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When Microsoft Corp. (NASDAQ: MSFT) was seen as a monopolist in the 1990s, governments all over the world hit it with antitrust lawsuits. The world's largest software company saw its kingdom under attack even as it continued selling operating system software (and later, internet browsers) to all the world's PC manufacturers. Microsoft is still the king when it comes to software these days, but an old nemesis, Apple, Inc. (NASDAQ: AAPL) is shaping up to become the next monopolist in the PC technology arena.
Apple's iPod/iTunes ecosystem could be called a monopoly. It commands the lion's share of the digital music player and downloading market and customers just can't stop buying the hardware and software. Does that make Apple a monopolist? After all, by some measures, Apple's market share is now larger than Wall Street darling Google, Inc. (NASDAQ: GOOG). Does Apple's 11% share of the PC market make it a monopolist? Does this smaller market share even suggest that? On the surface, no. But Apple's influence extends way beyond that hardware market share figure. Its control of entire market segments would suggest Apple may resemble what Microsoft looked like 10 years ago.
Microsoft controls the operating system that sits on the majority of the world's PCs and many of the applications that reside on those operating systems. Apple controls the iPod and iPhone universe and tightly controls which applications connect to those pieces of hardware. In fact, Apple has more of an iron fist over the ecosystems it is involved in than Microsoft does. Let's just see who the monopolist is in 10 years. It may not be Microsoft or Apple, but Google.
Agree? Disagree?
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Reader Comments (Page 1 of 1)
9-10-2008 @ 2:37PM
Gandhi said...
Disagree.
Difference is that I have a choice on whether to buy Apple products. With Microsoft, it does not matter whether I buy Dell, HP, IBM, or whatever else (except Apple Macs of course), I am still stuck with Windows and Internet Explorer is still foisted upon me.
If I do not like the iPod, I can buy a Samsung or Sony player, or (heaven forbid), a Zune. I can purchase music from Amazon, Walmart, or buy old-fashioned CDs. If I do not want to iPhone, Nokia, RIMM HTC, et al will be happy to sell me a cell phone. As for apps for the iPhone, at least they are available! Name me a good/worthwhile app for purchase on a Nokia.
9-11-2008 @ 9:45AM
Mike O said...
Gandhi is right on the money.
Microsoft practically bullied PC manufacturers into bundling Windows with their PCs. Apple, on the other hand, simply makes a superior product. You don't HAVE to use iTunes with your iPod, though almost everyone *chooses* to do so.
There are also dozens of players in the digital music player space, so there's no shortage of choice. Just so happens that people CHOOSE iPod over the competition.
If a company comes up with a better product, people will buy it.
9-11-2008 @ 1:26PM
The World Worst Stock Picker said...
I disagree with Gandhi. I cannot find a rival for the ipod in the over 30gb category. I would really buy a different player but the other company that makes this type of device is Mr softie. The zune does not have equalization so I am stuck with buying another Ipod even though they break down very easily. In addition, the zune software cannot play song that were purchased in Itunes since they are protected.
http://worldworststockpicker.com
9-12-2008 @ 9:02AM
Pierre Roberge said...
#3, the fact that you cannot find a rival for the ipod in the over 30gb category has nothing to do with Apple. They have not forced the hard drive manufacturer not to sell the HDs to other manufacturers. It is the effect of the ineptitude of Apple's competitors.
Microsoft on the opposite, "forced" PC manufacturers to exclude other operating system, threatening to increase the price of Windows artificially unless they abide by their tactics, this is uncompetitive so a monopoly.
Apple has competitiors and is not forcing anyone to do anything outside their own ecosystem, microsoft does.
9-11-2008 @ 5:52PM
Mark said...
Perhaps Ghandi missed this:
http://www1.euro.dell.com/content/topics/topic.aspx/emea/segments/gen/client/en/ubuntu_landing?c=uk&cs=ukdhs1&l=en&s=dhs
Perhaps Ghandi can tell me what hardware I can legitimately buy if I wish to use OSX but not on Apple hardware?
So that's one bad argument debunked then.
Oh, and as for the Nokia applications, N-Gage would like a word with you.
Two bad arguments done and dusted.
Oh, and just to point something out, Apple's global PC share is about 5-6% not 11%
9-11-2008 @ 7:11PM
KenC said...
The question isn't whether Apple is a monopoly or not, as natural monopolies are LEGAL!
Rather, the question is whether Apple is an abusive monopoly, as MS was and why MS was sued by the DOJ? In that case, I'd say NOT. Apple has done nothing like what MS did to bring down the wrath of the DOJ.
9-20-2008 @ 7:14PM
Henry Postigo said...
In the case of software, we cannot blame apple like we did windows. They make the hardware and software together. I want the GUI from Nokia in my samsung phone, do I blame Nokia? Also about the ipod, the only reason I choose it, it's because of the ease to upload music that I have with iTunes. If it were for me, I would choose a Sony NW-HD5 which I still have and it's superior in sound quality and battery time, however Sonicstage is the worst. I see that Jobs is slacking with the iphone. Same hardware new interface. That novelty will wear off soon. buying a new phone is not like an mp3 player. We don't want to renovate new contracts forever. I just bought a ROKR E8 and I am happy with it. Apple better come up with a brand new Iphone because the Google Android is gonna give us a that leverage we needed.