I was working at Microsoft when the Justice Department lifted the consent decree during the early days of the Bush II presidency. For all the bile traded back and forth during that time, the news was eerily anticlimactic. There was a small cheer and then everyone just went back to their jobs.
But the antitrust charge was a serious threat that held the potential to break up the company. Bill Gates and others argued at the time that Microsoft’s dominant position was always at risk from emerging technologies. Ten years on and we now see that the “bully” Microsoft was perceived to be now finds itself in a market that has largely moved on.
As the worm turns, the next villain in sight seems to be Apple. As Frederic Filloux writes in his latest Monday Note column, Apple seems to have an anti-trust problem. Publishers, in particular, are feeling the squeeze. So much so that there is talk of possible legal action before the European Commission.
The problem, in a nutshell, is the Apple ecosystem as redefined by the iPad. Lots of power now resides in that ecosystem. This has led to a situation where many in the industry simply don’t trust Apple to address their business needs. Some specifics:
The iPad’s sales trajectory has been so explosive that the “joke” in Silicon Valley is that there isn’t a tablet market; there’s an iPad market. If you want to move to the world of digital publishing, this is the device you need to be on.
At present, moreover, the best way onto the iPad is through Apple’s AppStore, if only because native apps offer a much richer experience than web-apps. But the AppStore brings a whole set of its own issues. Filloux says it well:
“Let’s face it, Apple has life and death power over the apps it harbors in its store.”
Given the situation, it’s worth examining the scope of the threat, as well as potential solutions. I think the two are closely aligned. Note that my bias here is toward more publishing options for authors. My ideal is a healthy ecosystem that’s not dominated by any one player.
The Threat Has Its Weaknesses
- As Bill Gates pointed out more than a decade ago, ten years is a long time in the tech industry. Emerging technologies, as yet unknown, may well disrupt Apple’s current position. Faint comfort, that, but worth remembering.
- HTML5 is still in its infancy. As it matures, it will take web-apps to greater parity with native apps. This eases the requirement to go through the AppStore to provide compelling content.
- Amazon is an alternative, albeit with its own set of worries. The Seattle online retailer has been steadily building a compelling alternative to the Apple universe. It is not identical, but that may be its greatest strength. Still, be careful what you wish for.
- Don’t forget Barnes & Noble. B&N doesn’t have the breadth of Amazon’s catalog, but as a book distributor, they have great depth. Don’t stop at books. This is a case where having several friends is better than having one. Books A Million also comes to mind here.
I doubt any of this will prevent concerned parties from lawyering up. But as Bill Gates pointed out, the technology business is highly fluid. By the time the legal system gets there, technology will have already moved on.
The best strategy at the moment is for publishers to get their own houses in order, so they can take advantage of emerging opportunities. That means aggressively embracing new technologies and alternative distribution mechanisms. And building alliances that spread, not concentrate, opportunity.