[Boondoggle]

There are no compelling patents here. There will be no lawsuit.

Watson is a nice program and I bought it.

Sherlock is pretty nice and I use it.

Armchair lawyers can argue about this crap all day, but Apple did not violate any intellectual property, there will be no (winning) lawsuit and the developer of Watson sure as hell did not have to be offered a job or mention on Apple's web site, which is how he ended up with my money anyway.

[Metzen]

Originally posted by Brazuca:
Apple DOES have a monopoly in the "mac market". I don't mean in the sale of Macs, I mean in the NON-PC market for hardware/software. You can't run windows (don't count VPC) on the mac. Only Mac OS (and linux). So, Apple has almost 100% of the mac market with its OS. Don't get that? Then go yell at someone else and take some more economics classes. Can you dispute that Apple has the final word on what works and what doesn't in its machines? If you don't like it you are SOL.

There are so many things wrong with this argument...

1)Your not referring to the mac market, your referring to the Mac OS market. Sorry to burst your bubble, but there is no "Mac Market". A "Mac" is a "PC" in the broader sense, and Apple does not have a monopoly on the PC market.

2)Besides, Apple, is the maker of said machine and said operating system can have them run on whatever damn well Apple wants them to run on. I don't see anything wrong with this. Sun does it too, and so does SGI with it's Irix machines.

3)Apple is not locking customers of there machines to use the MacOS.

Essentially, what your doing is nit-picking and drilling as low as you can go till you find that Apple has a monopoly. But, really, you can do that for anything, so the point is moot.

Originally posted by Brazuca:
In addition, if you don't care about what happens to OMNI, fine. I don't care what you care about. The issue was introduced as an illustration of the power that Apple has over software vendors. If Apple builds a browser into its OS that looks and behaves just like OW does, OMNI's browser will go the way of Netscape (but a lot worse). If you don't care, just shut up. The point is still valid regardless of what you care about.

Another irrational point. If Apple makes a brower that looks and behaves just like Omni's, then, economic's would have stated that that is the correct way to go. Why reinvent the wheel, right?

If Apple were to do this Omni would have to innovate to make there product more appealling than Apple's product. Lower price/being free, alone does not guarantee a better product.

Look at MS Office as an example. Tons of competitors, Corel, Sun, OpenOffice, AppleWorks, MSWorks, etc. and it's hugely expensive and still the most popular.

[Brazuca]

Originally posted by Developer:

Hey Developer, looks like I was right after all.

From MacNN:

Tex9 has been forced to change the name of xtunes, its open source iTunes project for Linux, at the request of Apple. The new application will be called sumi, and will sport an interface that does not resemble iTunes. "We received a letter from an attorney at Apple Computer stating that our xtunes software is guilty of copyright and trademark infringement. The copyright infringement has to do with the look-and-feel of the user interface and its similarity to Apple's iTunes product.

Apple won't let anyone imitate the look and feel of its apps, but it has no problem doing to others. Bully.

[Brazuca]

Originally posted by Metzen:


There are so many things wrong with this argument...

1)Your not referring to the mac market, your referring to the Mac OS market. Sorry to burst your bubble, but there is no "Mac Market". A "Mac" is a "PC" in the broader sense, and Apple does not have a monopoly on the PC market.

2)Besides, Apple, is the maker of said machine and said operating system can have them run on whatever damn well Apple wants them to run on. I don't see anything wrong with this. Sun does it too, and so does SGI with it's Irix machines.

3)Apple is not locking customers of there machines to use the MacOS.

Essentially, what your doing is nit-picking and drilling as low as you can go till you find that Apple has a monopoly. But, really, you can do that for anything, so the point is moot.



Another irrational point. If Apple makes a brower that looks and behaves just like Omni's, then, economic's would have stated that that is the correct way to go. Why reinvent the wheel, right?

If Apple were to do this Omni would have to innovate to make there product more appealling than Apple's product. Lower price/being free, alone does not guarantee a better product.

Look at MS Office as an example. Tons of competitors, Corel, Sun, OpenOffice, AppleWorks, MSWorks, etc. and it's hugely expensive and still the most popular.

And while I'm here reviving an old dinosaur, make sure you understand what we are talking about before you make sure ridiculous comments. Go back and learn about what a monopoly is, how is one defined. If you don't see that Apple has _absolutely_ monopoly power, then come back and I'll school you.

Don't confuse a monopoly with a juggernaut. And don't confuse monopolies with market failures/inefficiencies.

[Developer]

Originally posted by Brazuca:
Hey Developer, looks like I was right after all.

You were wrong at the time I posted the example.
Maybe someone of Apple was reading this thread?

ps:
By the way, I think Apple does them a favor by forcing them to change the interface.

[MacGorilla]

Originally posted by Developer:
You were wrong at the time I posted the example.
Maybe someone of Apple was reading this thread?

ps:
By the way, I think Apple does them a favor by forcing them to change the interface.

yes, that interface is butt a$$ ugly!

[Nonsuch]

Originally posted by Brazuca:

And while I'm here reviving an old dinosaur, make sure you understand what we are talking about before you make sure ridiculous comments. Go back and learn about what a monopoly is, how is one defined. If you don't see that Apple has _absolutely_ monopoly power, then come back and I'll school you.

Someone needs schooling all right.

Explain to me how Apple has a monopoly in personal computers. Remember: the fact that Macs and PCs are not directly compatible is irrelevant. Or do you maintain that Sony has "absolute monopoly power" in the Playstation market? I wouldn't try that one in Economics 101 unless you want to give the class a good laugh.

[Brazuca]

Originally posted by Developer:
You were wrong at the time I posted the example.
Maybe someone of Apple was reading this thread?

ps:
By the way, I think Apple does them a favor by forcing them to change the interface.

Heheh...true...


hmmmmmm...do you think we handed xTunes to Apple on a platter?

[Brazuca]

Originally posted by Nonsuch:


Someone needs schooling all right.

Explain to me how Apple has a monopoly in personal computers. Remember: the fact that Macs and PCs are not directly compatible is irrelevant. Or do you maintain that Sony has "absolute monopoly power" in the Playstation market? I wouldn't try that one in Economics 101 unless you want to give the class a good laugh.

You asked for it...
from "The MIT Dictionary of Modern Economics":

In the strictest sense, a firm is a monopoly if it is the only supplier of a HOMOGENEOUS product for which there are no substitutes and many buyers. But this extreme doesn't occur in real life and market structures lie between this and pure competition. In economics, the assumption of no substitutes is relaxed, as we realized that there are always options, however imperfect. We do, however, assume a relatively stable and predictable downward-sloping demand curve. In other words, the price elasticity of demand is known.


Oh, and if you still don't get it:

"monopoly power"
The ability of a firm or group of rims to influence the market price of the commodity or service it sells.

the conditions which may give rise to monopoly power (in varying degrees):
1) economies of scale (this is the example of your power company); "natural monopoly"
2) Product differentiation ("homogeneous goods")
3) Barriers to entry (putting potential entrants at a cost disadvantage to established firms)
4) patent rights
5) high transport costs


So, you may think that a monopoly is only that big ugly giant that destroys economies. The fact is that monopolies are everywhere. Sony does try to have one by making a system and certain games that only work on that system. The catch there is that there are some good substitutes to its PS2.

