And some might argue that when Steve Jobs tells people to buy something that he's invested millions of dollars in (personally, even, considering his stock position) and which he's been involved in the development of, it just might have more weight than when an athlete who has never even seen a particular car dealership endorses it.
Same's true of Balmer, Ellison, etc. They've got vested interests, of course, but they are at least domain-knowledgeable.
Mike, you've got to lay off some of this stuff that you're so personally invested in. It makes for poor posts.
1) This is a new service. It took the FTC 10+ years to look at blogs. Maybe they will regulate this service. I personally don't like the FTC's blogger rules in either letter or intent, but it's ridiculous to whinge that the FTC hasn't yet moved on a service that appeared six months ago.
2) When an athlete endorses a car dealership, everyone knows the arrangement. The FTC was concerned (maybe wrongly) that blogs blur the line between news, editorial, and paid shilling. It is kind of a different thing.
3) Weren't you the one going all morally indignant when Pandora started suggesting that its competitors should be subject to unfair regulation? Didn't you write a lot of stuff about how they disappointed you were that they were lobbying to have unfair treatment applied to others rather than fighting the unfair treatment they were subject to? Pot, meet kettle.
I love Techdirt. The XKCD CwF + RtB (you've got to get a catchier acronym) article made my morning. You do good work. And then sometimes you come across as not a lot better than the people you criticize. Please stop writing about issues that directly affect Techdirt unless you get can get some distance, ok?
So you're clearly not a business type, and not an economist, and not a creative person. What, exactly, do you do for a living?
Middlemen are indeed important when there are differences in scale between what producers can make and what consumers can use. It would have been impractical for movie studios to distribute movies to each individual who wanted to see one... in 1920.
As technology improves the marketplace, though, it's natural for middlemen to be eliminated. Look at Walmart and its relationship with suppliers, or Amazon with theirs. In both cases, at least one layer of distribution has been eliminated, reducing costs (or increasing profit). Eventually, both of these companies may face competition from their suppliers and themselves disappear. I, for one, do not "thank the Lord" that a company (or you) limit what I can buy or how I can use what I've bought.
And good luck with your quest to control how your fans promote your products. It's not going to work. Think more about what you can do to make that friend who saw 10 minutes of footage -- which studios would pay a fortune for air time to broadcast in commercial form -- still want to go to the theatre, buy the t-shirts and soundtracks, and generally produce revenue.
I don't think anyone here is going to be ashamed of being aware of economic and technical realities. And the vitriol aimed at middlemen is largely reserved for those who seek to use the government to prop up a failing business model rather than evolving with the times.
1) They've always done this for old communications mediums and old markets
2) This is just the rote application of those old rules to new mediums and new markets
3) Therefore, it's a good idea
Do I have that right? Do you maybe, you know, see a problem with #2 there?
And Mike, at least in this case, is tarring and feathering executives and legal departments, not content producers. Many content producers understand the value of audience. The knee-jerkers implementing these policies only understand the value of product.
You know, sometimes I think these jokes genuinely believe it's in their best interest to drive fans away.
But then I come to my senses and look forward to the day when a bunch of the decision making execs come forward to reveal that they are actually a cabal of performance artists who got together in the early 90's with the express goal of destroying the film and music industries, and that they've worked their asses off, gone to MBA schools, and all of that crap, just so they can bring the hated empires down from the inside.
I mean, really... my theory is more plausible, right? This has to be one very big joke. Nobody could genuinely be that clueless.
Maybe this all goes back to grade school, where we were taught that copying off other peoples' papers was cheating, and that if we saw people copying from us we should notify the teacher? Certainly a lot of our psychology is cemented in those formative years.
Maybe the copyright insanity going on is just an unintended side effect of the formalization of education that we've seen in the past 100 years? Maybe, just to brainstorm, greater focus on teamwork and collaborative assignments might reverse the trend?
...it's a logarithmic distribution, with most apps seeing few sales and a few apps seeing most sales? And the vast majority of people who see it as an easy, slam dunk, get-rich-quick business fail?
That almost sounds like, I don't know, books, movies, music, games, restaurants, retail stores, clothing manufacturers, and, oh, pretty much every other business?
