Comment Re:Overtaken? Yes. Bite them? No (Score 2) 500
The argument that's being missed or glossed over goes something like this: Apple's current iTunes store success depends heavily on it holding a commanding share of the market. As Android overtakes iOs in popularity, it will become less and less attractive for content providers to bend to Apple's demands. Why spend significant amounts of time developing your app to meet seemingly arbitrary requirements when there's a bigger platform that requires none of that? Why fork over a hefty share of your sales to Apple when you can sell for free in the bigger Android market next door?
As Apple loses market share, it will become increasingly hard for them to make any demands of anybody. They will have to charge less or nothing for app sales, movie sales, or music sales. They will not be able to restrict software capabilities nearly as much.
This can easily lead to a destructive spiral for Apple. If they don't modify their conditions, studios will take their movies out of the iTunes store. Record labels and eBook publishers will take their music and books elsewhere. App developers won't even bother. Then iPhones will be unattractive for the consumer for lack of content, leading to ever lower market share. On the other hand, if they do modify their conditions, they will lose massive profits from media sales. Their only choice will be to compensate by raising profits on the hardware sales end, but this leads to the same problem if it comes from higher prices or lower quality. Whether or not this happens of course remains to be seen. But historically companies have only been able to get away with the stuff Apple does when they've been the only game in town. It has nothing to do with how smart Steve Jobs is or how big his ego is. It has to do with the fact that Apple's business model depends on control, which others will constantly be fighting for.
As Apple loses market share, it will become increasingly hard for them to make any demands of anybody. They will have to charge less or nothing for app sales, movie sales, or music sales. They will not be able to restrict software capabilities nearly as much.
This can easily lead to a destructive spiral for Apple. If they don't modify their conditions, studios will take their movies out of the iTunes store. Record labels and eBook publishers will take their music and books elsewhere. App developers won't even bother. Then iPhones will be unattractive for the consumer for lack of content, leading to ever lower market share. On the other hand, if they do modify their conditions, they will lose massive profits from media sales. Their only choice will be to compensate by raising profits on the hardware sales end, but this leads to the same problem if it comes from higher prices or lower quality. Whether or not this happens of course remains to be seen. But historically companies have only been able to get away with the stuff Apple does when they've been the only game in town. It has nothing to do with how smart Steve Jobs is or how big his ego is. It has to do with the fact that Apple's business model depends on control, which others will constantly be fighting for.