Apple Needs Competition

by James R. Stoup Sep 24, 2007

If you are thinking about buying a new iPod or iPhone, then you really need to read this great piece by Jeremy Horwitz entitled Is Apple Going Rotten? Mr. Horwitz brings up four major problems with Apple and the reaction these problems have generated from consumers. It is a very fascinating look at how Apple is beginning to mirror Microsoft with its new iPod/iPhone business strategy.

To summarize Mr. Horwitz’s article, he finds fault with the following:

1. Apple Breaks 2005-2007 Video Add-Ons: No Warning, Just Buy New Ones
2. iTunes Store iPod Games: Buy Them Again for New iPods
3. iPod touch Screen Problems: Deny Them, Charge Restocking Fees
4. iPhone Ringtones: Pay Twice for Each Song; Forget Using Your Own

Of these four complaints only one, #3, is a “real” problem. And by “real” I mean a problem that Apple couldn’t have easily avoided. Hardware mistakes do happen. Defective products sometimes make it onto shelves. You can’t be perfect; all you can do is offer refunds and try to get it right next time. However, restricting what devices can play video, preventing games from playing, and forcing customers to re-buy their music, those are all software problems that shouldn’t really be problems in the first place. In fact, they are issues that shouldn’t even exist.

Perhaps what most clearly represents this new lunacy is the practice of forcing consumers to re-buy iPod games. Why did Apple do this? I have no clue. After all, this hurt Apple’s image and didn’t drastically improve their bottom line. Seriously, how much money do you think they are making by forcing their customers to buy Zuma and Pacman again? This particular issue makes Apple look very greedy because there is no technical or customer-friendly reason to implement such a stupid policy. At most, all Apple had to do was recompile some code for a new iPod release, so please don’t tell me this was about anything other than making money.

Now, I’m not against making money. I understand that Apple is a business and businesses exist to make a profit, and I’m cool with that. However, there is a line between making a nice profit off your customers, and squeezing every last drop of blood from your customers. Ultimately, though, this worries me because it seems to signify a major shift in Apple’s attitude toward its customers.

When did Apple reach the point where they felt making great products wasn’t the best way to make money?

Tell me please, when did this happen? And how? How did Apple go from a mentality of “let’s make the best product in the world so everyone will have to buy one” to “how can we bleed our customers for as much money as possible before they die and then can we sell the corpse?” Breaking compatibility with past iPod compatible products is another example of this type of thinking. Apple had a nice system going but decided (correctly) they could make more money if they either a) forced customers to buy their own accessories or b) forced third party manufacturers to buy Apple branded “authentication chips” if they want their devices to still work. So let us review: Apple screwed their customers and bullied their partners and the only ones who benefit are the shareholders. Doesn’t that sound quite a bit like a gambit from the Microsoft playbook?

Why is all this happening? Because Apple thinks they can get away with it. And they will continue to think this until they get some real competition in the markets that the iPod and iPhone compete in. I can think of nothing better for consumers than if someone like Google released an application that could compete with iTunes and the iTMS. They wouldn’t even have to release any hardware; just releasing a nice piece of software would be enough to properly motivate Apple to start competing on merit again.

And maybe the cellphone makers will get their act together and actually release something that can compete with the iPhone. (I’m not really all that hopeful on this end, mind you, I’m just saying it would be nice.) It should be noted that Apple isn’t trying the same tactics on their computers because that is a market in which they still have to compete with the entrenched Windows market share. But if things continue, it will only be a matter of time before we start seeing similar “new revenue streams” appearing on our Macs.


  • While I agree that breaking compatibility with prior accessories is not great, the vendors who make those accessories are pleased that Apple does this. This way they can continue to garner a revenue stream from individuals who use the products and would like to continue to use the products. There are tradeoffs with upgrading. If you don’t like it, keep what you’ve got and quit your bitchin’. The reason why Apple continues to make changes like this is to keep the competition at bay. They have more then ample competition. The difference is that Apple manages to stay ahead of them with their updates and changes and modifications. They still make great products. If you want to complain about something, how about how you have to buy a new computer to run MS Vista, and if you want to run the full Pro version, you need a pretty stout machine that’ll cost you far more then buying some accessory for the iPod.
    The one thing I agree with you on is the quality problems coming out of the factory. Apple needs to clamp down on the quality control problems. That said, they are pushing the envelope with their touchscreen products. While touchscreen interfaces are by no means novel, Apple is using higher quality screens (in terms of sharpness and quality of picture) then what has been used in other touchscreen products. Without the economies of scale for such a product, it is hard to test everything to see what problems may arise. I think Apple does need to stay on top of their manufacturers for more visible quality problems.

    diablojota had this to say on Sep 24, 2007 Posts: 25
  • Is this some sort of companion piece to the article on Slasahdot yesterday?

    “When did Apple reach the point where they felt making great products wasn’t the best way to make money?”

    This is ridiculous. Seriously. Get a life.

    mattsgotredhair had this to say on Sep 24, 2007 Posts: 1
  • Repurchasing games is nothing new to someone who’s had to have had done it more than once when my cell phone has gone on the fritz. I’m not saying that this is a good business practice but it isn’t uncommon.

    I would have expected more from Apple, however.

    Keith Sheehan had this to say on Sep 24, 2007 Posts: 11
  • “When did Apple reach the point where they felt making great products wasn’t the best way to make money?”

    It’s been a subtle shift James, but I think the key moment was release of the original iPod and its non-user-replaceable battery.

    Folks can claim all they like that was a design decision, but the old Apple would have solved that design problem.

    It’s been downhill ever since.

    Chris Howard had this to say on Sep 25, 2007 Posts: 1209
  • Ultimately, though, this worries me because it seems to signify a major shift in Apple’s attitude toward its customers.

    This is the ONLY point on which I disagree with you.  IMO, there has been no shift at all.  Apple’s behavior throughout virtually its entire history is thinly disguised contempt for its lapdog user-base (to quote Ferris Bueller, “You can’t respect someone who kisses your ass”).

    And judging by the comments above (save for the always effervescent Chris Howard), they have no reason to do anything any differently.

    Beeblebrox had this to say on Sep 25, 2007 Posts: 2220
  • “Pro pecuniam laborabum” (sic?).

    Trans, “Will work for money” (did I spell this properly?).

    Apple does have competition, actually. It’s called Windows/Microsoft. ;>)

    James Bain had this to say on Sep 25, 2007 Posts: 33
  • Speaking of competition, Amazon just rolled out its mp3 store.  DRM-free mp3 format.  89 cents.  $8.99 per album.  Will play on any player.  AND features an application that automatically adds the songs you purchase to iTunes.

    Now we’re cooking with grease!

    Beeblebrox had this to say on Sep 25, 2007 Posts: 2220
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