Scott's Viewport

Thursday, January 26, 2006

iPod Monopoly

At MacWorld this year Steve Job's announced an 85% market share for the iPod. Though I doubt this would be legally found to be a monopoly in a court of law (Microsoft had over 90% market share when it got tagged as a monopoly), maybe it is time for Apple to declare it has a de facto monopoly in MP3 players, and behave accordingly. Do you think it could hurt sales to declare you're the only game in town?

Specifically, they should "cease and desist" from any competitive practices that would be deemed illegal under U.S. anti-trust law. It's ok to have one monopoly, but you can't leverage it to gain other monopolies. Either they should offer support for 3rd party DRM's through the Apple Music Store and iTunes, or they should license FairPlay for others to use.

Steve Jobs has said this doesn't make business sense for Apple to do. Perhaps he is following Microsoft's playbook too closely. Sure, they might lose MP3 player market share if they allowed competitors access to the Music Store. But Apple doesn't need a monopoly in the same way Microsoft has needed them in the past, because their products compete on merit, not on network-effect lock in. And I believe the Apple Music Store has evolved into something with a potentially larger future than the iPod.

I've always had a smile on my face when I hand money to companies run by Steve Jobs. The fact all my Music Store purchases are locked into the iPod product line makes me frown for the first time.

Related blogs:
  • iTunes 6 and FairPlay
  • Does Apple Need To License FairPlay?

  • Update: Wow! An anti-trust lawsuit against Apple has been given the go-ahead in the U.S. District Court of Northern California. Time to wake up Apple!

    And it may be too late for licensing Fairplay in France to stop the enacting of laws that allow French citizens to break the iTunes DRM.


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