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General discussion

Wow. Apple > Microsoft.

May 26, 2010 5:43AM PDT

wowwwww....

http://gizmodo.com/5548460/apple-is-now-bigger-than-microsoft

"So, it's happened. By at least one metric, for at least this very moment?it could change tomorrow?Apple is now bigger than Microsoft. Apple's market cap passed Microsoft's today, just two months after edging under Walmart. The latest showing from Google Finance puts Apple's market cap at $225.98 billion to Microsoft's $225.32 billion.

Reflecting briefly on where Apple and Microsoft were ten years ago, and snapping back to the present, it's kind of a quietly epic moment."

dr.k

Discussion is locked

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No excuse now...
May 26, 2010 6:25AM PDT

Good on Apple. Now, I don't want to hear anyone complain about Microsoft being a monopoly. In fact, in some respects, quite the opposite could be argued.

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Market cap has nothing to do with being an monopoly.
May 26, 2010 6:43AM PDT

Microsoft still has a monopoly on PC operating systems. Apple has a monopoly on digital music sales. Both markets need to be watched closely by the DOJ because of this.

To further complicate matters, many people don't realize that having a monopoly on a market is not in and of itself illegal. Using that monopoly to keep other companies from being able to compete in that marketplace is what's illegal.

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What's a Monopoly?
May 26, 2010 6:57AM PDT

Just how much of a market do you have to have in order to call it a monopoly? Apple has 70% of online (digital) music sales, and 28% of all music sales. To me, 70% still leaves a lot of room for competitors so I don't think I'd call that a monopoly. Is there an official FCC definition? The dictionary says it is "exclusive possession or control", and 70% ain't that.

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According the law 70% is usually enough to warrant further
May 26, 2010 10:47PM PDT

investigation. There have even been cases where a smaller market share has triggered one.

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That would be a great counter-argument
May 26, 2010 7:18AM PDT

had I actually argued that market cap = monopoly. I didn't.

As I'm sure you would agree, Apple has had the luxury of being somewhat of "the also ran" company vs. big, bad, evil-intentioned Microsoft. They've been able to fly under the radar in many respects where Microsoft was always under monopolistic scrutiny (and sometimes for good reasons, admittedly). Now that they are the $$$ king of the hill (which, of course, could change in an instant), flying under the radar isn't going to work. Goes with the territory.

Of course, "also ran" still meant hundreds of billions of dollars to throw around, but hey, what's that amongst friends?

Now, as to your OS monopoly claim, let's see: There's Windows, there's OSX, there's the iPhone/iPad OS (which, in no small measure is directly tied to Apple's fortunes these days), there's Linux, there's Android, there's WebOS, there's Chrome, etc.

As for music, there's iTunes, theres...um...uh...oh yeah...Amazon...maybe Walmart. Don't forget about the Zune!

Yeah, I'd say where monopolies go insofar as real choices are concerned, the digital music distribution channel seems to be a lot more locked up than the OS situation is these days.

From wikipedia regarding the term "monopoly": "A pure monopoly is an industry in which there is only one supplier of a product for which there are no close substitutes and in which is very difficult or impossible for another firm to coexist."

As we compare the state of operating systems in the marketplace vs. digital music sales, which sector would come closer to the definition above? Today, I think it's quite clear.

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Lumping smartphone OS's in with PC OS's is like
May 26, 2010 11:10PM PDT

mixing scooters and motorcycles with cars. No court would accept such an argument from Microsoft if they were trying to deflect attention from their market dominance.

You know and I know that in the eyes of the law, in spite of Apple and Linux's growth, Microsoft still has a monopoly on worldwide PC OS's 90% market share is still 90% market share no matter which way you dice it up. (.">http://marketshare.hitslink.com/operating-system-market-share.aspx?qprid=Cool. I never implied this monopoly was inherently bad either, merely that it was true. Same with iTunes's digital music dominance. Its not bad per se. It just means that both of these companies actions will be watched closely to see if they are abusing these monopolies within their respective markets.

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Ah, but there's the rub...
May 27, 2010 2:41AM PDT

Isn't the iPad being touted as a "Netbook Killer"? Isn't it known as a "tablet computer"? Isn't it a computer in the same sense any other device is a computer? If Windows 7 powered a tablet PC, would it not be fair to "lump" that in with any other OS usage?

So if Apple sold 6 billion iPads, you'd say that Microsoft has a monopoly on operating systems because the iPad doesn't use OSX? The iPad isn't a smartphone, but does use the same operating system as the iPhone.

So, Apple's blurred the lines. Good for them.

What any court would also look at is trend lines. Microsoft's dominance in the OS market is decreasing. Were it increasing, a court could easily use that as fodder in any monopoly vigilance.

But probably more important is how a company might use its dominance in creating a restraint of trade. Part of the conversation about Apple/iTunes is that they may have used this dominance to prevent record labels from exclusive debuts of songs on Amazon's music service. That's a no-no. And, of course, we all know Microsoft's predatory history that they were rightfully slapped down for.

