Rotten Apple Threatens Commerce for All

Written by on August 28, 2012 in BillingViews, Opinion with 0 Comments

An overlooked aspect of Apple’s victory over Samsung is that if Apple succeeds in using its patent portfolio to monopolize the handset and mobile OS market, it may also monopolize mobile commerce. It seems unlikely that such monopolization will be allowed to occur, but the communications industry needs to take a stand when it comes to how court decisions can impact where transactional revenue may be allowed to flow.

Apple has cultivated a good guy brand image with clever advertising and phenomenal products, but Apple is a bully. Steve Jobs has been lauded as a hero, while competitors like Bill Gates – who’s out trying to eradicate Polio by the way – has at times been vilified for being far less anti-competitive than Mr. Jobs. It’s now been written several major papers that Steve Jobs told his biographer he wanted to “destroy Android” by going “thermonuclear” on it because he considered it “stolen technology.” These are not only the words of an aggressive competitor, but of a megalomaniac. Jobs was one to attend to detail. His choice of the word “thermonuclear” likely wasn’t an accident. It infers total destruction and annihilation, terms that aren’t in the spirit of healthy competition.

Many onlookers have suggested that Apple’s attack on Samsung is merely a warning to Google, and perhaps others.
While Google isn’t all baby kisses and bunny rabbits either, the company is a great innovator in its own right, and is a proponent of open, shared technology – a concept Apple clearly finds abhorrent. With the touch-centric Windows 8 platform launching, one wonders whether Apple isn’t also shaking a big fist in the direction of its old rival Microsoft. This aspect of the story isn’t new. Anyone who ever built PCs in the age of desktops recognizes the great advantages of the open ecosystem. If a component fried out, you could easily replace it. When Mac components fried out, your Jobs-worshipping pals were left with flashy $2000 paperweights. But Apple never dominated the PC market they way they dominate in mobile devices.

Ultimately, courts will decide just how far Apple can go in claiming ownership over pokes and pinches. But how will they draw a line between the operating system and what runs on it? Apple is already dominant in the handset and mobile content markets. They’re able to charge hefty premiums for transactions conducted within their ecosystem as a result. For mobile commerce – think apps, digital content, mobile payments, and online retail via mobile – to open up and benefit consumers, Apple has to face competition from other ecosystems. If other players are limited in their ability to innovate because Apple is free to bully would-be competitors with its patent portfolio, it gives Apple an uneven – and perhaps unfair- advantage. If the result was only that Apple sold more devices than anyone else as a result, that wouldn’t be so bad. But in terms of mobile and online commerce, that device – be it an iPhone, iPad, Apple TV, iPod touch, or Mac – is merely a conduit into an Apple controlled ecosystem in which Apple can unilaterally dictate the cost to do business.

This may be the next front in the Apple patent war. Basically, every other market participant needs to be prepared to unite and break Apple’s stranglehold on mobile (and therefore online) commerce. For mobile operators, the big question is how their interests are best served. Is it in standing on the sidelines and avoiding Apple’s fury? Or pushing back and defending the border between operating systems and ecosystems. Mobile operators are most likely to benefit from a marketplace in which they can participate at many levels and not just as efficient sellers of Apple’s next IP-protected device.

(Maybe it’s time to buy a Kindle Fire. After all, Amazon takes AMEX points.)

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About the Author

About the Author: Ed Finegold is CSO for Validas, a company that specializes in personalized user experiences that leverage analytics-as-a-service to simplify mobile buying, selling, pricing & billing. Ed has been a regular contributor to BillingViews. .

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