How about a little homework for you: Find out how many of the above conditions apply to Apple.

(hint: Apple does not have a natural monopoly)


riiiiiiiiiiiiing....that's the bell. School's out



[sorry for all the sarcasm, but I hate it when people treat their "common sense" as being fact]

[Silky Voice of The Gorn]

Originally posted by Brazuca:
Apple won't let anyone imitate the look and feel of its apps, but it has no problem doing to others. Bully.

Hey no one is stopping Dan Wood from suing Apple--oh wait, he has no case, since the UI of Watson is off-the-shelf Aqua elements, whereas iTunes is unique. Nevermind.

[Boondoggle]

Ford has a monopoly on Ford trucks. Every time I try to buy a motor for my Ford truck I find out only Ford makes it. Isn't that tricky?

Steven King has a monopoly on Steven King novels. Nobody else has ever written one, and nobody else ever will. Even after Steven King is dead, it is very unlikely that there will be any more Steven King novels.

I have a monopoly on writing checks from my checking account. Nobody else can do that.

Swatch has a monopoly on Swatch watches. Nobody else can make them at least not without permission.

Helmann's has a monopoly on Helmann's Mayonnaise. Nobody else can even compete in making Helmann's Mayonnaise, except "Best Foods" but that is the same company really, and it is called Best Food's Mayonnaise. Tastes the same though.


Yes, Apple has a monopoly on Apple hardware. Just like Ford, Swatch, Steven King, Helmann's and Me. Actually it isn't really a monopoly if you think about it but then again, thinking is hard. Feel better now? Maybe it is time to take a nap. Here is a binky and a blankie.






I HAD To add this:

"So, you may think that a monopoly is only that big ugly giant that destroys economies. The fact is that monopolies are everywhere. Sony does try to have one by making a system and certain games that only work on that system. The catch there is that there are some good substitutes to its PS2."


Just ask the PC user next door if there is a good substitute for Apple computers.... Yeah, that would be the substitute that 94% of computer buyers choose.

You know, it helps to think about what your argument is before you start typing away like a blithering idiot. I mean, unless it just comes naturally.

bd

[Brazuca]

Originally posted by Boondoggle:
Ford has a monopoly on Ford trucks. Every time I try to buy a motor for my Ford truck I find out only Ford makes it. Isn't that tricky?

Steven King has a monopoly on Steven King novels. Nobody else has ever written one, and nobody else ever will. Even after Steven King is dead, it is very unlikely that there will be any more Steven King novels.

I have a monopoly on writing checks from my checking account. Nobody else can do that.

Swatch has a monopoly on Swatch watches. Nobody else can make them at least not without permission.

Helmann's has a monopoly on Helmann's Mayonnaise. Nobody else can even compete in making Helmann's Mayonnaise, except "Best Foods" but that is the same company really, and it is called Best Food's Mayonnaise. Tastes the same though.


Yes, Apple has a monopoly on Apple hardware. Just like Ford, Swatch, Steven King, Helmann's and Me. Actually it isn't really a monopoly if you think about it but then again, thinking is hard. Feel better now? Maybe it is time to take a nap. Here is a binky and a blankie.






I HAD To add this:

"So, you may think that a monopoly is only that big ugly giant that destroys economies. The fact is that monopolies are everywhere. Sony does try to have one by making a system and certain games that only work on that system. The catch there is that there are some good substitutes to its PS2."


Just ask the PC user next door if there is a good substitute for Apple computers.... Yeah, that would be the substitute that 94% of computer buyers choose.

You know, it helps to think about what your argument is before you start typing away like a blithering idiot. I mean, unless it just comes naturally.

bd

Despite how idiotic you sound, most of the examples above are indeed monopolies. But if you stopped to read my post (or maybe it was just too dense for you), you'll see that the issue lies in the cost of entry and how good the substitutes are. Notice that I said that there are *always* substitutes. Read, my friend, it is good for you.

You can indeed buy PCs instead of Apple's. But the cost of switching is significant. And if you have an Apple, than you are at the mercy of Apple's monopoly power (again, read above). The point is, if you are in the mac market (all of us in MacNN are), the cost of the alternative is very high and Apple is now leveraging its monopoly power for very dubious reasons.

Remember that Microsoft was not found guilty for incorporating IE into Windows. It was found guilty because that action was an illegal use of its monopoly power.

Denial is an ugly thing, and as I said, it may sound ridiculous to you that everyone and their mother has a monopoly, but what do you think a patent is?

Now do you see that everything you said is wrong....and stupid???

[sambeau]

Originally posted by Brazuca:

Denial is an ugly thing, and as I said, it may sound ridiculous to you that everyone and their mother has a monopoly, but what do you think a patent is?

Now do you see that everything you said is wrong....and stupid???

A complete load of patronising piffle..

Just because a product is popular it doesn' make it a monopoly. If Ford tries to prevent you from buying any other make of exhaust pipe and fitting it to your car - then that is a abusing it's commercial clout. If it is the only serious car manufacturer - then it is.

A patent is not a monopoly. It is a legal right to exploit your invention for a while. It is not a legal right to quosh any competition. You cannot stop anyone else having a similar idea - just copying yours.

Apple have not abused their monopoly here. They allowed a competitor to compete fairly with one of their products. The competitor moved ahead. Apple stayed cool and worked to make the next move forward - and then the competitor complained.

This is nothing like what M$ has been up to.

Not even comparable.

[Adam Betts]

Originally posted by Brazuca:
Now do you see that everything you said is wrong....and stupid???

Do you want me to send you some fresh air via mail? It doesn't seem that your area have some

[noisefloor]

Originally posted by Brazuca:
If you don't see that Apple has _absolutely_ monopoly power, then come back and I'll school you.

That's the stupidest thing I've heard in a while.

Does McDonalds have a "monopoly" on Big Macs? Yes.

Does McDonalds have a monopoly on hamburgers? No.


"In the strictest sense, a firm is a monopoly if it is the only supplier of a HOMOGENEOUS product for which there are no substitutes and many buyers."

Is there a substitute for the Mac? Of course (although Mac users feel not a good one). Many buyers? Not compared to the windows market.

Thanks for the definition, making it clear that you are wrong. (And YOU have the nerve to tell people they sound idiotic? Amazing.)

[Brazuca]

It is clear that you people have no desire to understand things that you choose not to. Fine. I won't argue with you guys about the intricacies of monopolistic power and competition. If you want to get it, go take a class in Microeconomics. When you have a better grasp of market structures and firms I'll be glad to have an educated and open-minded discussion. This is a waste of time. You want to make up your own rationale and ignore definitions and facts, fine. Suit yourselves and continue in your delusions.

It is amazing that you will all say anything to pretend that Apple and the Mac market is a bed or roses. Even try to use statements that say the opposite of what you think and use them for your purposes. Intellectual dishonesty is rampant here, not to mention naivete....

[Brazuca]

Originally posted by noisefloor:


"In the strictest sense, a firm is a monopoly if it is the only supplier of a HOMOGENEOUS product for which there are no substitutes and many buyers."

Oh, I just have to say this:

Why don't you finish reading that paragraph?