The only thing newsworthy about this finding is that anyone found it newsworthy.
Agreed. Some of the best legal advice I've ever gotten was to not do anything. Unfortunately, there's a built in conflict of interest; getting this kind of advice is like asking a roofer if you should hire him to repair your roof.
If you communicate to prospective clients that you understand that business goals indicate using legal action sparingly, and that you're not looking to maximize billable hours by maximizing legal engagement, you'll do just fine in the market.
So that may not be your best argument. Also, do you have any links to info about why the police were looking for the protesters? You seem pretty sure that nothing illegal had occurred, but none of the articles I've found have addressed that point.
You're positive there was no vandalism, etc? Can you document? It still wouldn't change the distinction between questioning the police conduct and questioning the legality of interfering with that conduct, even if it was inappropriate. But it would give more context.
Um. Reframe your argument with "probably cause." Warrants are issued by judges in response to requests from prosecuting attorneys. When police react to crimes in progress (or the suspicion thereof), the standard is probable cause.
In this case, we don't know enough to say what the police were acting on. Mere dislike of protesters? Possibly. A string of broken windows and vandalized cars? Possibly. Who knows?
But regardless, "they shouldn't have been doing that" is never going to be a legal defense for obstructing police efforts. It's a fine rationale for civil disobedience, but CD implies an acceptance of prosecution.
Actually, he'd still be in the wrong if he were at the top of the building with a bull-horn and pair of binoculars. Please read the article: he wasn't "organizing" protesters, he was warning them of police activity so they could evade arrest. You try that with a bull-horn and see how that goes.
There are two issues here:
1) Should the police have been trying to apprehend the protesters in question?
2) Given that there police *were* trying to apprehend the protesters in question, what are the legal implications of helping them evade arrest?
Lots of people are reacting strongly to (1), with the implication that if the police were in the wrong there, it should be OK to obstruct them in (2). But that's not the way it works in the U.S. We rely on the courts (and sometimes police oversight committees) to determine police wrongdoing. You don't get to say "I'm pretty sure that they didn't commit a crime, but the police are after them, so I'll help them get away." Doesn't matter if it's bull-horn or Twitter then.
Without knowing more about the protest, I've got no opinion on (1) here. Maybe the police were in the wrong in trying to track and/or apprehend the protesters. But that's not the question here. In the actual question, this guy was clearly (and with a lot of effort and expense on his part) interfering with the police.
Hey, Mike? When you frame it as "arrested for using Twitter to organize a protest", of course it sounds insane, and you're going to get all of the comments you see here about America and Iran and whatnot.
But when you read the story, and the related stories, you've got a guy in a hotel room using police scanners and Twitter for the express purpose of helping people who knew they were wanted by police evade capture.
Now, whether the police should be arresting protesters (my vote is "sometimes"*) is another issue. But given that the police were indeed attempting to arrest some people, how is it not "hindering prosecution" to help them escape?
* Obviously, people shouldn't be arrested for mere protesting, but I'm less ok with illegal activities done in the course of protest (see: property damage, assault, etc).
I worked for several years in the IT publishing industry (not PC Magazine). And I can assure you that every single positive or negative review generated plenty of emails insinuating stuff like that.
However, I never saw that kind of causality. What usually happened was that a positive review was picked up on by vendors who would then run ads referencing the (weeks or months old) review. And a negative review would cause advertisers to pull their advertising in protest. So you can see how, in my experience, ad pages are a result of reviews and not the cause.
For my part, writing reviews and working at least tangentially with maybe 150 reviews over four years, I never saw even a tiny shred of pressure (or even notification of increased/decreased ad buys) from the sales/marketing side. I expect that's the general case, even if there are exceptions.
Even low end wanna-be journalists, like I was, hate being told what to do and would yell and scream from the rooftops if there was revenue pressure to produce particular review outcomes. It's an easy and kind of glib conspiracy theory, but I've been places where I would have seen it in action, and I'm here to tell you that it just don't happen.