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A monopoly is based on what is, not what might be.
May 27, 2010 5:11AM PDT

Apple has not sold ?6 billion iPads? and smartphones still only represent 1.3% of all computers connected to the internet. Even with smartphone OS?s factored into the mix Microsoft Windows still powers over 92% of the world?s computers.

http://www.computerworld.com/s/article/9142978/Windows_market_share_slide_resumes


There is no way you can spin that so it?s anything other than what it is: a monopoly. ?Trend lines? wouldn?t make one bit of difference to a court if Microsoft decided to use its dominant position in anti-competitive ways tomorrow? or even 5 years from now. Whether they were at 92% or 85% market share in 5 years would not have any bearing. It?s still a monopoly and any monopoly that is used to keep away competition will draw legal heat.

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So, you're agreeing with me...
May 27, 2010 6:12AM PDT

My major point was that what courts would mostly look at is HOW a company used it's dominating position to restrain trade. That's what's truly actionable insofar as the courts are concerned, and that's what I said. And if some entity wanted to argue that Microsoft needs to be somehow sanctioned just because of market share --with no evidence whatsoever that they were trying to restrain trade-- the trend lines would indeed be germane (if such a suit ever got past the frivolous stage).

But on the other issue, you try on the one hand to negate so-called smartphone OSs in the tabulations like the iPhone OS that powers the iPad, and then you essentially say it doesn't matter because of the current percentage this type of OS has in the marketplace.

Hypotheticals are very, very, common in jurisprudence. Courts/judges constantly use hypotheticals to test premises. Just look at the transcripts of oral arguments before the Supreme Court, or any court where the judge is the determinant (vs. jury).

So if you are up there trying to make a case against Microsoft with its declining market share and then try to convince the judge that the OS that powers the iPad shouldn't be counted, do you not think a good judge wouldn't query you on both present trends and possible future numbers and exactly what the device is and does, even in the extreme? Of course he/she would, because that would reveal the absurdity of the claim that such a device shouldn't be counted in the OS tabulation in the first place.

The iPad is a new form of the ever-evolving personal computer. Apple is to be commended for helping to usher in a new paradigm. But make no mistake about it; it IS a personal computer.

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If a case was brought against Microsoft tomorrow
May 27, 2010 7:50AM PDT

for anti-competitive behavior the iPad's numbers would be inconsequential. Same with the numbers of all smartphone OS's combined. 1.3% versus 92% is not even close. Maybe in 20 years things will be different but even with the growth of smartphones, Microsoft is only losing a point or so a year.

So it's going to be a long, LONG time before Microsoft loses it monopoly position for operating systems. And during that time, this monopoly will continue to expose them to closer scrutiny than companies without a monopoly on a given market. And that is as it should be.

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Ok
May 27, 2010 8:02AM PDT

Now you seem to be agreeable to counting smartphone OS's in the mix, notwithstanding the percentage at present. My work is complete!

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If you say so.
May 27, 2010 9:21AM PDT

You started this by saying, "Now, I don't want to hear anyone complain about Microsoft being a monopoly."

As if market share has anything to do with a monopolies. Regardless of this news, Microsoft still has a monopoly on operating systems. Apple has a monopoly on digital music distribution. A monopoly is a monopoly is a monopoly. Lots of companies have them. I've never claimed anything otherwise.

Why you went down a rabbit hole about how the growth of smartphone OS's somehow making a difference to MS's monopoly on OS's I will never know because it makes no difference at all... at least not in the present or the near future. 20 years out? Maybe. But if you say we are in agreement now then so be it.

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Rabbit hole?
May 29, 2010 11:05PM PDT

The iPad (using a smartphone OS) is a personal tablet computer, and desktops are becoming somewhat "old school" (for consumers). People are opting for mobile devices today, be them laptops, netbooks, tablets, and yes, even smartphones. And, of course, there's the burgeoning "cloud computing" world.

The paradigm is changing. These are the devices people are doing their computing on. Why that wouldn't be germane is a bit puzzling to me, but that's your take. You'll have to convince people about that one.

It would be like the courts today going after ATT and/or Verizon for having a stranglehold on the landline phone industry. It might be true by the numbers, but landlines are quickly being ditched in favor of cellular phones. Again, snapshots don't tell the real story of a changing marketplace.

And comparing Microsoft's declining market share in the OS world with Apple's lock on digital music distribution doesn't wash.

Think of a baseball team that wins its first 50 games but then loses each starting pitcher by some crazy coincidence. Now, a snapshot on the day and even days/weeks following this calamity will show the team far out in front. But the tide is turning, and the snapshot doesn't tell the real story. Other teams are on the ascension, and it's clear by analysis (not unlike what a court would do, lol) that the circumstances have changed.

As for Apple, though, I don't see that tide turning. Yes, there are competitors, but there's no indication of any new paradigm usurping Apple's hold on this sector, unlike the choices that now abound in PC computing arena.