[noisefloor]

"It is amazing that you will all say anything to pretend that Apple and the Mac market is a bed or roses."

Just for the record, we're not "all saying" anything. (note the thousands of posts on this forum complaining about apple) A few of us ARE disagreeing with your notion that Apple is a monopoly. (sure it is if you take the attitude that EVERY company selling something is a monopoly...)


"When you have a better grasp of market structures and firms I'll be glad to have an educated and open-minded discussion. This is a waste of time."

I hope this means you're going to shut up and go away?

[Brazuca]

Originally posted by noisefloor:
"It is amazing that you will all say anything to pretend that Apple and the Mac market is a bed or roses."

Just for the record, we're not "all saying" anything. (note the thousands of posts on this forum complaining about apple) A few of us ARE disagreeing with your notion that Apple is a monopoly. (sure it is if you take the attitude that EVERY company selling something is a monopoly...)


"When you have a better grasp of market structures and firms I'll be glad to have an educated and open-minded discussion. This is a waste of time."

I hope this means you're going to shut up and go away?

Noise,

I gave the definitions for monopoly and monopoly power as they are used in real life, whether as a theoretical economist or in a courtroom. Then I linked that definition to Apple's market structure. So far no one has denied either the definition or how they apply in reality. They have all just ignored them and opted to use their "common sense" and "good ideas". Typical traps. And I'm not taking any attitudes. I used a definition from the most respected economics dictionary published, but somehow that is irrelevant to everyone else. I have the image of a SNL skit: "lalalallalalla".

If you find that I became sarcastic and patronizing is because some of those who posted opted to attack my intelligence rather than try to understand and rebut my points. I'll be the last to start a fight, but I'll also be the last to leave one. I just won't continue a discussion with the ignorant and close-minded simpletons with a pathetic inability to listen and understand.

And about me going away, no. You wish you could shout me away. I just don't respect your intelligence enough to answer your points regarding the topic at hand.

[noisefloor]

"I'm not taking any attitudes."

"II just won't continue a discussion with the ignorant and close-minded simpletons with a pathetic inability to listen and understand."

Reread those two statements.

And think about why nobody is taking your arguments seriously.

[Brazuca]

Originally posted by noisefloor:
"I'm not taking any attitudes."

"II just won't continue a discussion with the ignorant and close-minded simpletons with a pathetic inability to listen and understand."

Reread those two statements.

And think about why nobody is taking your arguments seriously.

you amaze me at every turn with your simple minded "thoughts". silly boy....

[noisefloor]

"I'm not taking any attitudes."

"II just won't continue a discussion with the ignorant and close-minded simpletons with a pathetic inability to listen and understand."

Reread those two statements.

And think about why nobody is taking your arguments seriously.

[Nonsuch]

So, you may think that a monopoly is only that big ugly giant that destroys economies. The fact is that monopolies are everywhere. Sony does try to have one by making a system and certain games that only work on that system. The catch there is that there are some good substitutes to its PS2.

Kindly explain how this exception applies to Sony but not to Apple, when the PlayStation and the Macintosh are almost perfectly analogous products (ie, they are products made by a single company in their industry (console games and personal computers respectively) that are not fungible with competing products). Or are you seriously claiming that there are no "good substitutes" for the Macintosh? Meaning that if Apple went out of business you would stop using computers, because Windows PCs simply cannot do what you need them to?

This discussion doesn't even seem to be about whether Apple has a "monopoly" on the Mac, since we all know only Apple makes them. The question is: does the "Mac market" really constitute a market unto itself, or is the Mac merely one competing product in the personal computer market, a product that differentiates itself by being incompatible with competing products?

[Brazuca]

Originally posted by Nonsuch:


Kindly explain how this exception applies to Sony but not to Apple, when the PlayStation and the Macintosh are almost perfectly analogous products (ie, they are products made by a single company in their industry (console games and personal computers respectively) that are not fungible with competing products). Or are you seriously claiming that there are no "good substitutes" for the Macintosh? Meaning that if Apple went out of business you would stop using computers, because Windows PCs simply cannot do what you need them to?

This discussion doesn't even seem to be about whether Apple has a "monopoly" on the Mac, since we all know only Apple makes them. The question is: does the "Mac market" really constitute a market unto itself, or is the Mac merely one competing product in the personal computer market, a product that differentiates itself by being incompatible with competing products?

The question that defines a monopoly "de facto" is on the availability of substitutes (among others). The argument is not whether a company creates a unique product, but rather on how easily customers can go between that unique product and another. So it all becomes a matter of degree. Monopolies are not bad in and of themselves. They are only bad when they are excessive.

The argument that Apple indeed has a monopoly is trivial. Actually this only became an issue to some who think that Apple does not have one.

But the real interesting question, and my contention, is that Apple's monopoly power is far greater than most want to accept. The reason for this is that, to a mac user, a pc is not a good substitute. I think we can agree that the loyalty of the mac user is significant, and that if you chose a Mac then it is unlikely that you will accept a PC instead.

Given that, if you are in this "Mac market", Apple does have monopoly power. This is not earth shattering, nor should it be a surprise. Many companies have this and it is usually not a bad thing. This thread started a debate on Apple's actions as they relate to a small developer. Some, like myself, found these actions to be excessive (though perfectly legal). I brought up the point that Apple's market power give it an advantage, especially over small developers. This is analogous to what we all have complained about regarding Microsoft's tactics.

Comparing Sony, McDonalds, etc to Apple is fine. What is important to understand is that every industry is different. Companies must be analyzed in terms of their context and the relevant standard is weather a firm can exercise their market power effectively. And make no mistake about it: every firm would love to have a monopoly. It's the american business dream.

It is sad that people like to equate the term "monopoly" with evil. According to them: If "Monopoly" = "evil" and "Apple" /= "evil" , then "Apple" /= "monopoly".

The irony is that Apple is finally acting like a real business. They are leveraging their market power to increase profits. The only problem is that we don't usually think of Apple belonging to that group of firms. We like to think they are above that. I just don't think they are taking the high road anymore.

[noisefloor]

"The argument is not whether a company creates a unique product, but rather on how easily customers can go between that unique product and another. So it all becomes a matter of degree."

So as you've made perfectly obvious, you can "argue" that ANY product is a monopoly. To a degree.

"The reason for this is that, to a mac user, a pc is not a good substitute."

You aren't making an argument, you're just stating your opinion. "Good subsitute" isn't a quantifiable thing, it's just an opinion. To a die hard Coke drinker, a Pepsi is not a good substitute. By your "logic", again ANY product can be declared a monopoly.

"I think we can agree that the loyalty of the mac user is significant, and that if you chose a Mac then it is unlikely that you will accept a PC instead."

I imagine many Mac users would consider a PC a good substitute. They wouldn't be happy about it, but if a Mac isn't available, the vast majority would use a PC over a typewriter. Trying to paint all Mac users as mindless drones doesn't help your arguement any. Fact is, many people switch (both ways) and use both platforms every day.


"Given that, if you are in this "Mac market", Apple does have monopoly power."

Given that, if you are in this "Coke market", Coke Inc. does have monopoly power.

Given that, if you are in this "XYZ market", XYZ Inc. does have monopoly power.

If your "argument" can be applied to ANY company and ANY product, how can it possibly be relevant?