From: Jack Thompson
To: Joe Billy Bob
Subject: Please recreate facebook group
Crap, someone went and reported abuse on that facebook group I had you set up. Can you set up another one? I'll have to amend the lawsuit and hope that someone doesn't report this one too.
Crap, is that the word for defense attorneys who mount a legitimate defense even if they personally doubt a client's innocence?
Lawyers are obligated to represent their clients' interests. Whether to pursue trademark claims like this is a business decision made by business people. The lawyers merely advise on odds of winning and execute whatever decision is made (note that some lawyers are also executives).
Heck, I'm not a lawyer, generally don't like 'em that much, but let's at least put blame where it belongs.
. I'm saying they shouldn't go out of their way to block Palm. How hard is it to understand the difference.
It's a strategic choice either way. The technical implementation is so trivial that it should have zero impact on the analysis. Pretend for a second that Apple had to flip some switch (cost: $1) to enable Palm; would you then argue against doing, because that would switch the case from "not blocking Palm" to "actively helping Palm"?
Um. But that's an opinion I don't share. It's not a "vague future profits" vs. "clear profits today." I don't know why you keep insisting that's the case. You clearly believe it, but I think you're wrong. I'm not sure why you keep insisting that my opinion can't possibly be right.
For the same reason I'd insist your opinion about math couldn't possibly be right, for some assertions about math :). I can show you a spreadsheet with reasonable estimates of the costs of opening the platform; can you do the same with the benefits?
I agree philosophically about openness; my real complaint here is the lack of a concrete bridge from the handwaving economics to the specific assertion that Apple would make more money being open. Are you arguing that they'd sell *more* hardware? That the increase in media sales would offset any losses in hardware? That entirely new revenue streams would appear (and if so, what)? Or are you just pretty sure it would work out and that Apple should risk literally billions in profits based on a (lucid, but controversial) "understanding of economics and markets"?
You're asking Apple to take the chance of a multibillion dollar hit. Even if you disagree with me on scale, we're at least talking hundreds of millions of dollars (a 2% reduction in iPhone/iPod sales across the next 5 years works out to an NPV of $200m, assuming zero market growth and a ridiculously high 15% WACC). Nobody makes decisions like that without real models.
So where's your model of the benefits? I'm fine with the economic opinion, but if you're arguing actual companies and financials, I think you have to flesh out your argument more.
To be clear, my original complaint was with the offhand way that both Manjoo and you presented this as a clear and obvious mistake on Apple's part. Now I'm just irked that you want to talk about markets and economics to support an argument about specific line items on an income statement ;)
Not struggling. We disagree. Doesn't mean I'm struggling.
You took me out of context. I said you were struggling with black-and-whiteisms, which you most assuredly are. Re-read your posts -- they're all about what "people" in general will do with great homogeneity. This whole issue is about 2% here, 5% there, against 20% differences in margins on millions to billions of products (including media sales). The actual "better choice", from a financial perspective, likely hinges on whether iPod market share drops from 74% to 60% or from 74% to 50% in an open-iTunes world.
And the whole linkage between Apple's protection of a closed ecosystem to Apple being "scared" to Apple "not being interested in innovating" is classic extremist argument. You went from a company looking to prevent incremental market share erosion to a huge personality judgment which is belied by the R&D numbers in June's 10Q. I'm sorry, but that is clearly a case of struggling with nuance.
It's the difference between positive innovation and negative innovation. Negative is blocking others. Positive is adding value. Which is Apple doing with this move?
See, here's the fundamental disagreement. I don't buy that (though the phrasing is good). By that reasoning, every market situation calls for maximal aid to ones' competitors, and platforms should give their originators no unique benefit.
While I agree that's when open platforms tend to evolve to, that's a result of competitive pressure, not a strategic goal. It's leaving the real of real economics (where ideas of scarce and non-scarce good live) and heading into more of an abstract political view that is contrary to real economics -- as evidenced by the way companies work and platforms evolve from closed to open.
There's more evidence for my position today, by the way. On the 28th, Palm shipped a Pre update that did not re-enable iTunes sync. Today, two days later, the price dropped to $79. At launch it was $249.
