I am not an Apple apologist - I hope - but still I would like to begin my comment by claiming that Jobs and Gates might be monopolists both, but of different kinds. Gates wanted a monopoly because he wanted to crush the competition just because. Letʼs say it was his instinct. That is what motivated him, at least in his early days. To be number One, at whatever cost.
What motivates the monopolist in Jobs is probably his need to be in control of whatever he produces. Perhaps we could say that it is an artistic approach? You have a vision and you certainly do not want it to be distorted by others, if you are an artist. If what you creates is of huge proportions, you will need assistance, but you are the one with the vision so you still want full control of the end result.

Now, this works well when it comes to art and to some extent, it works well in other areas, too. But it can obviously become a double edged sword. When and if Apple actually reaches the position of a monopoly, such as is the case with the iPod/iTunes package, it is high time to step back. So far, it is probably a benevolent monopoly. giving developers freedom - but that freedom is already limited, like we have seen with the NDAs which prevents them from sharing their experiences with each other.

iPods and iTunes are just for entertainment, but what if Apple would reach the same status when it comes to computers? That would simply be horrible. It would be a kind of Frankensteinʼs monster, who would not turn upon us because we rejected it, but because we spoilt it.

It should be easy to see how devastating that would be for innovation - much, much worse than Microsoftʼs stranglehold has been.

I have felt like I have been supporting Apple most of all to see the monopoly fall. If it would be replaced by another, like Apple, I guess it would be time to go Linux.

I also think that at one point Apple must open up. Who knows; the OS could be licensed, no matter how much the full control of the whole package has served them well. If they grow too big and dominant, however, that full control will not serve us well, the end users. Where the line goes, I am not sure, though, but that it exists, of that I am sure.

A Mac user since '87, I've never bought any music from iTMS because I don't like DRM -- I want to move it around among devices, make CD's for my wife's car, etc. I rarely buy CDs or DVDs any more because I don't like DRM. I can't watch some things on the net because I'm in the "wrong" country. I haven't bought an iPhone because I don't like being told where, with whom, and how I must use it.

An Apple monopoly wouldn't be such a bad thing unless they became complacent, once with a "Fat, dumb and happy" Apple was enough

I think the author's comments are a bit of a stretch.

73 percent of the market is a questionable comment if that translates into a monopoly. Dominating? Yes. If they had 90% of the market that might start to raise eyebrows.

Just because they are the number one music vendor doesn't make them a monopoly.

The comment about displays and MacPros is questionable. Where is the data to back up that a Cinema Display is purchased right along with it.

Plus it isn't against the law to be a monopoly, it's only against the law to use that position to hinder competition. Can you say grey area?... sure it is.

I think every company wants to be a monopoly, not just Apple and Microsoft. So personally calling out Bill and Steve is a bit weak, but it probably makes for a good story.

I'm not so sure that the "all monopolies are evil" approach is that realistic or useful. In many ways, a natural monopoly makes sense because it is more efficient. For example, utility companies are typically regulated monopolies. Forcing "competition" where it isn't natural is counter-productive.

In the case of Apple, there is nothing that would prevent HP, IBM, or Sony from developing their own OS, or even using some BSD or Linux variant. It's just that these hardware companies made decisions years ago to pay Microsoft for Windows rather than spend R&D money on OS development. They are now reaping the rewards of those decisions.

The problem with the anti-monopoly position is one of enforcement. In most cases, the cure is worse than the disease. How do you do it correctly? When Microsoft was convicted in 1995 there wasn't anything that stopped them or broke their hold on the PC makers. When Microsoft was convicted in 2000, again, nothing there really broke their hold on the browser.

Whenever government steps in to control a market, or a specific player within a market, you end up growing the government. You need court time, oversight agencies, etc. A lot of effort is wasted on lawyers and courts trying to enforce the anti-monopoly policies.

Look at the browser market now. We have Omniweb, iCab, Opera, Safari, Firefox, Chrome. Some are free, some are paid, others are advertiser-supported. Did anything in the 2000 anti-trust decrees against Microsoft produce these products? No, just market forces at work.

The same thing is true with Windows. Microsoft has had monopoly status on OS's since 1995, but nothing in that "agreement" is what is contributing to Apple's success now. Microsoft has become incompetent, and market forces are turning this around.

Your article makes it sound like Apple's monopolistic ways are something new which isn't remotely the case.

From day one Apple has kept control on their products, both hardware and software, as you mentioned in the article. I believe that's why they work as well as they do. The iPhone and iPod are simply more Apple products that follow this same paradigm. When the first generation iPod hit the market years ago, no one was bitching about a monopoly then, but NOTHING has changed in Apples handling of this product. It's been a locked down system from the beginning.

