind of tactics that got Microsoft Corp. in trouble with antitrust enforcers in the 1990s. “Apple is playing right out of Microsoft’s playbook—and it’s one they complained about a lot,” said David Balto, a former FTC official now at the Center for American Progress, a left-leaning think tank.

[Adam_CLO]

I don’t see the FTC complaint going anywhere. Last time I checked Apple only had 25% market share in the smart phone industry, which barely increased in the last quarter. Android is coming on strong, Blackberry is healthy and Microsoft will be making a renewed push at the end of the year.

If developers don’t like Apple’s terms and conditions, they can develop for other platforms. Apple hasn’t tied their hands there. If consumers don’t like the quality of apps available, they can also choose a different platform. I don’t see what the problem is here. If anything, Apple is encouraging competition by limiting some of the features on their products (such as Flash), which competing platforms can then take up.

Seems very different from Microsoft’s dominance of the OS industry and subsequent dominance of the browser market by including their browser for free with Windows, or even Intel’s dominance of the processor industry with anti-competitive practices.

[mabagal]

Saw Kevin Lynch, CTO Adobe yesterday give a chat session. He gave a stab at Apple and talked about being able to use any device you want (drawing cheers from the crowd). Then he said Adobe will make the best HTML5 tools out there, implying all they care about is selling the front end toolset, which has always been the case.

This was all good until he said that he believed that Flash could enumerate and extract all the experience nuances of every device, which is wishful thinking IMO.

They had devices you could play with in the expo pit showing Flash running on Android and they probably should not have. It was no way near ready. Performance on both the Droid and N1 was awful enough that a long time flash developer friend called it “fucking horrible”.

[lbksig]

[quote=“Adam_CLO”]I don’t see the FTC complaint going anywhere. Last time I checked Apple only had 25% market share in the smart phone industry, which barely increased in the last quarter. Android is coming on strong, Blackberry is healthy and Microsoft will be making a renewed push at the end of the year.

If developers don’t like Apple’s terms and conditions, they can develop for other platforms. Apple hasn’t tied their hands there. If consumers don’t like the quality of apps available, they can also choose a different platform. I don’t see what the problem is here. If anything, Apple is encouraging competition by limiting some of the features on their products (such as Flash), which competing platforms can then take up.

Seems very different from Microsoft’s dominance of the OS industry and subsequent dominance of the browser market by including their browser for free with Windows, or even Intel’s dominance of the processor industry with anti-competitive practices.[/quote]

You had me up until the “encouraging competition” part by enacting walls. 25% is a decent market share when there are only 5 companies in the market place. True it isn’t RIM’s 42% but they are still part of the oligopoly. Their decision is rent seeking by raising the costs of developing apps by not allowing third party development software. It’s anti-competitive, not competitive behavior to enact barriers to entry. When you take down barriers to entry, you get better competition and lower costs. When you fracture the marketplace, you get oligopolist and monopolist behavior by raising cost of entry.

Their language forbidding apps from transmitting analytical data is textbook coercive monopolistic behavior. Locking out the competition to make advertisers use the iAd system is anti-competitive. That doesn’t mean Apple is a monopoly in all things that they do, but in this scope they are undertaking monopolistic practices which is why the FTC is looking into this.

A coercive monopoly is not merely a sole supplier of a particular kind of good or service (a monopoly), but it is a monopoly where there is no opportunity to compete through means such as price competition, technological or product innovation, or marketing; entry into the field is closed. As a coercive monopoly is securely shielded from possibility of competition, it is able to make pricing and production decisions with the assurance that no competition will arise.

[Adam_CLO]

Being a current developer for the iPhone market, this is the way I see it: Apple has told me what development tools I can use, so I can work out my own costs. If it’s too high for me, I can develop for other (potentially bigger) platforms for lower costs. Nobody is forcing me to develop for the iPhone - that’s my choice. I understand the risks that I could spend a lot of money developing a product that could ultimately be rejected by Apple on grounds I don’t agree with. Many developers don’t like this approach and so have moved on to other platforms as a result. If they were the ONLY game in town, then I could see the problem, but they are not.

Regarding iAds, I believe they will be introducing them to COMPETE with Admob and other ad systems out there. The developer can choose which ad system he wants to use. I would agree that if iAd was the ONLY option, then there would be a problem, but my understanding is that it is an additional option, that’s all.