[kmkkid]

Avoiding any flamming, Apple does kind of have a monopoly, but not as big as MS. Any Company that has complete (or almost complete) control over what goes on with their product and market is a monopoly. Apple is sort of the "bully" of the PPC market just as MS is the "bully" of the PC market.... it's all relative. But one could also compare the PC and PPC as equals (in the personal computer market) And then say MS is the monopoly because they wont allow Windows to be ran on the PPC. Sure Apple wont allow the Mac OS to be run on the PC, BUT the difference there is in the size and power of the companies. Apple is very small compared to MS therefore the bigger company has the monopoly, as they always have.

Chris

[Zimphire]

Apple has no monopoly on any tech market. MS does to a point. If you call 97% a monopoly.

[Brazuca]

Originally posted by kmkkid:
Avoiding any flamming, Apple does kind of have a monopoly, but not as big as MS. Any Company that has complete (or almost complete) control over what goes on with their product and market is a monopoly. Apple is sort of the "bully" of the PPC market just as MS is the "bully" of the PC market.... it's all relative. But one could also compare the PC and PPC as equals (in the personal computer market) And then say MS is the monopoly because they wont allow Windows to be ran on the PPC. Sure Apple wont allow the Mac OS to be run on the PC, BUT the difference there is in the size and power of the companies. Apple is very small compared to MS therefore the bigger company has the monopoly, as they always have.

Chris

Yes, kmkkid. You get it. Monopolies are all relative. The same goes for Microsoft since there is a bigger market for electronics in which it controls just a minute portion. The question is one of context, of a "relevant market". The issue of "monopoly power" has to do with how easy one's customers can switch away from one firm's monopoly and into another's. We in economics measure this as the "elasticity of substitution".

Whether Microsoft's monopoly power is greater than Apple's or not, it would depend on their respective customers. Switching platforms is not trivial unless you already have significant investments in terms of software, hardware, and time in both. A Mac user would have to spend a lot of time and money learning a PC in order to get the same productivity. The same for a PC, though the degree may be different given the Mac's "ease of use". I, for example, would find it very hard to do the work that I do with a PC. The time and effort it would take me to switch and get everything working to the point where I am just as productive are significant enough to keep me solidly with my Mac. I won't even consider a PC based on this. So, how much higher would Apple prices have to be for me to buy a PC instead of a Mac? Pretty high. You can see this in the price differential between Macs and PCs, however the iMac may indeed be vulnerable to a price war given its target market.

So, if we agree that substituting between Macs and PCs is not trivial (I am arguing that it is actually very difficult for a Mac user to go to a PC), we can then begin to talk about how Apple can leverage this monopoly power in this market of Mac users.

But if you think that the average Mac user has no qualms about switching then you would be correct in believing that Apple has absolutely no market power. The problem is that the facts don't seem to support this. Apple's price elasticity of substitution is very low (in other words, if Apple raises its price by 1%, quantity demanded for substitutes will increase by much less than 1%). Also, the regular price elasticity of demand is very low (meaning that a 1% increase in prices by Apple will decrease quantity demanded by much less than 1%). Both necessarily imply that Apple can control the market.

We can argue these facts since they are generalizations on my part based on my (limited) knowledge of the business details that Apple faces. But I would suggest that it is acceptable to consider the "Mac Loyalty" as a real characteristic of the market and that Apple understands this.

[Brazuca]

oopsy

[Boondoggle]

The bottom line is that you can contrive to describe anything as a monopoly if you are willing to ignore common sense when selecting the market in which the company of interest participates. This was the not very subtle point of my post about Ford and Helmann�s Mayonnaise. Frivolous and idiotic definitions of markets lead to all sorts of absurd monopolies. Pardon me for assuming this was a serious discussion and that not very subtle points would be clearly missed.

The �Mac Market� is an intellectual construct. As it is a very small part of the very real PC market, it is not a valid market in which to discuss monopolies. You correctly state that monopolies do not have to be big companies, but the do have to dominate in their real market. Sadly, Apple does not dominate in the PC market, any more than Ford dominates in the car market. Infact, probably less. Ford is at no risk of becoming a monopoly any time soon in the car market. Saying that �Ford dominates the market for Ford cars� is as ridiculous as it sounds, and it sounds just like �Apple dominates the Mac market.�

Lets examine your �argument� point by point. Copied from an MIT text:

"monopoly power"
The ability of a firm or group of rims to influence the market price of the commodity or service it sells.

the conditions which may give rise to monopoly power (in varying degrees):
1) economies of scale (this is the example of your power company); "natural monopoly"
2) Product differentiation ("homogeneous goods")
3) Barriers to entry (putting potential entrants at a cost disadvantage to established firms)
4) patent rights
5) high transport costs

1 is clearly irrelevant in a discussion of Apple, hovering just under 4% market share. Dell is at risk of becoming a monopoly however and this is how they would do it.
2 The PC market does not have homogeneous goods if you include Apple. Even if you don�t, there are enough differences in the hardware at least to prevent a box maker from establishing a monopoly.
3 Irrelevant There are already cheaper alternatives
4 Irrelevant There is no patent on the concept of a PC
5 Irrelevant Just plain irrelevant

You can indeed buy PCs instead of Apple's. But the cost of switching is significant. And if you have an Apple, than you are at the mercy of Apple's monopoly power (again, read above). The point is, if you are in the mac market (all of us in MacNN are), the cost of the alternative is very high and Apple is now leveraging its monopoly power for very dubious reasons.

You claim that the cost of switching is significant. Well there are a lot of us here, who are happy to buy Apple products who would argue that the cost of NOT switching is pretty damned significant.

Further, if a buyer is willing to wait until his next upgrade cycle to switch, the cost drops DRAMATICALLY. We all have to upgrade our stuff eventually, including the software. This is no different from a dissatisfied Ford buyer who can easily switch to Chevy when he can afford a new car. Doesn�t mean he can afford to throw away the Ford and just go buy a Chevy on a whim. THAT gets expensive. And clearly this does not mean that Ford has a monopoly on anything. Again, we run afoul of the mythical Mac Market.

Remember that Microsoft was not found guilty for incorporating IE into Windows. It was found guilty because that action was an illegal use of its monopoly power.

I remember. I also remember that Microsoft, with approximately 95% of the desktop operating system market, was able to essentially kill Netscape. What was Netscape going to do, go out and conquer the Linux market instead? In the case of Watson, which started this debate, it is clear that there is no risk of Karelia going out of business if it is willing to move Watson to windows. In fact, they potentially could make much more money on Windows as it is a more significant market in terms of numbers. So this point is clearly not valid in this argument. Sorry. Because the Mac market is a subset of the PC market, there is no long-term threat to Karelia. If Microsoft decides to copy Watson, that is a different matter, as Microsoft actually comes close to wielding true monopoly power in a valid market, the PC Operating system Market.

Damage control:

I gave the definitions for monopoly and monopoly power as they are used in real life, whether as a theoretical economist or in a courtroom. Then I linked that definition to Apple's market structure. So far no one has denied either the definition or how they apply in reality. They have all just ignored them and opted to use their "common sense" and "good ideas". Typical traps. And I'm not taking any attitudes. I used a definition from the most respected economics dictionary published, but somehow that is irrelevant to everyone else. I have the image of a SNL skit: "lalalallalalla".

