Apple's relationship with the press, customers, and dealers
tliet
– March 20, 2008 05:34AM
Although we don't live in the Apple is beleaguered times anymore, there's still enough to be said about them...
Transplanted once again...
The Gay Blade - 05:54pm Mar 31, 2000 EST
The Blade will attempt to transplant yet another rhetorical sapling here
on the Spork boards by copping a page from the delightful Brian Miller,
writing eloquently on the superannuated boards of yesteryear:
Brian Miller - 03:07pm Sep 30, 1999 PT
The man with a plan
My recent PowerBook G3 fiasco notwithstanding, I am beginning to wonder if
Apple is planning on abandoning "small fry customers." Consider the
evidence:
1) Apple's war with the Macintosh press;
2) Apple's slashing and burning of small local dealers, who often provided
the best service "in a pinch";
3) Apple's continued horrendous customer service breaches (individual Apple
Store orders cancelled in favour of large educaction/business orders).
Pulling all this evidence together and analysing it makes me feel far more
"worried" about Apple's future than any time under Amelio. Consider, for
instance, what all of those resources spent on lawyers threatening tiny Mac
sites could do in customer service and relations.
Before we consider Apple's "invasion" into the Fortune 1000 enterprise to
be ready, we have to focus on Apple's status in its own current markets. In
my view, there's a lot of "retrenching" to do before they're ready. They
can start by ceasing their intimidation of Mac publishers, letting the damn
Mac rags publish OS 8.6 on their cover disks, and spending a bit more time,
effort, and energy on a "satisfy the customer at all costs throughout the
organisation" policy. These are all core competencies they'll need before
they can even THINK of invading the big-enterprise space.
[/quote]
John Willoughby
– April 12, 2012 03:51PM
Homo Sapiens Sedentarius
>Jobs also told one of the execs that he should, "Throw in with Apple and see if we can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99."
Sure. Amazon was selling books at $9.99. The publishers were unhappy with this and wanted to sell at higher prices. Apple, exploring entering the field, learned this. Apple then pitched them a bookstore that would let them set the higher prices that they desired. How is this illegal?
Cloudscout
– April 12, 2012 04:06PM
˙pɹɐoqʎǝʞ ʎɯ ɥʇıʍ ƃuoɹʍ ƃuıɥʇǝɯos sı ǝɹǝɥʇ ʞuıɥʇ ı ?ɹǝʇndɯoɔ ʎɯ ɥʇıʍ ǝɯ dlǝɥ ǝuoǝɯos uɐɔ
Yeah, CNet seems to be the only one riding that train. All other coverage tends to describe the DOJ's chances for success using terms ranging from "likely" to "slam dunk".
ddt
– April 12, 2012 04:17PM
An author's take is dependent on the overall take, so that is part of the equation. When books are sold at or below cost, the author sees nothing from any sales.
And what JW said. As we remember from the MS antitrust case, you first have to prove 1) monopoly and 2) that it's not a "natural" monopoly. We're not there yet.
ddt
John Willoughby
– April 12, 2012 05:12PM
Homo Sapiens Sedentarius
I could see price-fixing, at least against the publishers, and maybe against Apple. I don't understand antitrust against Apple. I don't think iBooks is taking the world by storm.
Cloudscout
– April 12, 2012 06:03PM
˙pɹɐoqʎǝʞ ʎɯ ɥʇıʍ ƃuoɹʍ ƃuıɥʇǝɯos sı ǝɹǝɥʇ ʞuıɥʇ ı ?ɹǝʇndɯoɔ ʎɯ ɥʇıʍ ǝɯ dlǝɥ ǝuoǝɯos uɐɔ
Quote
ddt
An author's take is dependent on the overall take, so that is part of the equation. When books are sold at or below cost, the author sees nothing from any sales.
And what JW said. As we remember from the MS antitrust case, you first have to prove 1) monopoly and 2) that it's not a "natural" monopoly. We're not there yet.
ddt
Under the agency model, the publishers were supposedly getting less from each sale but authors were getting more?
As for how Apple's actions were illegal, I suspect there are two angles to that. First, they knowingly encouraged a group of would-be competitors to form a coalition with the sole intention of controlling prices. Second, they did this by taking advantage of their existing monopoly position in the digital music sales market and exploiting that power to dictate control over a new market.
That's my theory, anyway. I'll be interested in seeing how this shakes out in court.
Jeff Cooper
– April 12, 2012 06:19PM
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Cloudscout
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ddt
An author's take is dependent on the overall take, so that is part of the equation. When books are sold at or below cost, the author sees nothing from any sales.
And what JW said. As we remember from the MS antitrust case, you first have to prove 1) monopoly and 2) that it's not a "natural" monopoly. We're not there yet.
ddt
Under the agency model, the publishers were supposedly getting less from each sale but authors were getting more?