Now, there are a lot of factors at work, but I think there's a strong argument to be made that iTunes compatibility (which was present and promised at launch) represented a good chunk of that $170 change in (presumably) equilibrium price. Hey, look, Apple's closed platform is good for consumers; it drives prices down! :)
I'm fine disagreeing, and you're a bright guy and interesting to read, but please please please take three things away from this conversation:
1) If you're going to assert that a move is bad from a profit perspective, please at least use *some* numbers rather than unsupported throwaway lines like "nobody buys iPods because of iTunes." To anyone who follows this business, that's a howler.
2) If you're going to rely on the generality that open platforms lead to more opportunities, at least acknowledge the costs associated with loss of market share in complimentary items, and that the vague promise of greater profits in the future is hard to accept in lieu of clear profits today.
3) When reposting someone else's material for a hearty "what he said!", try not to be swayed by philosophical agreement, and think for a moment about whether the writer supported their argument. Even if you agree, there's a lot of value in saying "well, he makes a huge assumption about financial impact, but even in the absence of numbers I think he's probably right."
Mike, you're really struggling with the black-and-whiteisms here.
The iPhone has a bunch of competitive advantages over the Pre. The Pre has some advantages over the iPhone. Both companies will continue to innovate in some areas and copy others in some areas. Such is business.
Why would Apple give up *any* of its competitive advantages, or *any* of its profit? Why give Palm (and everyone else) a huge boost just to prove that Apple can compete on "other facets"? It's kind of bizarre reasoning.
iTunes is a tool to sell iPods and iPhones. There's no moral or financial reason to turn it into some kind of natural resource to be shared among competitors.
And I'd say that R&D budgets and new products brought to market probably speak more to a company's interest in innovating than whether they choose to hobble themselves in the marketplace.
On the post: Athletes Can Start Endorsing A Brand In Hours... But A Blogger Does It And It's A Federal Issue?
Re:
And some might argue that when Steve Jobs tells people to buy something that he's invested millions of dollars in (personally, even, considering his stock position) and which he's been involved in the development of, it just might have more weight than when an athlete who has never even seen a particular car dealership endorses it.
Same's true of Balmer, Ellison, etc. They've got vested interests, of course, but they are at least domain-knowledgeable.
On the post: Athletes Can Start Endorsing A Brand In Hours... But A Blogger Does It And It's A Federal Issue?
Re: Ugh
On the post: Athletes Can Start Endorsing A Brand In Hours... But A Blogger Does It And It's A Federal Issue?
Ugh
1) This is a new service. It took the FTC 10+ years to look at blogs. Maybe they will regulate this service. I personally don't like the FTC's blogger rules in either letter or intent, but it's ridiculous to whinge that the FTC hasn't yet moved on a service that appeared six months ago.
2) When an athlete endorses a car dealership, everyone knows the arrangement. The FTC was concerned (maybe wrongly) that blogs blur the line between news, editorial, and paid shilling. It is kind of a different thing.
3) Weren't you the one going all morally indignant when Pandora started suggesting that its competitors should be subject to unfair regulation? Didn't you write a lot of stuff about how they disappointed you were that they were lobbying to have unfair treatment applied to others rather than fighting the unfair treatment they were subject to? Pot, meet kettle.
I love Techdirt. The XKCD CwF + RtB (you've got to get a catchier acronym) article made my morning. You do good work. And then sometimes you come across as not a lot better than the people you criticize. Please stop writing about issues that directly affect Techdirt unless you get can get some distance, ok?
On the post: Hollywood Can't Handle Anyone Connecting With Fans... So It Contractually Tries To Stop Them
Re: Re: But of course...
Middlemen are indeed important when there are differences in scale between what producers can make and what consumers can use. It would have been impractical for movie studios to distribute movies to each individual who wanted to see one... in 1920.
As technology improves the marketplace, though, it's natural for middlemen to be eliminated. Look at Walmart and its relationship with suppliers, or Amazon with theirs. In both cases, at least one layer of distribution has been eliminated, reducing costs (or increasing profit). Eventually, both of these companies may face competition from their suppliers and themselves disappear. I, for one, do not "thank the Lord" that a company (or you) limit what I can buy or how I can use what I've bought.