No you didn�t. You copied and pasted some defs out of an economics text. You in no way linked any of the above definitions to Apple. Maybe you think you did, but I�ve read it all carefully, and you did not. You left it to others to figure out, which is of course impossible for anyone trying to be fair. Please see:

How about a little homework for you: Find out how many of the above conditions apply to Apple.

Here are a few funny lines taken from your rebuttal to my last post:

Despite how idiotic you sound, most of the examples above are indeed monopolies.
Now do you see that everything you said is wrong....and stupid???

Now which is it? Was I idiotically right, or stupidly wrong? I�m just dying to know�

And of course the dodged comparison with Sony:

So, you may think that a monopoly is only that big ugly giant that destroys economies. The fact is that monopolies are everywhere. Sony does try to have one by making a system and certain games that only work on that system. The catch there is that there are some good substitutes to its PS2.

Comparing Sony, McDonalds, etc to Apple is fine. What is important to understand is that every industry is different. Companies must be analyzed in terms of their context and the relevant standard is weather a firm can exercise their market power effectively. And make no mistake about it: every firm would love to have a monopoly. It's the american business dream.

The argument that Apple indeed has a monopoly is trivial. Actually this only became an issue to some who think that Apple does not have one.

So here we see the depth of your argument. Irrelevant gibberish followed by a weak retraction. You are in serious need of critical thinking skills my friend. While some of your statements are correct, they don't have any bearing on a rational discussion of an Apple monopoly. And your decision to chose the �Mac Market� a reasonable and credible subject for analysis with respect to monopolies is by your own admission, trivial.

Good night and good riddance.

[Metzen]

Boondoggle, excellent post.

[Brazuca]

yeah boondogle, excelent post. Except that it is a house of cards.

Why do you think that Apple's relevant market is the entire PC market? Every market is part of a larger one until you get to the root market. The idea of a relevant market has to do with these divisions. You may chose to ignore the fact that divisions do exist, but that won't make them go away.

The fact that there is little substitutability between Macs and PCs (note the constant market shares) means that the divisions are very profound. If you own a mac, you are at the mercy of the only player in town. And its not a trivial matter for that player to flex its muscle.

The .mac pricing scheme got a lot, I mean *a lot* of complaints. How many do you think switched?

Why is this so hard to understand? What Apple does may have negligible affect on the PC world, but it defines the Mac world. This is where they have the power.

To put it another way, a local gang here in the Bronx may control the entire neighborhood, but they are have no clout in the country as a whole and even less in the world. Would you say that they have no power?

the answer: it depends on its "relevant market". In this neighborhood they can do whatever they want because people won't move easily.

Stop trying to define Apple relevant market to the PC world only. Open your mind a little, just a little.

[Brazuca]

I guess you are looking to get slapped again.

Economies of scale. That is obvious that Apple doesn't have. What's your point? This is a definition of the entire concept of Monopoly. trivial [slap!]

Err, homogeneous goods. Does Apple have a unique product in its PowerPC and MacOSX? Thats what homogeneous means. [slap!]

barriers to entry: err, can you build a Mac? no. How much do you think it costs for a competitor to make an OS comparable to Apple's that runs well on Apple's hardware. Very. [double slap!]

patent rights: again it is part of a complete definition. Patents are forms of monopolies [slap!]

high transportation costs: again part of the definition. trivial [slap!]


So, now your face is all red, but lets make your lip swollen, shall we?
You say that us Mac users find the cost of not switching very high, yet somehow we choose to pay them. Guess why? (wait for it BECAUSE THE COST OF SWITCHING IS EVEN HIGHER!! [slap!] (ouch, that one hurt my hand)

Oh, and don't forget that the cost of something includes training, time lost in training, etc as well as the out of pocket expenses. So the cost is still significant unless you already have an investment in both platforms. [not a slap, just a threat for you to wince]

About Watson: You mean to tell me that Netscape is dead? According to your point they could have gone to make blenders! How idiotic can you possibly be. Note that Netscape is still making browsers and still in business. The point is that Microsoft used their monopoly position in an illegal way to undermine Netscape. [slap!]

Just because Watson can be ported to Windows doesn't mean someone can force it to. Apple's actions took Watson out of contention in the mac market, much like Netscape was taken out of contention in the PC market (note the different "relevant markets" here) [slap!]

About my "linking the definitions" that I "copied and pasted". First I actually own that book, so no copy/past there. Some of us don't rely on Google searches for everything, you know. And I can quote most of that dictionary from memory. Being a doctorate candidate in the field kinda does that to you. Oh, and if you read the other posts where I explicitly connected the market structures with the definitions you would have enough to slap yourself. [slap!]

You still sound idiotic with your vain attempts at using "common sense". But even idiots sometimes stumble on some right points. So the answer to your question is that you are both an idiot and clueless. [slap!]

The Sony comparison:
Again you show you poor comprehension skills. Maybe the discussion went too fast for you. You should have raised your hand and asked to go to the bathroom so you would have an excuse.

Sony's situation has both similarities and differences to Apple's. To try to have it exemplify and describe the situation we are discussing without recognizing that is ridiculous. So I tried to shed some light on the subject as a response to a question on this precise point. Maybe the fact that someone would calmly explain things through a logical train of thought is alien to you. When you feel that this is happening, just shut up and try not to look to dumb. [slap!]

So now that your eye is swollen, nose broken, lip bleeding, and your face being all red both from the shame of your stupidity and my hand spanking it, you should try to stop crying and understand this:

The fact that Apple has a monopoly is trivial. A lot of people have one. The fact that Apple used its market strength in pushing its competitor away should be neither a surprise nor applauded.

You talk about critical thinking skills, but somehow you missed this point. read it carefully please so I don't have to hurt you again.

Oh.... [slap!]

[JLL]

Originally posted by Brazuca:
Being a doctorate candidate in the field kinda does that to you

If being a doctorate candidate means that you have to be an ass in every post I'm happy that I'm not one.

[Boondoggle]

Hoo boy, don't mortgage the house based on getting that Ph.D any time soon...

I suggest you print out the entire text of this thread and take it to your research leader for an opinion.

Why do you think that Apple's relevant market is the entire PC market? Every market is part of a larger one until you get to the root market. The idea of a relevant market has to do with these divisions. You may chose to ignore the fact that divisions do exist, but that won't make them go away.

Why do you think Apple is running a Switch advertising campaign? Why do you think Gateway is running ads comparing their products to the iMac? Hello? Is there a light on in there??? A Personal computer is a widget that Apple makes. Other companies make them too.

The fact that there is little substitutability between Macs and PCs (note the constant market shares) means that the divisions are very profound. If you own a mac, you are at the mercy of the only player in town. And its not a trivial matter for that player to flex its muscle.

This is an opinion. The fact that Apple's share of the overall PC market has gone from something like 30% to just over 3% would indicate that substitutability existed for those customers who left the Mac in droves since the introduction of Windows 95. Also, Apple's customer base, although at roughly 3% of the overall PC market has been fixed for a while, this does not mean it is always the same people. There are people switching both ways all the time. The customer base is in flux, even if the raw numbers remain relatively constant.