A coercive monopoly is not merely a sole supplier of a particular kind of good or service (a monopoly), but it is a monopoly where there is no opportunity to compete through means such as price competition, technological or product innovation, or marketing; entry into the field is closed. As a coercive monopoly is securely shielded from possibility of competition, it is able to make pricing and production decisions with the assurance that no competition will arise.

I think the difference is that the barriers Apple have erected are INSIDE their own ecosystem. If the barriers were designed so that a user was encouraged NOT to develop for other platforms, then there would be a problem. But here’s it’s almost the opposite. They are making it more expensive for a developer to develop for the iPhone by being specific on what tools can be used. That’s why I find it to be more encouraging competition than discouraging it.

If developers want to use Flash, there are other platforms that support it. High profile developers have left in disgust to work for other platforms. Android has been wooing these same developers with their more open approach. We’ve seen innovations from Apple influence Android and vice versa, so I see it as a healthy battle between both sides, and upcoming competitors like Microsoft, RIM, Nokia etc.

[lbksig]

[quote=“Adam_CLO”]Being a current developer for the iPhone market, this is the way I see it: Apple has told me what development tools I can use, so I can work out my own costs. If it’s too high for me, I can develop for other (potentially bigger) platforms for lower costs. Nobody is forcing me to develop for the iPhone - that’s my choice. I understand the risks that I could spend a lot of money developing a product that could ultimately be rejected by Apple on grounds I don’t agree with. Many developers don’t like this approach and so have moved on to other platforms as a result. If they were the ONLY game in town, then I could see the problem, but they are not.
[/quote]

Here’s the only problem with the paragraph. In a competitive market, costs are driven by market forces. If the development tools that Apple sells is expensive, someone else will come write their own and sell it for less. That process is repeated until you get to an equilibrium where it’s not worth a developers time to make new tools. If the equilibrium price is too high in a competitive market, you don’t develop for that platform. If you want a premium product with the best features, you pay more. That’s not what Apple is doing. They are excluding any other development tools except their own so they are, in fact, the only game in town for 25% of the market. That’s anti-competitive behavior. It’s a coerced choice because you’re being locked out unless you use their tools, at a higher cost that you’d pay for others.

@Adam_CLO

Regarding iAds, I believe they will be introducing them to COMPETE with Admob and other ad systems out there. The developer can choose which ad system he wants to use. I would agree that if iAd was the ONLY option, then there would be a problem, but my understanding is that it is an additional option, that’s all.

If iAds is their own system introduced to compete with the other ad systems, and they don’t give it preference, then compete like hell and let the best product win. End of story. That isn’t the case if the EULA says you can’t transmit analytical data to a third party. That gives iAds an unfair advantage over the competition by excluding them, which is something you can’t do unless you like anti-trust suits being filed against you by the DOJ. I’m sure Apple’s stockholders wouldn’t like that. You can’t exclude the competition and you can’t give your own tools preference over the competition.

[quote=“Adam_CLO”]
I think the difference is that the barriers Apple have erected are INSIDE their own ecosystem. If the barriers were designed so that a user was encouraged NOT to develop for other platforms, then there would be a problem. But here’s it’s almost the opposite. They are making it more expensive for a developer to develop for the iPhone by being specific on what tools can be used. That’s why I find it to be more encouraging competition than discouraging it.

If developers want to use Flash, there are other platforms that support it. High profile developers have left in disgust to work for other platforms. Android has been wooing these same developers with their more open approach. We’ve seen innovations from Apple influence Android and vice versa, so I see it as a healthy battle between both sides, and upcoming competitors like Microsoft, RIM, Nokia etc.[/quote]

Apple would have a better case if it was non-compete clauses for their developers. The developers may not like that, and would scream bloody murder, but that could stand up in court. You can erect barriers inside your own ecosystem, minimum standards, that keep people from developing as long as they apply equally to everyone. You can’t do that if your company stands to directly benefit because you have a competing product. That’s a deliberate action to reduce competition for your product. Apple not allowing apps that compete with their own product is anti-competitive behavior.

Raising the cost of developing doesn’t encourage competition, it reduces it. It may eliminate some of the crap applications by raising the cost to develop them, thereby improving the overall quality of apps, and that’s fine. Apple can set standards that apply equally to everyone. It’s their platform. It doesn’t encourage competition though.