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  • Why Apple Isn’t Microsoft

    September 26th, 2007

    As Apple continues to grow a lot faster than most people ever expected, it’s inevitable that there are going to be comparisons with Microsoft. This is particularly true when it comes to the iPod and iTunes, both of which hold serious majorities in market share.

    So if you complain that Microsoft is a monopoly, shouldn’t you also make the same complaint about Apple and its standing in the digital music market?

    Unfortunately, many of the people who make this claim have failed to learn from the lessons of history, particularly how Microsoft came to occupy a dominant position in PC operating systems and office suites. And, no, it wasn’t because they built the best product and beat their competitors fair and square.

    From the very beginning, when Bill Gates played a shell game with IBM to sell them the original MS-DOS operating system before he acquired it from another company, it is clear that Microsoft knew how to play the game of business hardball, ethical or otherwise.

    Through the years, Microsoft has grown, in part, by double-crossing its partners. Remember when they were working with IBM to develop OS/2, the next great industrial-grade operating system? Well, that partnership evaporated, and Microsoft created Windows NT instead. That way, they could keep all the profits to themselves and not have to share the glory with anyone.

    This is not to say that NT was necessarily a bad operating system. Certainly it was a tremendous leap beyond the DOS-based Windows, and thus something that benefited all Microsoft customers in the end. But you don’t have to question why IBM these days is pushing open source.

    More recently, when its PlaysForSure partners couldn’t gain a foothold in the digital media player market against the iPod, Microsoft released a modified version of a Toshiba Gigabeat player, called it Zune, and went off in their own direction. Still no success, but it does show the folly of partnering with Microsoft.

    I do not need to recount the issues that led to antitrust actions against Microsoft in America and Europe. Even though some of the fine elements of those complaints may be debated, the overwhelming evidence shows that Microsoft employed all sorts of questionable tactics to achieve and retain market dominance.

    It was never about having the best product.

    Now compare that to Apple Inc.

    Over the years, Apple has done some pretty foolish things that squandered their prospects for early control of the personal computing market after the huge success of the Apple II. You can certainly argue about a lot of things that could have been done better — or at least differently — but can you honestly say Apple has used illegal marketing tactics to achieve its present-day status as a industry-leading consumer electronics manufacturer?

    Certainly, although it hasn’t always met shipping dates, Apple hasn’t played dirty tricks to enhance the Mac’s market share. They’ve simply built the product, shipped it, and let the customers decide whether or not to buy. There was no tie-in with other companies, forcing you to pay for their products even if you didn’t want them, as you have to do with the typical PC and Windows.

    But what about the iPod? Doesn’t Apple have a huge advantage in that market segment? Sure they do, but they also started the iPod from absolutely nothing and, I gather, without any expectation that it would become a culstural icon. Apple had never built a digital music player before, and there were indeed a number of competitive products out there.

    Apple didn’t succeed by riding roughshod on Creative and other companies building music players. When the iTunes store first appeared on the Mac expanded to the Windows environment, Apple didn’t demand exclusive agreements with the music companies. They all had product at other music stores too.

    But a combination of ease of use, sex appeal and smart advertising drove Apple to the top of the heap. They didn’t prevent competitors from building their own music players. While the iPod and iTunes were closed platforms, that didn’t prevent other companies from building similar environments for their own gadgets, or offering superior hardware and music store integration.

    Should there be one unified format that would allow you to take your iPod and have it work with any music store? Should iTunes integrate as seamlessly with the Zune and other products? Maybe, maybe not. But that doesn’t mean music lovers don’t have a choice.

    However, don’t forget that many Apple products these days are fully compatible with Windows. On the other hand, Microsoft and its PlaysForSure partners treat the Mac as if it didn’t exist.

    No, Apple isn’t a monopoly and it doesn’t behave like one. Let this argument die a quick death once and for all.



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