Here is the striking difference between Apple and some other monopolies. Others have produced a product, that through a multitude of reasons come to dominate a market. The manufacturer then capitalizes on this by locking things into their other products and making it difficult for the consumer to break free without great expense. Apple has NOT done this. They came out with a locked product from day one, with a very small market share. They started selling music through the store using a format (AAC) that was going against the primary standard of every other player out there (mp3, and later windows media). They didn't lock the consumer in. The consumer, knowing full well that Apple's system is different and incompatible with others, and ALREADY LOCKED DOWN, chose to join. That's about as free market as you can get.

OS X machines cannot play the graphic intensive games like Windows and no developer worth his pay packet is gonna waste time trying to port them. The hardware is too restrictive and serious gamers spend serious money on latest motherboards, video & sound cards. The games market is massive and Apple are light years behind.

To Mr. Landau and others who object to the prospect of Apple's monopoly power in certain markets, I present the opposition that Apple is acquiring and maintaining its growing market share by licit means that benefit us all. Monopolies, under U.S. law, are neither per se illegal or bad, provided that they are obtained and maintained by winning the competition in the market based on the merits of one's products or services or are based on either copyright or patent, which confer the legal right to create a monopoly in the copyrighted work or patented invention.

Apple's recent successes in the markets for computers, media players, and smartphones and its attempts to dominate those markets are either based on the superiority of its products or because it asserts its rights pursuant to copyright or patent to prevent others from exploiting its intellectual property, both of those reasons are legal and beneficial to society, as well as benefiting Apple. In both cases, Apple is succeeding in the market on the merits without interfering with any competitor's ability to compete. Thus, Apple is winning customers because customers prefer its products, services, and/or the innovation of its intellectual property (IP). But making the best products and/or the best innovations and winning the competition in the market because of those superior product or service is exactly what we want companies to do, because that is how society and, particularly, consumers benefit from competition: We all get better products and services.

Illegal monopolies or illicit attempts to monopolize occur where a company, as was the case with Microsoft, obtains and/or maintains its monopoly not on the merits of its products but by illicitly hindering competition itself, that is, by illicitly restricting a competitor's ability to compete. But Apple has not done that. Apple wins because it is making better products or services or because it is asserting its rights under IP law to exclusively exploit its creations. Competitors fully have the ability to compete. They are simply losing the competition. Well, that is good for all of us that one company, in this case Apple, provides us with better products and/or services that we prefer.

Is Mr. Landau suggesting that we tell Apple that shouldn't be allowed win the competition by even licit means? That certainly would harm Apple, but it would also harm us. If Apple or any other company were told that it could not win the competition by either making better product or services and/or by exclusively exploiting its IP, why would that company even bother to compete? It wouldn't compete. And if companies don't compete, we will never get better products and services and never progress in innovation.

Apple's success is to be lauded and enjoyed, because it benefits not only Apple, its employees, and its shareholders but also all of us. It is exceedingly rare for a company to licitly win the competition to the extent of dominating any market, and when one does, it rarely does so for long. Apple's competitors fully have the ability to compete. They have the ability to make better products and services to compete with Apple. They have the ability to create their own innovative IP to compete with Apple's IP. However, at this moment, they have simply failed to effectively exercise those abilities to compete with Apple. Both our law and morality of fair competition limit their sanctions to those persons and/or companies that interfere with the ability to compete so that we can enjoy the fruits of vigorous competition, rather than suffer Soviet-style command economies that so utterly failed that no country, except the poor and starving North Korea, still attempt government command of the economy. As long as Apple competes by making better products and exploiting its own innovations and not by hindering the ability to compete, any success or even dominance in the market that it achieves contributes to the best that competitive markets can produce in goods, services, and innovation. That's a good and legal thing.

Let's define "Freedom" and "Anarchy"

Freedom: the power or right to act, speak, or think as one wants without hindrance or restraint

Anarchy: a state of disorder due to absence or nonrecognition of authority

Apple innovates and prides itself in creating a "high quality experience." Apple cannot deliver a "high quality experience," that is, the experience they determine to be of high-quality, without creating boundaries to govern their intellectual properties. Some people are simply anarchists, meaning they despise authority, or really they intend to rebel against any authority that keeps them from doing what they want to do. Often what people want to do is not best for themselves or others. Carrying a principle of choice forward, thinking through the consequences, and determining hypothetical outcomes is not a strength commonly recognized. That involves learning, seeking counsel from others, being patient, delaying gratification, and thinking for oneself.. It also means being honest enough with oneself to say, "I guess that's not a good idea."

