Fake Steve Jobs and His Real Bad Argument

Look, I don't want to play the role of Apple defender, because heaven only knows message boards and Apple shorts think I support this company too much already.

(As an aside, I neither "support" nor "pump" any company. I try to focus on the fundamentals, good and bad, and then call 'em like I see 'em. Sometimes I'm right; sometimes I'm wrong. But always, I try to be fair. Truly.)

As I read Dan Lyons' Newsweek tome this week about the evolving Big Bad Apple and how it is becoming a Microsoft monopolist in training, it struck me as odd. And bordering on unfair.

Full disclosure: I loved Fake Steve. But there's something in Lyons' real voice as an Apple wag that just rings hollow.

Apple Store 5th Ave NY
Apple Store 5th Ave NY

He writes that not long ago, Apple was a niche player. But today it's a mega player so powerful that smaller competitors are forced to live on its scraps to survive. Wait a second! It's not as if Apple paid some magical fee and instantly became what it is today. The company slaved and sweat and innovated and built a better musical mousetrap (thank you iPod) and millions beat a path to Cupertino. Apple indeed became powerful and successful but because it earned it.

Lyons suggests that innovations in AppleTV, as an example, are leading to the demise of a smaller competitor called Vudu, which had been "winning rave reviews" for its competing product. In January, he writes, "Apple struck back," expanding its own movie catalog, lowering its prices, and (*gasp) improving its product, leading -- Lyons surmises -- to Vudu layoffs. Huh? Did Apple do something wrong there? Illegal? Unethical? Is the company supposed to stand still and let competitors grab market share? Or should Apple continue to invest some of its hard-earned profits into creating new, better, more competitive products? Is Lyons suggesting that innovating, that economic Darwinism, is somehow bad? I thought this was America.

Lyons complains that the "really scary thing about Apple is that it doesn't just make hit products" (that's, umm, scary?) -- "it controls entire ecosystems." He compares iPod/iPhone and their exclusive connection to the iTunes digital media store to Microsoft's operating system and its control of the applications that run on it. This is a red herring at its finest: Microsoft achieved its monopoly through arm-twisting and predatory behavior. Look no further than billions of dollars in settlements and fines the company pays as almost a cost of doing business to governments and competitors to settle these cases.

Apple enjoys massive digital music market share not because it threatened all of us to buy an iPod, but because it had the foresight and influence to build an easy-to-use, convenient and fairly priced online store to go along with it. For Lyons, it seems no good deed goes unpunished.

Unlike Microsoft's way of doing business, if consumers don't like the iPod/iPhone ecosystem, they have myriad choices elsewhere. They're not buying iPods because they have to; they're buying into the Apple ecosystem because they want to. And that's the clearest difference I can tell between Microsoft and Apple.

A point lost in the Lyons' piece entitled "One Bad Apple." Lyons says Apple has the nerve to control which software applications are sold on its App Store. In its retail stores, Apple audaciously tells third party accessory developers when they can announce new products, and charges them fees for the privilege of creating stuff for Apple products. Hey! Guess what? It's Apple's stores and Apple products, and if developers don't want to play by Apple's rules, they're free to develop for other tech makers. It's just that a new slick widget for iPod might generate a bit more revenue for these developers than, say, a slick widget for Zune. But hey, they've got a choice.

Does Apple squeeze to hard? Exert too much control? Is Apple overly sensitive? Too image conscious? Yes, yes, yes, and yes. Predatory? A monopolist? Running afoul of the law? Anti-competitive? No, no, no, and no.

No one's forcing anybody to do business with Apple. No one's forcing anybody to invest in Apple. If dissatisfaction grows, customers and investors can pick up their marbles and play somewhere else. But last time I checked, Apple continues to increase its market share, and while volatile, its shares are still generally holding their own. Down, yes, but certainly not out.

I think Lyons simply misses the point: "want to" versus "have to." Apple customers "want to." Microsoft customers "have to." Well, it was "have to" until, ironically, Apple came along.

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