As for how Apple's actions were illegal, I suspect there are two angles to that. First, they knowingly encouraged a group of would-be competitors to form a coalition with the sole intention of controlling prices. Second, they did this by taking advantage of their existing monopoly position in the digital music sales market and exploiting that power to dictate control over a new market.
That's my theory, anyway. I'll be interested in seeing how this shakes out in court.
Antitrust is not at all my field, but I have to say this sounds plausible.
John Willoughby
– April 12, 2012 06:49PM
Homo Sapiens Sedentarius
I think that you'd have to establish that the publishers weren't already talking about Amazon's dominance of the eBook market, and that they weren't already maneuvering to try to force the agency model on Amazon. My memory of the time was that they were very public about their annoyance at having their books sold at cut-rate prices to improve Amazon's market share. I'd be surprised if they didn't discuss tactics for remedying the situation even before Apple showed up.
James DeBenedetti
– April 12, 2012 09:28PM
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Cloudscout
Apple acted in concert with five major publishers to artificially fix prices for their products at a mutually agreed upon amount.
Can you find a clearer example of illegal price fixing?
Umm... the Supreme Court
ruled back in 2007 that price fixing between manufacturers (publishers) and retailers is legal. It's common in many industries (e.g.,
consumer electronics). The DOJ has no case.
Cloudscout
– April 13, 2012 05:57AM
˙pɹɐoqʎǝʞ ʎɯ ɥʇıʍ ƃuoɹʍ ƃuıɥʇǝɯos sı ǝɹǝɥʇ ʞuıɥʇ ı ?ɹǝʇndɯoɔ ʎɯ ɥʇıʍ ǝɯ dlǝɥ ǝuoǝɯos uɐɔ
That decision was a completely different scenario as it dealt with an individual manufacturer dictating the prices of their own products (like Apple has been doing for a long time). They weren't combining forces with the manufacturers of competing products to do so across an entire industry.
JW's point is the only hope Apple has of fighting this. The problem is, while the publishers had been secretly meeting for a while, action wasn't taken until Apple entered the picture and the cartel was complete.
The publishers are screwed. I can't see how they would have any chance of winning (and, obviously, three of them realized that).
Apple? It's going to be an interesting battle for them. No matter what, it's the end of their 30% margins on iBooks.
Keep in mind, there is still the lawsuit by the 16 states as well as an ongoing investigation by the EU to contend with.
johnny k
– April 13, 2012 06:23AM
Amazon is actually trying to innovate in the publishing industry. It singlehandedly created the e-book market and has experimented with different forms/price points. I'd be wholeheartedly be behind it if it weren't for their proprietary format. Why did publishers let Amazon do that? ePUB/HTML needs to be the format.
Cloudscout
– April 13, 2012 08:39AM
˙pɹɐoqʎǝʞ ʎɯ ɥʇıʍ ƃuoɹʍ ƃuıɥʇǝɯos sı ǝɹǝɥʇ ʞuıɥʇ ı ?ɹǝʇndɯoɔ ʎɯ ɥʇıʍ ǝɯ dlǝɥ ǝuoǝɯos uɐɔ
The publishers let Amazon do that because they wanted DRM and ePub didn't exist when the Kindle was being developed.
Sony was actually first out of the gate with an ebook reader which used their own proprietary ebook format. As a matter of fact, I was an early adopter and bought that first model back in 2006. Sony eventually moved to the ePUB format, though which means I can now read all of my Sony Reader books on everything... except for an actual Kindle device.
Sony's marketing for their ebook readers sucked, though. And their ebook store was utter crap.
Amazon's execution was vastly superior to Sony's.
I think Barnes & Noble tops Amazon from a customer perspective and I've read that they have more than a quarter of the ebook market at this point. I hope they survive the current turmoil.
John Willoughby
– April 13, 2012 08:51AM
Homo Sapiens Sedentarius
I had a Sony eBook reader as well, and I think that "utter crap" is a very complimentary description of their store.
I'm devoted to Kindle and Amazon at this point. I've sunk too much cash into their store to leave. I do most of my actual reading on the Kindle app for the iPad, and the web-based reader has been handy on several occasions.
If I was starting from scratch today, I'd look hard at the Nook, because I think it's better hardware than the Kindle devices. But Amazon had a lot more books than iBooks last time I checked, and maybe more than B&N. I guess it would depend on how good the B&N reader apps are.
[EDIT: Besides, I own Amazon stock. And it's down, dammit!]
Edited 1 time(s). Last edit at 04/13/2012 08:52AM by John Willoughby.
James DeBenedetti
– April 13, 2012 09:07AM
CS, deciding how to price your product (e.g., wholesale vs. fixed retail with a fixed commission) is not a form of collusion - even if everyone in the industry does it the same way. If you'll recall, there was some confusion following Apple's introduction of iBooks because some publishers wanted the "agency" model, while others didn't, with the result being that Apple & Amazon had a different mix of publishers until each individual company found the approach that worked best for it. The DOJ doesn't have a case - it's just that some publishers don't care enough about the pricing model to be interested in fighting a lawsuit over it.