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Yeah and the automobile world is changing too...
May 30, 2010 4:03AM PDT

with the rise of electric and alternative fuel vehicles. But its not changing that fast. In 20 years things will be very different just as in they will be in the world of computers but inside the tech bubble its easy to forget just how slowly real world change occurs.

If anybody with a monopoly started acting in an anti-competative manner the courts would punish them based on what they are doing TODAY, not on how the market MAY be in 20 years.... or even 5. The law is based on facts, not speculation. And whether you are at 90% today or you'll be at 70% market share in 6 or 7 years that is still clearly within the limits of what the law considers a "monopoly".

Its fine to wax poetic about "paradigms" and "burgeoning industries" but the raw numbers don't lie. As of May 2010, 92% of the world's internet connected computers run Windows XP/Vista/7. All smart phones lumped together (Symbian, iPhone, Android, etc) do not even add up to 2%.

http://www.netmarketshare.com/report.aspx?qprid=10&qptimeframe=Q

Mobile computing is exciting stuff to be sure but we shouldn't confuse the hype inside the tech bubble with real numbers. Its going to be a long time before smart phones catch up with the install base of Windows machines in the world.

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lolol funny you should mention that....
May 26, 2010 12:46PM PDT
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Nice
May 26, 2010 2:02PM PDT

I wish they went after Apple's attempt to block the Palm Pre from iTunes though, that was pretty anti-competitive.

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Palm really has no claim in this case.
May 27, 2010 2:44AM PDT

iTunes music will works on any device that plays AAC?s so Palm really has no claim here. They could have built their own music/synching software and showed people how to import their AAC tracks. Or they could have found a legit partner like Songbird or Windows Media Player. Instead the hacked their way into a free ride on the iTunes train which Apple is not obligated to give them. No court would find that Palm had some sort of constitutional ?right? work in iTunes. They were acting like snarky brats and got rightly smacked down because of it.

Now using the iTunes monopoly to keep your competitors from legitimately competing (as in the Amazon mp3 store?s case) is clearly wrong. In this case Apple deserves what it will get.

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Well...
May 28, 2010 11:11PM PDT

Just to nitpick, Blackberry etc already have an app that looks at your itunes library and syncs it with your phone.
Apple may not be obligated to give them access to iTunes, even though I think it would be within rights of the government to require that, to encourage competition. Being the dominate music playing and online music store software. What Apple actually did is take deliberate efforts to block the Pre. To me that counts as 'using the iTunes monopoly to keep your competitors from legitimately competing'.

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Drag the AAC files into whatever software
May 29, 2010 2:29AM PDT

the Pre wants to use. Nobody is stopping anybody from doing this. Its not even that hard. AAC is hardly a proprietary format. It's not as nice of an experience as linking directly to iTunes but tough luck. Its not Apple's responsibility to make their competitor's experience "nice."

If you leech onto other people's software without their permission then don't act all surprised when they lock you out. Competition is not stomping your feet and having a tantrum. Stop whining like a child and make your own damn software. No one was stopping Palm from doing this. Hacking your way onto a competitor's platform was a losing battle and a huge waste of resources (resources that would have been better spent on some decent advertising).

Palm was acting like a vagrant hitching a free ride on a boxcar. They got away with it until the train officials booted them off. Then they tried again and got booted off again. They have no "right" to ride that train just like Palm has no "right" to have their device work with their competitor's proprietary software. Apple is under no obligation to make it easy for others to use the software they pay money to develop. Whether Apple went out of their way to lock Palm out is inconsequential. Its their software. They can do whatever they want with it.

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Ohh come on
May 29, 2010 8:42AM PDT

It's the most popular music playing software. You call it hitching a ride, but I call it the competition being able to effectively compete by using the most popular desktop software.
It would be equivalent if Microsoft Office did something every update to make it difficult for competitor programs to open .doc files.

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The competition already can open .doc files from iTunes
May 29, 2010 1:44PM PDT

They are called AAC.

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And Apple deserves to be investigated regarding iTunes
May 26, 2010 10:54PM PDT

because they have a clear monopoly on digital music distribution.

They do not however have a monopoly on the smartphone market so, for the time being at least, they will remain free to run their app store the way they like (whether this is a smart business decision on their part is a completely different question). Like I said, its not just about having a monopoly. Its about the combination of a monopoly in an anti-competative way that draws legal heat.

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No
May 26, 2010 1:56PM PDT

Wallstreet thinks Apple is bigger than Microsoft. That's a big difference to actually being bigger than Microsoft. My cyncism at wallstreet being able to competently judge a company means I'll stick to looking at revenue and profit. Apple still had a few quarters to go to bypass Microsoft there.

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That, of course, is a big distinction...
May 26, 2010 10:42PM PDT

But the media story today is that Apple is the new king of the hill, even though a company's fortunes on Wall Street can change overnight --regardless of actual revenue/profit.

But free advertising like this kind of market cap story is only going to feed into the meme (hate that word!) that Apple is the company to look at first if you're a consumer.