The .mac pricing scheme got a lot, I mean *a lot* of complaints. How many do you think switched?

Here we see an attempt to confuse the issue. Do you mean switch platforms, or switch email providers? Many Apple customers were not iTools subscribers. Of the subset that were, many would choose to pay $100 for the service. There are alternatives however, that do not require switching to PC's. This is not a valid point in this discussion.

the answer: it depends on its "relevant market". In this neighborhood they can do whatever they want because people won't move easily.

This is your thesis statement and it is incorrect. Dissatisfied customers might not switch immediately, depending on when they last invested in Apple hardware, but believe me, when it is time to upgrade anyway, the price of buying a PC is not going to be a significant barrier to a dissatisfied customer. And the "difficulty" issue is a personal one and subjective. If it would be hard for you to switch that is your business. Don't project that handicap on the rest of Apple's customers.

Err, homogeneous goods. Does Apple have a unique product in its PowerPC and MacOSX? Thats what homogeneous means. [slap!]

Apple does not make the PPC and it is not even the largest customer for PPC chips. MacOSX is not unique in that it is a desktop operating system. I can think of at least one other... It is a brand of operating system much like Ford is a brand of car. There are differences between OS's and differences between cars.

Here again you are assuming that the Mac market is in a vacuum and valid for discussion in terms of monopolies. Still wrong.

About Watson: You mean to tell me that Netscape is dead? According to your point they could have gone to make blenders! How idiotic can you possibly be. Note that Netscape is still making browsers and still in business. The point is that Microsoft used their monopoly position in an illegal way to undermine Netscape. [slap!]

Netscape now enjoys less than 10% market share for browsers. That is down from about 99%. They would be dead if AOL had not picked up the tab. You tell me. My point was that there was no alternate or larger market for them to move the product to, because they were already in the larger market. They would not have much luck selling Navigator as a blender now would they? Karelia is not in this predicament, because they can easily modify Watson to sell in the PC market at large by porting it to windows. I doubt that the other viewers of this thread missed this point, PhD candidates or not.

Just because Watson can be ported to Windows doesn't mean someone can force it to. Apple's actions took Watson out of contention in the mac market, much like Netscape was taken out of contention in the PC market (note the different "relevant markets" here) [slap!]

Uh... no. Imagine a company makes lights that plug in to car cigarette lighters. They designed the light to overcome a flaw in Ford's interior lighting that made it impossible to see into a small shelf under the dashboard. Imagine Ford fixes the flaw, or includes their own light in a revised product. Can the company change their product and sell it to the auto market at large? Sure. Is this an example of Ford wielding monopoly powers? No. If Ford had a monopoly on automobiles it might be. As you have alluded to, the rules change if a company is a monopoly. Ford is not a monopoly. The same CLEARLY goes for Apple in their market.

Here is all that you have had to say about Sony, in chronological order. Thanks a bunch for the clear analysis:

So, you may think that a monopoly is only that big ugly giant that destroys economies. The fact is that monopolies are everywhere. Sony does try to have one by making a system and certain games that only work on that system. The catch there is that there are some good substitutes to its PS2.

Same catch applies to Apple.

Comparing Sony, McDonalds, etc to Apple is fine. What is important to understand is that every industry is different. Companies must be analyzed in terms of their context and the relevant standard is weather a firm can exercise their market power effectively. And make no mistake about it: every firm would love to have a monopoly. It's the american business dream.

Thanks that was helpful.

Sony's situation has both similarities and differences to Apple's. To try to have it exemplify and describe the situation we are discussing without recognizing that is ridiculous. So I tried to shed some light on the subject as a response to a question on this precise point. Maybe the fact that someone would calmly explain things through a logical train of thought is alien to you. When you feel that this is happening, just shut up and try not to look to dumb. [slap!]

With this kind of light being shed on the subject, I can see I'll need to buy my own flashlight.

Thanks again.

Since you are still in school we can't really send you back. Come and see us when you finally get that Ph.D.

[noisefloor]

Great post, boondoggle.

Originally posted by Brazuca:

You may chose to ignore the fact that divisions do exist, but that won't make them go away.

Or you can make imaginary divisions that don't exist. You still keep ignoring the fact that you make it possible to see EVERY product/company as a monopoly.

The fact that there is little substitutability between Macs and PCs (note the constant market shares) means that the divisions are very profound.

Here's where your "argument" completely falls apart. Market shares don't show us anything about substitutability. Most computer users could switch to the other platform and still do everything they're doing today. "Substitutability" is just a matter of opinion, you can insist "little substitutability" exists for ANY product if you're picky enough.

"What Apple does may have negligible affect on the PC world".

Not true. At the very least, if Apple screws up enough, Mac users WILL switch, which adds to the PC market. Although it's been stable recently, Apple's market share HAS changed drastically over the last fifteen years.

" You say that us Mac users find the cost of not switching very high, yet somehow we choose to pay them. Guess why? (wait for it BECAUSE THE COST OF SWITCHING IS EVEN HIGHER!! "

Let's look at an example to see why you're wrong: You have a beige G3 and you're due for a new mac. A new top of the line Mac will cost you at least $3000. A comparable PC will cost $1500 (and I'm being incredibly conservative here, you can probably get one for far less). You can likely keep many if not all of your peripherals. So assuming your costs for software are less than $1500, it's CHEAPER to SWITCH. Since much software offers reasonable crossgrades, and many people only use basic apps (many of which are now included with a computer), this will be the case for many people. And sure, let's throw in the cost of "retraining": many apps are cross platform, so none needed there. For the OS itself, the finder is mostly a ripoff of the macos anyway, I assume the average doctoral student can figure it out without much difficulty.

Sure, if you have expensive apps that don't offer a crossgrade, it can cost more to switch, but many people would SAVE money by switching. You seem to think that people stick with the Mac because Apple has a gun to their head - in fact, people stay because they like it and they don't want to switch. Imagine that.

Oh, and if you read the other posts where I explicitly connected the market structures with the definitions you would have enough to slap yourself.

Funny, nobody on this thread seems to be able to find those. Could you point them out? Thanks.

The Sony comparison:
Again you show you poor comprehension skills. Maybe the discussion went too fast for you. You should have raised your hand and asked to go to the bathroom so you would have an excuse.

Sony's situation has both similarities and differences to Apple's. To try to have it exemplify and describe the situation we are discussing without recognizing that is ridiculous. So I tried to shed some light on the subject as a response to a question on this precise point. Maybe the fact that someone would calmly explain things through a logical train of thought is alien to you. When you feel that this is happening, just shut up and try not to look to dumb..

Sorry to quote such a long passage, but I'd like to point out that you insist that boondoggle is wrong, yet don't give a SINGLE reason why. I wonder who's right, the guy who makes a logical argument, or the guy who desperately resorts to sandbox insults?

[Brazuca]

Originally posted by noisefloor:
Sure, if you have expensive apps that don't offer a crossgrade, it can cost more to switch, but many people would SAVE money by switching. You seem to think that people stick with the Mac because Apple has a gun to their head - in fact, people stay because they like it and they don't want to switch. Imagine that.

errr...thats the point. Why don't people switch? Because it could "cost" more to do so given their tastes and preferences. Hellooo?? Don't you get this point? There is a "loyalty" factor which has to be taken into consideration here. Despite how cheap it would be to switch (according to your calculations), there are hidden "costs". You are saying exactly what I am saying.