And good luck with your quest to control how your fans promote your products. It's not going to work. Think more about what you can do to make that friend who saw 10 minutes of footage -- which studios would pay a fortune for air time to broadcast in commercial form -- still want to go to the theatre, buy the t-shirts and soundtracks, and generally produce revenue.
I don't think anyone here is going to be ashamed of being aware of economic and technical realities. And the vitriol aimed at middlemen is largely reserved for those who seek to use the government to prop up a failing business model rather than evolving with the times.
On the post: Hollywood Can't Handle Anyone Connecting With Fans... So It Contractually Tries To Stop Them
Re:
1) They've always done this for old communications mediums and old markets
2) This is just the rote application of those old rules to new mediums and new markets
3) Therefore, it's a good idea
Do I have that right? Do you maybe, you know, see a problem with #2 there?
And Mike, at least in this case, is tarring and feathering executives and legal departments, not content producers. Many content producers understand the value of audience. The knee-jerkers implementing these policies only understand the value of product.
On the post: Hollywood Can't Handle Anyone Connecting With Fans... So It Contractually Tries To Stop Them
An easy solution
But then I come to my senses and look forward to the day when a bunch of the decision making execs come forward to reveal that they are actually a cabal of performance artists who got together in the early 90's with the express goal of destroying the film and music industries, and that they've worked their asses off, gone to MBA schools, and all of that crap, just so they can bring the hated empires down from the inside.
I mean, really... my theory is more plausible, right? This has to be one very big joke. Nobody could genuinely be that clueless.
On the post: It's Natural To Freak Out Over Someone Copying Your Stuff... But It Doesn't Make It Rational
Are we just trained?
Maybe the copyright insanity going on is just an unintended side effect of the formalization of education that we've seen in the past 100 years? Maybe, just to brainstorm, greater focus on teamwork and collaborative assignments might reverse the trend?
On the post: More Evidence Suggests That iPhone App Store Doesn't Really Sell That Much...
You mean...
That almost sounds like, I don't know, books, movies, music, games, restaurants, retail stores, clothing manufacturers, and, oh, pretty much every other business?
The only thing newsworthy about this finding is that anyone found it newsworthy.
On the post: Ralph Lauren And Its Lawyers Discover The Streisand Effect On Bogus DMCA Takedown
Re:
If you communicate to prospective clients that you understand that business goals indicate using legal action sparingly, and that you're not looking to maximize billable hours by maximizing legal engagement, you'll do just fine in the market.
On the post: Ralph Lauren And Its Lawyers Discover The Streisand Effect On Bogus DMCA Takedown
Re:
2) Even if the ad were photoshopped to make her skinnier, it would clearly be protected as both parody and commentary
Trademarks serve to protect brands from imposters, not to give the owner total control over any appearance of the marks anywhere.
On the post: What's Illegal About Using Twitter To Organize Protests?
Re: Re: Varying levels of 'protest'
So that may not be your best argument. Also, do you have any links to info about why the police were looking for the protesters? You seem pretty sure that nothing illegal had occurred, but none of the articles I've found have addressed that point.
You're positive there was no vandalism, etc? Can you document? It still wouldn't change the distinction between questioning the police conduct and questioning the legality of interfering with that conduct, even if it was inappropriate. But it would give more context.
On the post: What's Illegal About Using Twitter To Organize Protests?
Re:
In this case, we don't know enough to say what the police were acting on. Mere dislike of protesters? Possibly. A string of broken windows and vandalized cars? Possibly. Who knows?
But regardless, "they shouldn't have been doing that" is never going to be a legal defense for obstructing police efforts. It's a fine rationale for civil disobedience, but CD implies an acceptance of prosecution.
On the post: What's Illegal About Using Twitter To Organize Protests?
Re: Re: The law is the law sometimes
There are two issues here:
1) Should the police have been trying to apprehend the protesters in question?
2) Given that there police *were* trying to apprehend the protesters in question, what are the legal implications of helping them evade arrest?
