When Steve Jobs sent an internal email declaring an Apple “holy war” against Google, little did we know who the casualties would be. Four years later the death toll includes advancement, competition and most importantly, change. Innovation in a free market can spur healthy competition, drive up product quality and reduce prices for consumers. Strangely, so many of the hallmark rules of economics seem to be largely nullified by Apple products as of late.
Somehow Apple has managed to create a need in a market saturated by similar products, and distinguished themselves as a choice company among heavy spenders. Hipsters, tech-geeks and people with a penchant for the latest and greatest, swamp in hordes to buy the newest Apple iPhone, seemingly without reservations based on sticker price.
So what is it about the Apple products and their strangely cult-like allure that people are willing to spend upwards of $600 to get their hands on? It isn’t the items themselves; there are already tons of other phones, computers and gadgets saturating the market that will get the necessary done. It’s more. Apple presents itself as an elite, cutting edge company that maximizes the efficiency and functionality of common place devices, while presenting a futuristic, minimalistic design. They manage to repackage the everyday items with more sophistication, and create the perception of better hardware, materials and design.
Despite most of the electronic products being made by Foxconn in China, Apple’s attempt to distance themselves from the suicide-net surrounded factories that manufacture their products by printing, ‘Designed by Apple in California’ on them, probably seems stylish, trendy and first class to most people. But what is the reality of this corporate juggernaut that will soon split its stock into sevens, in a move that has many people wondering what will happen?
It seems that Apple, under Steve Jobs’ leadership, appealed to American consumers, but also took on a very legalistic and authoritarian business style. Telling people what they’re going to have works, if its what they in fact want. In an open market, you can’t sue you neighbor for making the same kind of ice cream as you and selling it at a better price. There are nuances about the recipe, the freshness of ingredients and customer service that can sway consumers, but unless you have practically reinvented the wheel, copyrighting mint chocolate chip just won’t fly in the courts.
Then the world witnessed the “smartphone patent wars” between Apple and the giant conglomerate Samsung. In their peak they had over 50 lawsuits against each other across the globe, and were vying for billions of dollars in damages; each claiming the other had infringed on patents integrated into their technology. It has been argued that Apple is not the innovator that people claim it is, and while what they do, they do nicely, patent violation claims on devices that are essentially the same as everything else, seems like they’re going after mint chocolate chip ice cream.
Many people don’t realize that Apple filed the first of these lawsuits on January 5, 2007; before the first iPhone even came out. Among the many claims was the notion that there was unfair competition. It is difficult to speculate how you can compete fairly before a product has even hit the market, but Apple has claimed as much. It seems regardless of what had been put out, Apple had a strategy very early on about dealing with competition.
As of 2013 Samsung, which uses the Android operating system made by Google on its devices, holds 31.3% of the global smartphone market, while Apple holds just 15.3%. While the external differences are obvious, the technical details and schematics entailed in the lawsuits are of no direct benefit to the average consumer. Sadly, despite all the hoopla about who did what, Apple has not released an innovative product to counter the alleged infringement. If your neighbor starts selling mint chocolate chip and putting you out of business, it’s time to go back to the drawing board, not the courtroom.
Why has Apple chosen to go against the grain of economics and seek legal intervention against its competitors instead of letting consumers vote who’s best with their dollars? Apple’s existence is not for the waging of ‘holy wars’ against its competitors, and the pursuit of such fruitless activities has stagnated the creative powers the company once wielded. Apple is the most valuable company that has ever existed, but despite that, they would rather sue over patents that the average person would consider to be common place in the world of smartphones, then continue to change the game.
In the same email declaring the “holy war”, Jobs warned that Apple was “in danger of hanging on to (an) old paradigm too long.” An interesting notion considering that apple has done very little in the past four years other than re-release and repackage their already well selling brands in different colors with fancy names. It seems the forces in economics and a free market that make retailers become better has stalled with the Apple business model, and despite still boasting billions in revenue, something is clearly amiss.
Article by J. Benjamin
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