And JLL: Don't be an idiot. Go back and read the thread (specifically Metzen's post above where the tone started to be set with "irrational point"). Where you see me the discussion turning into this childish name calling was when some ******* decided that my point was simply "irrational". Until then I was simply voicing my opinion, raising questions, and yes, when I was wrong even admitting this (what a novelty here). Then some jerk comes along and decides to inform me of my ignorance. Like I said, I don't start these things but I won't back off either just because some people don't like what I'm saying.

Where was you righteousness in light of all the other insulting posts? But I guess its nice to be in the peanut gallery.

So before you try to come off being superior to the discussion and pretend to know what's going on, read up on it. If you are to lazy to do it, shut the hell up.


oh, another point on monopolies: The iMac has to compete in price. The rest of the line doesn't. Guess why?

It is possible to have monopolies in all kinds of levels. This is exactly what defines a firms monopoly leverage. Do you believe that Microsoft actually had a compelling argument stating that it in fact did not have a monopoly?

And remember, all PCs are subcategories of a larger market: electronics. These in turn are subsets of "manufactured goods". Why do you think we should draw the line only at the PC level? Because you say so? I provided a rationale for "relevant markets". Now you are calling it arbitrary (err..."relevant" is arbitrary?) so you opt to draw the line in the "PC market". Why is that not arbitrary.

Look. The economics of this are obvious. But you don't stop to think about it and seriously consider it, you won't get it. Ever. Frankly, I don't care. But to try to tell me that I'm ignorant without the ability to defend your position is idiotic.

So, flame on.

[JLL]

Originally posted by Brazuca:


errr...thats the point. Why don't people switch? Because it could "cost" more to do so given their tastes and preferences. Hellooo?? Don't you get this point? There is a "loyalty" factor which has to be taken into consideration here. Despite how cheap it would be to switch (according to your calculations), there are hidden "costs". You are saying exactly what I am saying.

Oh, Apple is a monopoly because people like their products?

Originally posted by Brazuca:
And JLL: Don't be an idiot. Go back and read the thread (specifically Metzen's post above where the tone started to be set with "irrational point"). Where you see me the discussion turning into this childish name calling was when some ******* decided that my point was simply "irrational". Until then I was simply voicing my opinion, raising questions, and yes, when I was wrong even admitting this (what a novelty here). Then some jerk comes along and decides to inform me of my ignorance.

That just shows how immature you are - calling people idiots, stupid and jerks just because they said you were irrational

Originally posted by Brazuca:
Where was you righteousness in light of all the other insulting posts? But I guess its nice to be in the peanut gallery.

You're probably the only one in this forum with a fuse so short that you have to call people names because they say that your point is irrational.

Originally posted by Brazuca:
So before you try to come off being superior to the discussion and pretend to know what's going on, read up on it. If you are to lazy to do it, shut the hell up.

Just because I didn't post on the first page it means that I haven't read the thread?

[noisefloor]

Originally posted by Brazuca:

"Why don't people switch? Because it could "cost" more to do so given their tastes and preferences. Hellooo?? Don't you get this point?"

So now your "argument" is stretched to the point where you're defining "costs more" as "I like it better"? Maybe you should read that MIT definition again, you're drifting pretty far afield. And just for the record, people DO switch. Even when it "costs" more.

AGAIN: By your same "logic", Coke "costs more" to someone who likes it. Therefore Coke has a "monopoly" because it's too "expensive" to switch to Pepsi. AGAIN, you ignore that your "definition" of a monopoly allows ANY and EVERY product to be defined as a monopoly, if you feel like it. But I'm sure you'll ignore this point yet again.

"so you opt to draw the line in the "PC market". Why is that not arbitrary."

Let's see...a PC can do 99% of the things a Mac can do. No other product in the "electronics market" can even do a fraction of what either a PC or Mac can. What exactly is wrong with "drawing the line" to include two products that have 99% overlapping functionality?

I need a box that will let me do word processing, surf the 'net, and run Photoshop. What exactly puts me in the Mac Market instead of the Home Computer Market?

[Adam Betts]

Originally posted by Brazuca:
[slap!] (ouch, that one hurt my hand)

Are you fag? If so, I'll understand

[Brazuca]

JLL:

Ok. So you say you read the thread. You'll notice that for the first two pages of it I've been voicing my opinion on the various points. You'll also see that I've always had respect for other views and I always listen and consider them. I also concede that I am wrong when someone makes a valid point.

Even on this page you'll see someone's questions about my point, which I tried to answer.

Given that we were all having a nice discussions between interested people, why did someone have to come here and insult me? You may think that I had no right to defend myself, but I don't. Also take a look up on this page: You'll see that my only answer to the "irrational" comment was to take a slightly patronizing tone. But then some people decided to insult me further. Hey, I'm not a pushover.

About your monopoly comment. I've tried to explain above that what constitutes a monopoly are the five points I described. Here the measure is the "cost". The reason I put it into quotes is because I didn't want to have to explain the concept of the Opportunity Cost, which is exactly how things are measured.

When your customers like your product so much that they are not willing to consider alternatives (except for extreme conditions) does indeed mean that your firm has a power over them. They have leverage. This is what I tried to describe in the part about Monopoly Power (right after the 5 points). The "cost" of switching includes this more obscure Opportunity Cost; when you switch you would be giving up one product for the other. The Opportunity Cost of something is the value of its next best alternative. By switching to a PC you give up a Mac, which we all agree is very valuable. This is why people pay more for macs and still stick with them. The Opportunity cost of switching is higher than the Opportunity Cost of not switching.

When it comes to drawing the line: I have stated above that when it comes to the iMac, Apple doesn't really have much choice in the pricing scheme. The consumers who it is targeted for will do mostly web surfing, word processing, etc. Here Apple has no monopoly power and you can see this in the price wars.

But in the rest of the Mac market, the hardware is targeted to those who use Macs for all the reasons that they are different than PCs. If this wasn't the case you and I wouldn't buy Macs since a 1% difference hardly justifies paying over twice as much. So we recognize that there is a compelling difference between Macs and PCs. Apple realizes this and they can use this in their pricing scheme. This is why they can set the price for their OS and people will buy it. They can charge a lot for technology that is 1yr old (PMs) and people will buy them. This is the very definition of having Monopoly Power (again I refer you to the MIT definition).

This would be great if we could stop all the personal attacks....

[mrmister]

Brazuca said:

"This would be great if we could stop all the personal attacks...."

Coming from you, that's pretty funny.

[Nonsuch]

Originally posted by noisefloor:
"so you opt to draw the line in the "PC market". Why is that not arbitrary."

Let's see...a PC can do 99% of the things a Mac can do. No other product in the "electronics market" can even do a fraction of what either a PC or Mac can. What exactly is wrong with "drawing the line" to include two products that have 99% overlapping functionality?

I need a box that will let me do word processing, surf the 'net, and run Photoshop. What exactly puts me in the Mac Market instead of the Home Computer Market?

Nicely and accurately put. Brazuca, you're reaching; you want to be careful you don't pull a muscle.

