Apple is doomed because the iPhone is too big to fail

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Macworld

Congratulations to all of the Macalope’s fellow Apple writers! The U.S. Department of Justice has given us all something to write about for the next umpteen years.

Yes, you’ve probably heard by now that the DoJ is suing Apple over its “iPhone monopoly.” Let’s unpack this a bit.

First, Webster’s defines “Monopoly” as a board game that kids love to play and parents hate, that has been turned from a cautionary tale to some twisted form of capitalist indoctrination. But that’s not the one we’re talking about. We’re talking about a real market monopoly. Does Apple have one?

Apple’s market share in the U.S. is something around 55 percent. So, it is the largest vendor, but it’s nothing compared to the 95 percent market share Microsoft enjoyed when the DoJ took it on around the turn of the century. Still, the case the DoJ is making is specific and it has a good chance of sticking.

The DoJ is saying Apple has a preponderance of the “performance smartphones” market, which is to say the high end of the market. As a mythical beast who has long defended Apple from the hordes that said it should chase market share by pointing out it already had the most profit share, which is way better, the Macalope can’t really now claim that the DoJ doesn’t have a point. “Performance” is not how he would phrase it, but it’s pretty much the same thing.

The DoJ most likely chose to bring the case in New Jersey because of a previous ruling there in the dentures industry that allowed the market to be defined similarly. Apparently, they were suing a company making performance teeth? The Macalope doesn’t know. He has a floppy drive for a mouth.

In the DoJ’s court filing, it says:

After leveraging its smartphone dominance to car infotainment systems…

Objection, your honor. Assumed facts not in evidence. Even if you accept that Apple has a monopoly of the “performance” smartphone market, there’s very little evidence it has leveraged that effectively to car infotainment systems.

Also, please don’t say “infotainment.” It hurts the Macalope’s ears.

…Apple has told automakers that the next generation of Apple CarPlay will take over all of the screens, sensors, and gauges in a car, forcing users to experience driving as an iPhone-centric experience if they want to use any of the features provided by CarPlay.

Don’t threaten the Macalope with a good time.

Now, having seen some of Apple’s emails that were made public over the antitrust Books case, is it possible someone at Apple sent out a threatening email, trying to strong-arm a car manufacturer into using CarPlay? Sure. But the company’s position in the automotive market is not strong enough to back up such a threat. They can’t even get GM to use CarPlay.

GM. In terms of brand hotness, that’s like not being able to get Spencer Gifts to sell your “Dune”-themed moving sand art.

IDG

You put a rubber worm in it, Derek. That’s not that hard. Points for calling it “DUNC”-themed but we know you did that because it’s unlicensed.

As we’ve seen in the iBooks case, Apple doesn’t have to be the market leader to commit illegal, coercive acts. And maybe it’s done that again here. But the DoJ doesn’t do its case any favors with its kitchen sink approach to case making. A number of the quotes it pulls from Apple executives seem heavily out of context and/or designed to equate the fact that Apple does marketing as somehow a sign that Apple’s dominance doesn’t come from making really good devices. Note to the DoJ: both can be true.

Others have opined on the DoJ self-servingly taking credit for Apple’s successes over the past 20 years by suing Microsoft and the Macalope doesn’t have much to add to what’s already been said.

Ultimately, Apple needs to take some of the blame for things getting to this point. While it’s true that the company can both do marketing and make great devices, it’s also true that it can be a tremendous control freak and make great devices. That might fly when you’re the little guy, but it doesn’t when you’re the 800-pound gorilla.

Apple Inc, iPhone

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