I think it's safe to argue many boundaries are important, why do people drive on the correct side of the road? Why are there property rights? Why do banks have rigid controls? Why is it wrong to kill? These things serve to protect us and our rights.

Apple doesn't badger people into buying their devices. They innovate. They market. They sell. They make money. Then they innovate more. In this process they determine how to protect their intellectual property within the boundaries of our laws. They also have to determine how to protect the experience they've set out to create, which is the purpose for their EULA, patents, copyrights, etc...

Apples isn't trying to please everyone, they shouldn't.. that's poor business. They focus on creating a quality experience via good software and hardware, and I would argue they're effective.

If Apple did not seek to protect their innovation there would be no quality Apple products. Those who are angered Apple manages the experience the way they do don't have to buy Apple products. If such people want to debate about a lack of Freedom they should at least consider the freedom they request would destroy the company and innovation they enjoy. This principle applies not only to Apple but to all products and innovation.

Blessings,
Heath

"Imagine if Apple (or even worse, if Microsoft) tried to place similar restrictions on obtaining software for their computers. There would be roars of "censorship" (and that would be the kindest word used). Yet, surprisingly, these same limits for the iPhone draw very few complaints. Instead, Mac users appear overjoyed that Apple has allowed them to have any third-party iPhone software at all"

But Apple makes the iPhone and has the right to design its software etc as it sees fit. If you want to hack it or jail break it, they can't really stop you, but they are under no obligation to enable anything.

Of course there's a good reason to enable it, but there's also a good reason to attempt to control it.

The market can decide if that control is too much.

But this kind of control has done nothing to Nintendo's business. You don't see Wii shareware or X-Box 360 software being sold without it first being approved by the hardware maker.

I definitely agree with Nemo. We have to get away from the idea that any company that becomes successful immediately needs restraint.

AT&T was doing a great job until they got hacked into pieces and the consumer got screwed.

As long as Apple doesn't become a bully, we're all in peaceful harmony.

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Guest wrote:
A Mac user since '87, I've never bought any music from iTMS because I don't like DRM -- I want to move it around among devices, make CD's for my wife's car, etc.

No problem with Fairplay DRM. BTW, there's now a fairly large number of DRM-free tracks available on the iTS.

It's weird, isn't it? The music cartel thought they'd:
- fight Apple (the very company that saved them from piracy)...
- by favoring other outlets, viz. Amazon by supplying them--not Apple--with DRM-free tracks
Despite this strategy being obviously ineffective, they continue it to their own detriment! That is, the more DRM'd tracks the iTS sells, the stronger the iPod lock-in becomes.

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I haven't bought an iPhone because I don't like being told where, with whom, and how I must use it.

Apple isn't unique in this regard.

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Guest wrote:
The games market is massive and Apple are light years behind.

Light years? Hell, I'd say it was entire universes behind. Maybe 5 universes. Or 6.

Can you imagine Apple trying to make a handheld device that could play games? Oh, um...

In most ways, I agree that Apple's behavior is inline with its marketshare. But explain how "You may not sell the Pull-My-Finger Application because our company doesn't like it." is not a free market violation. I can't.

In reply to some of the comments here:

I tried to stay away from the issue of whether or not Apple's status qualified -- or might eventually qualify -- as an "illegal" monopoly. I am not a lawyer, but I strongly suspect there is nothing illegal going on here.

Which then raises the question: What's wrong with a company becoming a "monopoly" by "legitimate" means? What's wrong with rewarding a company that comes to dominate a market because its product is so much better than its competitors?

On the surface, with no other qualifiers, nothing is wrong with it. As I tried to stress in the column, my past and continuing support for Apple is based on this conclusion. However, I can think of at least three things that I would worry about as a consumer (as opposed to a stock holder in the company):

-- Decline in innovation. With no effective competition, the pressure to spend millions of dollars in research and development, so as to keep at the head of the pack, starts to decline.

-- Rise in prices. Again, with no effective competition, why not keep margins ridiculously high?

-- Too much constraint. With no competing alternative, consumers have no other place to turn. The "monopoly" can pretty much dictate terms to consumers without fear that sales might decline signficantly if consumers don't like the terms.

We're certainly not at any of these extremes with Apple yet. If things never got more extreme than they are now, I wouldn't complain (at least not much). Still, I remain concerned about whether or not this is a direction we might be heading. That was the rationale behind the column.

You shouldn't blame Apple for restrictions on the iPhone would you want to let a hacker design software to gather all of your personal information off you phone and send it to him. Or better let use your phone as a bot? What about writing a virus for your phone? How about send emails to everyone in your address book? What about spam you and everyone else in your address book?

Get the point???

Just to give you some food for thought.

Apple is a unique company, but it is one that competes in an open market.