When it comes to drawing the line: I have stated above that when it comes to the iMac, Apple doesn't really have much choice in the pricing scheme. The consumers who it is targeted for will do mostly web surfing, word processing, etc. Here Apple has no monopoly power and you can see this in the price wars.

Didn't stop 'em from raising the price back in February, did it?

But in the rest of the Mac market, the hardware is targeted to those who use Macs for all the reasons that they are different than PCs. If this wasn't the case you and I wouldn't buy Macs since a 1% difference hardly justifies paying over twice as much. So we recognize that there is a compelling difference between Macs and PCs. Apple realizes this and they can use this in their pricing scheme.

Completely specious. For one thing, just because someone is using an iMac doesn't make them an ignoramus. I'm reasonably sure those who choose to buy an i- or eMac are aware they're not getting a PC and find the higher price worth it. Also, every company charges a higher margin on their high-end products; this is because buyers of these products are often professionals who have budgets that allow for more expensive purchases. This is every bit as true in the PC market as the Mac market.

For another thing, read a PowerMac forum sometime. No one is buying. Why? They're too expensive. I can't count the number of posts I've read that say "Until Apple gets to at least 1.5 Ghz, I'm not buying" or "I'm waiting for the G5." PowerMac sales have been flat for a long time now. Apple is not offering sufficient performance for the price, a fact that the soft economy is helping to obscure.

[Brazuca]

At least now we can discuss real world events. While Apple does charge a premium for is brand across its line, Apple also realizes that the elasticity in its lower end models is much higher. They have a lot less room to play with and we can see that iMac sales are significantly affected by not only iMac price, but by the competitor's price.

The higher end models, OTOH, have a lot less elasticity. Apple's margins on these machines have been going up when you consider that the technology hasn't improved much (even if we assume that sales are indeed flat). Being able to increase their margin is characteristic of a firm with significant market power.

I won't try to convince anyone that I know what Apples specific market numbers are. I suspect only Apple knows them. But I do believe that a Mac user is a Mac user because of all the benefits that only a Mac can give them. It is this benefit that you would be giving up if you decided to switch. This is the cost of switching that I argue is significant enough to explain the low elasticity of substitution which characterizes the Mac user.

If you can agree to that, than calling Apple a monopoly is trivial. It is just a label which is used to fit certain market structures as defined above. We could call it a brick if we wanted to.

But to bring this back to the original topic, the position that Apple has in this market is what drives Watson into the Windows world. I also mentioned Adobe's fear that iPhoto would turn out to be similar to Photoshop. Here is a giant and the leader in the field who freaked out when rumors that Apple would release a bundled competitor to its software. They understood that Apple's position gave it great advantage and would likely cannibalize sales of Photoshop. But Adobe has a lot of weight, while Watson doesn't.

I also mentioned that if the shoe was on the other foot, Apple would jump on the throat of any vendor which created a product with any similarity to one of its own apps. We all like it when Apple defends its IP. Developer pointed out "xTunes" as an example of an iTunes copycat which was not being bothered by Apple. I didn't deny this but I did want to clarify xTunes' market position. But then a surprise happened:

MacNN reported that Apple was threatening legal action against the makers of xTunes. Exactly what I said it would do.

Here I will concede that there may be other legal factors which Apple has used to protect itself from litigation over Sherlock 3. But the fact that they copied the UI (either on purpose or by being second) is reason enough to call them hypocrites and to frown upon what I see as bullying by the big guy on the block who is pushing around a small developer who has created a great app (by Apple's own contention).

[Brazuca]

Originally posted by mrmister:
Brazuca said:

"This would be great if we could stop all the personal attacks...."

Coming from you, that's pretty funny.

What exactly is the point of your post? It is clear that I didn't start, but somehow you hold me responsible for defending myself?

[JLL]

Originally posted by Brazuca:


What exactly is the point of your post? It is clear that I didn't start�

But you didn't stop it either.

[JLL]

Originally posted by Brazuca:
I also mentioned Adobe's fear that iPhoto would turn out to be similar to Photoshop. Here is a giant and the leader in the field who freaked out when rumors that Apple would release a bundled competitor to its software. They understood that Apple's position gave it great advantage and would likely cannibalize sales of Photoshop. But Adobe has a lot of weight, while Watson doesn't.

That was a rumor - not a fact.

Originally posted by Brazuca:
But the fact that they copied the UI (either on purpose or by being second) is reason enough to call them hypocrites

What should they do? Stop using toolbars, tabs and other standard Aqua UI elements?

[Brazuca]

Originally posted by Nonsuch:



For another thing, read a PowerMac forum sometime. No one is buying. Why? They're too expensive. I can't count the number of posts I've read that say "Until Apple gets to at least 1.5 Ghz, I'm not buying" or "I'm waiting for the G5." PowerMac sales have been flat for a long time now. Apple is not offering sufficient performance for the price, a fact that the soft economy is helping to obscure.

I actually read a number of posts about people rushing to get one as soon as they can. I doubt we can use MacNN forum posts as an indicator of Apple's revenue stream. I suspect that at the very least the sales of PowerMacs will not decrease, but I suggest that the offer of dual G4s is very enticing to many considering the previous models, though speed tests show that the new machines' architecture does not give it the performance edge people were expecting.

The point I am making is: if you need a computer, would you buy a PC instead just because you are not satisfied with the current crop of Macs? How many people do you see saying "this is it! I'm switching to a Dell because Apple hasn't improved the PM enough to justify the $3000+ price tag".

At the most people are deciding to wait (which is a cost they are willing to endure) in order to stay with the Mac platform. Had Apple really been in competition with Compaq, Dell, etc, we would see a mass exodus, something I doubt will happen no matter what Apple does.

But if Apple releases sales numbers which show that its market share has dropped because of the new PMs (not a decline in sales, mind you, for the reasons stated above, but an actual shift of Mac consumers into the PC world), then I would gladly concede that I am wrong and I will look for the reasons why (I am a student after all).

[Brazuca]

Originally posted by JLL:



What should they do? Stop using toolbars, tabs and other standard Aqua UI elements?

I don't know JLL. I don't know enough about software development to understand what they could have done, but I'm sure that they could come up with something to make it different, or at the very least, buy out Watson. I find it very hard to believe that the similarity between Sharlock 3 and Watson is mere coincidence, but I may be. What I am arguing is, even if Apple's move is legal, the effect is to push out a small developer out of the market. And the big factor is that Apple's product isn't necessarily better, just that it is bundled with the OS, giving it an unfair advantage.

Even if you conceded that Watson is a superior product (hypothetically), they still would find it very hard to make any money when Sherlock 3 came out *just because Apple is including it with the OS*.

If another company released Sherlock 3 and tried to compete with Watson, there would be not issue with me. The fact that it is Apple and that Apple has a certain market position (not to mention that Apple is so jealous of its "look and feel") leaves a sour taste in my mouth. I really see a lot of parallels with Microsoft's tactics that I just can't shake.

[Zimphire]

Apple made Sherlock.

Someone copied off of Apple and made Watson.

Apple made Sherlock 3 that had some of Watson's features.


People are shocked and appauled!




Where was the rage when Sherlock was getting ripped off?