Given all of drama over the recent tiff between Apple and Adobe, the
news that regulators in the United States are looking closely at Apple
shouldn’t come as a surprise. Apple’s behavior, legal or not, was bound
to attract the attention of antitrust regulators sooner or later.
While many Apple critics will welcome the news, I think Apple
supporters and detractors alike have good reason to send the same
message to the regulators: thanks, but no thanks.
As I wrote recently, Apple’s thirst for control today resemble the thirst for control it had two decades ago. It was able to quench its thirst then, but the price was steep: it lost the battle for desktop dominance. Despite that, Apple not only survived as a company, but thrived by building a high-quality computing products that appealed to high-end consumers. With the iPod and iPhone, Apple cornered new markets in which it is a prominent if not dominant player today.
Apple’s desire for control has once again been made evident through its position in the mobile market. And in today’s regulatory environment, that could spell trouble for the company. But it shouldn’t.
The level of control Apple exerts over its products and the ecosystems that have been built around them is a big reason why Apple is so successful in the first place. After all, if it didn’t exert the level of control it does, chances are the consumer experiences Apple has created over the years would be markedly different. In effect, Apple’s ability to compete effectively is entirely dependent on its ability to be a controlling perfectionist. Taking that ability away would therefore be an inherently anticompetitive act.
Obviously, Apple’s supporters don’t like the specter of a regulatory smackdown. But Apple’s detractors have good reason not to want one either: Apple’s insatiable thirst for control is eventually likely to weaken the company’s position in the marketplace and create ample opportunity for the competition.
Apple can innovate and jump out in front of competitors, just as it did on the desktop, but if it continues to rule its technology empire with an iron fist, competitors will eventually be able to follow the path paved by Apple’s investment. They’ll catch up in their own way and create viable consumer alternatives. The alternatives can compete on a number of fronts, from price to features to ‘openness‘.
In the end, Apple will probably always have a market for its products as it has a loyal customer base and a seemingly perpetual ability to inspire. But at the same time, competitors will always be able take advantage of the disadvantages of Apple’s strategy, just as Microsoft did. For instance, if Apple doesn’t buy into the notion that cross-platform development is important or desirable, or doesn’t believe it needs to support it, that’s fine. The rest of the players in the market don’t need Apple, and they can make Apple pay by attacking the market in ways that prove Apple’s assumptions to be short-sighted and wrong. We can already see hints of this with Android, for instance.
The bottom line is that strategy is a key area in which all companies, including Apple, compete. Antitrust regulators seek to create a theoretical ‘level playing field‘ but a ‘level playing field‘ has never existed in the real world, and their actions ironically have the potential to determine winners and losers.
Outside of the business environment governments create through fundamental business law and taxation, a ‘level playing field‘ isn’t necessary or desirable, because competition and innovation are promoted when companies are allowed to ‘Think Differently‘ and to pursue variant strategies. If regulators look to force Apple and its competitors to all compete in the same fashion, competition and innovation in the mobile market will not thrive, it will die.
Photo credit: kyz via Flickr.