Lots of people are reacting strongly to (1), with the implication that if the police were in the wrong there, it should be OK to obstruct them in (2). But that's not the way it works in the U.S. We rely on the courts (and sometimes police oversight committees) to determine police wrongdoing. You don't get to say "I'm pretty sure that they didn't commit a crime, but the police are after them, so I'll help them get away." Doesn't matter if it's bull-horn or Twitter then.
Without knowing more about the protest, I've got no opinion on (1) here. Maybe the police were in the wrong in trying to track and/or apprehend the protesters. But that's not the question here. In the actual question, this guy was clearly (and with a lot of effort and expense on his part) interfering with the police.
On the post: What's Illegal About Using Twitter To Organize Protests?
Ugh
But when you read the story, and the related stories, you've got a guy in a hotel room using police scanners and Twitter for the express purpose of helping people who knew they were wanted by police evade capture.
Now, whether the police should be arresting protesters (my vote is "sometimes"*) is another issue. But given that the police were indeed attempting to arrest some people, how is it not "hindering prosecution" to help them escape?
* Obviously, people shouldn't be arrested for mere protesting, but I'm less ok with illegal activities done in the course of protest (see: property damage, assault, etc).
On the post: Did The FTC's New 'Blogger' Guidelines Just Change The Way All Book/Music Reviews Must Be Conducted?
Re: What about publications like PC Magazine...?
However, I never saw that kind of causality. What usually happened was that a positive review was picked up on by vendors who would then run ads referencing the (weeks or months old) review. And a negative review would cause advertisers to pull their advertising in protest. So you can see how, in my experience, ad pages are a result of reviews and not the cause.
For my part, writing reviews and working at least tangentially with maybe 150 reviews over four years, I never saw even a tiny shred of pressure (or even notification of increased/decreased ad buys) from the sales/marketing side. I expect that's the general case, even if there are exceptions.
Even low end wanna-be journalists, like I was, hate being told what to do and would yell and scream from the rooftops if there was revenue pressure to produce particular review outcomes. It's an easy and kind of glib conspiracy theory, but I've been places where I would have seen it in action, and I'm here to tell you that it just don't happen.
On the post: Rather Than Suing, Jack Thompson Apparently Should Have Just Clicked The 'Report Abuse' Button
The email backstory
To: Joe Billy Bob
Subject: Please recreate facebook group
Crap, someone went and reported abuse on that facebook group I had you set up. Can you set up another one? I'll have to amend the lawsuit and hope that someone doesn't report this one too.
Yours,
Jacky
On the post: Do Morons In A Hurry Shop For iPhones At Woolworths Down Under?
Re: Re: Oh for frak's sake
Lawyers are obligated to represent their clients' interests. Whether to pursue trademark claims like this is a business decision made by business people. The lawyers merely advise on odds of winning and execute whatever decision is made (note that some lawyers are also executives).
Heck, I'm not a lawyer, generally don't like 'em that much, but let's at least put blame where it belongs.
On the post: Why Apple Should Let Other Devices Connect To iTunes
Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Um, what?
It's a strategic choice either way. The technical implementation is so trivial that it should have zero impact on the analysis. Pretend for a second that Apple had to flip some switch (cost: $1) to enable Palm; would you then argue against doing, because that would switch the case from "not blocking Palm" to "actively helping Palm"?
Um. But that's an opinion I don't share. It's not a "vague future profits" vs. "clear profits today." I don't know why you keep insisting that's the case. You clearly believe it, but I think you're wrong. I'm not sure why you keep insisting that my opinion can't possibly be right.
For the same reason I'd insist your opinion about math couldn't possibly be right, for some assertions about math :). I can show you a spreadsheet with reasonable estimates of the costs of opening the platform; can you do the same with the benefits?
I agree philosophically about openness; my real complaint here is the lack of a concrete bridge from the handwaving economics to the specific assertion that Apple would make more money being open. Are you arguing that they'd sell *more* hardware? That the increase in media sales would offset any losses in hardware? That entirely new revenue streams would appear (and if so, what)? Or are you just pretty sure it would work out and that Apple should risk literally billions in profits based on a (lucid, but controversial) "understanding of economics and markets"?