There is still a choice of MP3 players and consumers everywhere are free to choose which one they want. The iPod success is the result of more people wanting an iPod than another brand and each consumer made their own purchasing decision.

In the area of music or movies, the consumer again chooses. I've bought a few iPods over the years (including the original one that my granddaughter got when she was 5), but I've spent less than $10 at the iTunes store. I have the music I want on CDs and now days only buy movies that are on sale at Best Buy or Circuit City. Down to $4.99 in some cases so why spend more at the iTunes store? Then there are the free movies at the local library.

Apple simply builds its own products and lets the market decide on how good a job they have done. I don't see that as a monopoly - it's the customer choosing what they want.

AT&T was horrible. Technology was stagnant and long distance calls were ridiculously expensive. The revolution in phone services did not take place until after AT&T was dismembered.

I will not claim that breaking a big national monopoly into several regional monopolies was the best solution but to say that AT&T was doing a good job is indulging in extremely selective recall.

Of all the comments that I have read, I think only "kenaustus" understands the situation. And, Ted, I think you should consult a dictionary before throwing the word "monopoly" around so loosely.

A monopoly doesn't mean that you simply have a large market share. According to the dictionary on my Mac (and similarly for other dictionaries that I have consulted), a monopoly is "the exclusive posssession or control of the supply or trade in a commodity or service".

Apple certainly has no exclusive posssession of either supply or trade in devices such as iPods. They have numerous competitors in not only portable music players such as iPods but in virtually every type of product that they sell. In the iPod market, for example, Apple clearly sells superior or more favorable products for whatever reason (quality, ease-of use, coolness, etc.) in the judgement of purchasers of such products so that is precisely why Apple has such a large market share. Apple has no exclusive possession of either supply or trade in any form whatsoever.

Using macs for quite some time as a designer I faced a few unusual business practices from Apple that might have led to it current customer satisfaction as well as its new found dominance. Cheap as well as free software.

Key Grip was a Macromedia product that had IP issues so Apple took it over and renamed it Final Cut Pro (This was the beginning of the end for PCs as well as the "then" fastest transfer firewire) This caused a HUGE dent in post production as we know it today 30k systems are now being replaced by 5k systems that deliver the same results, faster, and cheaper.

SoundJam was purchased by Apple and build iTunes from it (free = build eco system)

When Shake was bought of it used to be 4k they sell it now for $250 (attract those users by force if they appreciate Shake)

OSX - need I explain?

iLife suite this is what Apple used as leverage over Windows non cross integration amongst it applications other than Office Suites.

To skip to the bottom line in late 90s I began to think that Apple underselling applications was no different than designer selling websites, print work for cheap. It affects the whole community involved because then everyone else has to lower their prices to even get work produced. Hence starving artist.

Apple lowered its software and produced a due or die device (not the ipod) but the first iMac. This toy was in most design firms, some post studios and over time peoples homes.

If underselling software to attract more users and to entice the user to use that software requires a purchase of an artist machine, then Apple is your choice. Choice is what separates Apple from Windows. As Nemo stated PC world made their bed now they're suffering.

If Psystar makes a dent in Apple's case then Apple's "stronghold" will vanish as soon as it has earned its stripes. PC come in all colors and unless Apple is preventing PC from making them they may never become a Monopoly. In music as long as CDs, radio, vinyl, open performances are not blocked by Apple or overtaken by Apple then there is no Monopoly.

MS would buy, pillage, partner to steal disassemble and re-integrate software (some may remember Real being dumped after MS took the good stuff)

My BIG question would be if Microsoft keeps loosing the 24 billion they have stashed over the next few years, will Apple come to their rescue like Microsoft did for Apple in the late 90s when Jobs was acting CEO.

[quote="Guest"]Let's define "Freedom" and "Anarchy"

Freedom: the power or right to act, speak, or think as one wants without hindrance or restraint

Anarchy: a state of disorder due to absence or nonrecognition of authority

Blessings,
Heath[/quot]
Well, Heath - it's interesting that you should go to your Mac dictionary and choose the pejorative definition of anarchy. The other definition is the only one that would equate to freedom:
"absence of government and absolute freedom of the individual, regarded as a political ideal" Given your terms of use, it was altogether a pretty crude equation. Work in the White House, do you?

Apple has a monopoly in the Mac, iPod and iPhone markets. Just like Ford has a monopoly on Fords. Apple doesn't have a monopoly in the pc, mp3 player or cell phone markets. To suggest such is patently ridiculous. Steve Jobs motivations (if you could even know them) are irrelevant.

I agree. Besides that, it's not realistic to expect Apple to be 100% 'open' in a world of 'locked down' products.