Tuesday 25 July 2006


Apple's rightful dominance of the legal music download business to date should not be allowed to develop into long term market control.

I have previously written on my conflicted feelings towards Apple. On the one hand I own and admire many of their products. On the other hand, I have endured appalling customer service experiences as an Ipod and notebook customer. I’ve also heard of more.

Perhaps the most disturbing Apple development is the stranglehold they now have over music downloads. The Ipod / Itunes tie up which prevents Itunes users from using non-Apple players is contrary to consumer and artist interests and also compromises the development of new digital music player technologies.

France has been the first nation to notice this nasty development. Other European governments and consumer groups are now also taking notice.

The issue is that once you are an Ipod owner, Itunes user and Istore music consumer, you are locked into the Apple universe forever in respect of the music you purchase or load into Itunes. Should Sony or another company come up with a player more suited to your needs and interests in the future, you’ll need to purchase your music again and burn your CDs again. That means the more loyal you are to Itunes Music Store and the greater your commitment to the legal acquisition of music, the greater your punishment will be should you elect to abandon the Apple stable.

Apple claims to have engineered this arrangement in the interests of copyright protection. When copyright protection initiatives harm the interests of honest, high spending consumers most, as Apple’s approach does, the merit of the argument is at best weak. Apple may have also noted the Windowsesque consumer leverage their well-intended copyright initiative avails them of.

The Ipod is an impressive device. Myriad problems with batteries, screens and general reliability make it a far from perfect machine. The kind of market power Apple is obtaining in the music download business will increase the already high arrogance levels consumers experience from the company and diminish Apple’s innovation energy. More importantly, other more nimble players will be deprived the opportunity of bringing new and improved products to market.

Word is that other great market control freak, Microsoft, will have a rival product in the market before year’s end. Bring it on. And let’s see some other products out there from other companies as well. And let’s make a sensible level of player interoperability a feature of all players.

Apple has been a great innovator in digital music and its staggering worldwide marketshare in legal music downloads and its enormous profits are a just reward for its innovation. Apple should not be able to leverage its justified initial high market-share into market control. The French and now Norwegian governments are right in pursuing legislation requiring that Apple make its music downloads compatible with a range of music player devices. Aren’t we capitalists all about competition? Doesn’t competition produce the best outcomes for all?

Surprised we have to learn that from the French and the Norwegians.

No comments:

Post a Comment