You're asking Apple to take the chance of a multibillion dollar hit. Even if you disagree with me on scale, we're at least talking hundreds of millions of dollars (a 2% reduction in iPhone/iPod sales across the next 5 years works out to an NPV of $200m, assuming zero market growth and a ridiculously high 15% WACC). Nobody makes decisions like that without real models.
So where's your model of the benefits? I'm fine with the economic opinion, but if you're arguing actual companies and financials, I think you have to flesh out your argument more.
To be clear, my original complaint was with the offhand way that both Manjoo and you presented this as a clear and obvious mistake on Apple's part. Now I'm just irked that you want to talk about markets and economics to support an argument about specific line items on an income statement ;)
On the post: Why Apple Should Let Other Devices Connect To iTunes
Re: Re: Re: Re: Re: Re: Re: Re: Um, what?
You took me out of context. I said you were struggling with black-and-whiteisms, which you most assuredly are. Re-read your posts -- they're all about what "people" in general will do with great homogeneity. This whole issue is about 2% here, 5% there, against 20% differences in margins on millions to billions of products (including media sales). The actual "better choice", from a financial perspective, likely hinges on whether iPod market share drops from 74% to 60% or from 74% to 50% in an open-iTunes world.
And the whole linkage between Apple's protection of a closed ecosystem to Apple being "scared" to Apple "not being interested in innovating" is classic extremist argument. You went from a company looking to prevent incremental market share erosion to a huge personality judgment which is belied by the R&D numbers in June's 10Q. I'm sorry, but that is clearly a case of struggling with nuance.
It's the difference between positive innovation and negative innovation. Negative is blocking others. Positive is adding value. Which is Apple doing with this move?
See, here's the fundamental disagreement. I don't buy that (though the phrasing is good). By that reasoning, every market situation calls for maximal aid to ones' competitors, and platforms should give their originators no unique benefit.
While I agree that's when open platforms tend to evolve to, that's a result of competitive pressure, not a strategic goal. It's leaving the real of real economics (where ideas of scarce and non-scarce good live) and heading into more of an abstract political view that is contrary to real economics -- as evidenced by the way companies work and platforms evolve from closed to open.
There's more evidence for my position today, by the way. On the 28th, Palm shipped a Pre update that did not re-enable iTunes sync. Today, two days later, the price dropped to $79. At launch it was $249.
Now, there are a lot of factors at work, but I think there's a strong argument to be made that iTunes compatibility (which was present and promised at launch) represented a good chunk of that $170 change in (presumably) equilibrium price. Hey, look, Apple's closed platform is good for consumers; it drives prices down! :)
I'm fine disagreeing, and you're a bright guy and interesting to read, but please please please take three things away from this conversation:
1) If you're going to assert that a move is bad from a profit perspective, please at least use *some* numbers rather than unsupported throwaway lines like "nobody buys iPods because of iTunes." To anyone who follows this business, that's a howler.
2) If you're going to rely on the generality that open platforms lead to more opportunities, at least acknowledge the costs associated with loss of market share in complimentary items, and that the vague promise of greater profits in the future is hard to accept in lieu of clear profits today.
3) When reposting someone else's material for a hearty "what he said!", try not to be swayed by philosophical agreement, and think for a moment about whether the writer supported their argument. Even if you agree, there's a lot of value in saying "well, he makes a huge assumption about financial impact, but even in the absence of numbers I think he's probably right."
On the post: Why Apple Should Let Other Devices Connect To iTunes
Re: Re: Re: Re: Re: Re: Um, what?
The iPhone has a bunch of competitive advantages over the Pre. The Pre has some advantages over the iPhone. Both companies will continue to innovate in some areas and copy others in some areas. Such is business.
Why would Apple give up *any* of its competitive advantages, or *any* of its profit? Why give Palm (and everyone else) a huge boost just to prove that Apple can compete on "other facets"? It's kind of bizarre reasoning.
iTunes is a tool to sell iPods and iPhones. There's no moral or financial reason to turn it into some kind of natural resource to be shared among competitors.
And I'd say that R&D budgets and new products brought to market probably speak more to a company's interest in innovating than whether they choose to hobble themselves in the marketplace.
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