Johnny - Amazon is trying to do the same thing to publishers that Apple does to its suppliers - squeeze their margins to nothing. If brand new bestsellers never cost more than $9.95, that makes it difficult for publishers to charge more than that for any book. Once that ceiling is established, Amazon can ratchet it down each year - especially if it has driven physical bookstores out of business, and has enough sales volume to get better pricing terms than its online competitors. That may be "innovation", but won't necessarily result in a better outcome for book purchasers.
The reason publishers let Amazon use a proprietary format is because they don't have the technical infrastructure necessary to invent and maintain a DRM system of their own, plus consumers have no interest in maintaining separate DRM accounts with every publisher they purchase from.
Cloudscout
– April 13, 2012 09:54AM
˙pɹɐoqʎǝʞ ʎɯ ɥʇıʍ ƃuoɹʍ ƃuıɥʇǝɯos sı ǝɹǝɥʇ ʞuıɥʇ ı ?ɹǝʇndɯoɔ ʎɯ ɥʇıʍ ǝɯ dlǝɥ ǝuoǝɯos uɐɔ
Quote
James DeBenedetti
CS, deciding how to price your product (e.g., wholesale vs. fixed retail with a fixed commission) is not a form of collusion - even if everyone in the industry does it the same way.
If the decision was made organically and independently, that could be true. In this case, it isn't. The decision was made as a group and it wasn't limited to choosing between the agency vs. wholesale model. They made an explicit decision to conform to a specific price point.
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If you'll recall, there was some confusion following Apple's introduction of iBooks because some publishers wanted the "agency" model, while others didn't, with the result being that Apple & Amazon had a different mix of publishers until each individual company found the approach that worked best for it. The DOJ doesn't have a case - it's just that some publishers don't care enough about the pricing model to be interested in fighting a lawsuit over it.
Not quite. Macmillan was the first to hit Amazon with their Agency Ultimatum and Amazon responded by dropping Macmillan titles. Amazon eventually gave in when the rest of the cartel flashed their guns. Part of the DOJ's case even references the private emails between the CEOs of these companies when they discuss the need to help Macmillan. I believe their words were something along the lines of, "Macmillan is being brave but I'd like to see how Amazon will react to 3 or 4 of the big guys.”
The top 5 publishers acted in concert with Apple to exert an unnatural influence on ebook pricing. There is nothing ambiguous about that fact. The publishers don't stand a chance. Apple was entirely complicit in the arrangement but we'll have to see how the law applies to their role since they aren't actually a publisher themselves.
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The reason publishers let Amazon use a proprietary format is because they don't have the technical infrastructure necessary to invent and maintain a DRM system of their own, plus consumers have no interest in maintaining separate DRM accounts with every publisher they purchase from.
Again, Sony and Amazon started out with proprietary formats because there were no open standards available at the time. Sony eventually moved to the ePub format once it was mature and now that is the standard used by all non-Amazon and non-Apple ebook stores... as well as public libraries. It doesn't inherently require maintaining separate DRM accounts with every publisher either. Most ebook stores have settled on Adobe Digital Editions and their ADEPT standard for DRM. I have one account that handles the DRM for my Sony and B&N books.
Tony Leggett
(Moderator)
– April 17, 2012 02:25PM
Yeah, a mild-mannered Samuel Jackson is wrong as say Chuck Norris doing a Sex and the City episode...
Jeff Cooper
– April 26, 2012 10:48AM
I noticed when I was in the Indianapolis Apple Store last night that they had
replaced the iMacs at the kids' tables with iPads. This actually made me kind of sad. It's another step, in a long series of steps, de-emphasizing the Mac in favor of iOS devices. My kids spent endless hours at those kids' tables, dating back to the days when they featured eMacs, and as a Mac devoté I'm going to miss them.
El Jeffe
– April 26, 2012 11:01AM
What a journey.
I agree. But I am an iOS hold-out. I do not use any iOS device. Likely I'm the only person on these 'Mac' boards that can say that????
Cloudscout
– April 26, 2012 11:11AM
˙pɹɐoqʎǝʞ ʎɯ ɥʇıʍ ƃuoɹʍ ƃuıɥʇǝɯos sı ǝɹǝɥʇ ʞuıɥʇ ı ?ɹǝʇndɯoɔ ʎɯ ɥʇıʍ ǝɯ dlǝɥ ǝuoǝɯos uɐɔ
Well, I can't say I'm a hold-out since I did use an iOS device for two years but I don't anymore.
Once Snow Leopard is completely EOL, we'll have to see if I remain a Mac user as well.
Tony Leggett
(Moderator)
– April 26, 2012 04:21PM
I'm hoping Mountain Lion might fix up some of the "quirks" of OS X
Vista er, Lion.
I do have to admit I'm pretty damn happy with my iPad,
Air Video run with Air Play through the Apple TV effectively jailbreaks it.
And I'm totally hooked on this
'lil timewaster...
