It amazes me how someone like Dan Lyons, who seemingly doesn’t know much about Technology, gets paid to write for Newsweek. In his latest article, Lyons argues that Apple today is what Microsoft was 10 years ago – a monopolistic company that employs unscrupulous methods to crush competitors. The problem is that Lyons doesn’t have the facts to back up his assertion, and instead relies upon random facts and illogical arguments to make his case.
Lyons begins with, “This summer, Apple’s market capitalization surged past Google’s, making it the financial king of Silicon Valley.” Financial king of Silicon Valley? Lyons must be smoking some serious California herb because this statement is incredibly misleading. The truth of the matter is that Apple’s market cap exceeded that of Google’s for just one day. For ONE day in early August, Apples market cap exceeded Google’s, yet that is somehow enough for Lyons to imply that Apple is the financial king of Silicon Valley?
Lyons ultimate failure, however, is his attempt to paint Apple as a company so powerful and controlling, that small time competitors have no chance to survive. One would assume that a man in Lyons position would be more well-versed in some of the more important technological stories in recent history.
In trying to draw parallels between Microsoft and Apple, Lyons uses one of the most idiotic examples imaginable. He gives the story of Vudu, a company that makes set top boxes that allow you to download movies and tv shows from the Internet. Initially, Vudu had a few advantages over Apples AppleTV. It had a larger catalog of movies, and it allowed users to rent movies as well. So what did Apple do in response that bothered Lyons so much? It improved Apple TV. It increased its catalog of movies, introduced movie rentals, and even made it more affordable. Lyons is apparently irked that Apple had the nerve to improve one of its products by introducing new features. He goes on to state, “now Apple is selling or renting more than 50,000 movies a day, and Vudu is laying off staff.” Does Apple have the unique responsibility to keep Vudu in business? Does it have the obligation to sacrifice its own products so that competing products can become successful? According to Lyons, the answer would seem to be yes. Apple did not engage in anything subversive here, nor did it sabotage or cripple Vudu’s software – in complete contrast to what Microsoft was well-known for in the 1990’s. Lyons, for whatever reason, appears to be rallying against the healthy competitiveness that exists in every industry.
Lyons continues, “The really scary thing about Apple is that it doesn’t just make hit products—it controls entire ecosystems.”
On the contrary, the very reason Apple is able to create hit products is precisely because it controls the entire ecosystem. Keep in mind that Apple has less than 8% of the US PC consumer market, and there are a plethora of other competing music players to the ipod on the market. If you don’t want to enter the Apple ecosystem, then don’t. Don’t want a Mac? Get a PC. Don’t want an iPod? Get a Zune.
Lyons doesn’t stop there, and takes his buffoonery one step further. “Apple owns popular hardware platforms (iPod, iPhone) and operates the only store that can sell music, movies and software programs for those platforms. Apple sets prices and takes 30 percent of the money.” Wow. I can’t help but repeating myself: He gets PAID to write for Newsweek?!
First of all, Apple does not operate the only store that can sell music that works on the iPod. Any DRM-free marketplace, such as Amazon, sells a ton of mp3’s that can be used on any device. And as for iTunes being the only medium to download software for the iPhone – so what? What point is Lyon trying to make with that? And as for Apple setting the prices, software developers set their own prices. Or is Lyon referring to the price of music and movies? It’s hard to tell because he just jumbles everything all together in a poorly veiled attempt to make an argument. To be honest, I’m not even sure if Lyons himself knows what he’s referring to. And with respect to taking 30 percent of all software sold in the App Store, Lyons might be well-advised to investigate what percentage other companies take from mobile software developers. The fact of the mater is that the App store on iTunes has been a tremendous success and moneymaking venue for quite a number of software developers. In asserting that iTunes is the only place to buy iPod compatible music and that Apple is monetarily choking software developers with its 30% cut, Lyons exposes himself as someone without the necessary knowledge and/or background to write intelligently about the technology industry.
Lyons doesn’t stop there, and continues to make a number of absurd arguments that lack any factual basis. Apparently he thinks that Apple is a bully because the iPhone doesn’t work with flash, and for some reason, he brings up a frivolous lawsuit filed in Alabama as proof that Apple is an out of control freight train? Gimme a break.
Writing about Apple might garner Lyons more hits on his website, but for the sake of smart and informed writing, he should stick to a subject he’s actually well-equipped to write about.