Saturday, August 13, 2011

Rotten Apple

Apple Inc is one company I used to admire. They became great by producing great products. Unlike Microsoft, they did not stifle the competition or corner the market in order to climb to the top. Now that Apple has become the largest corporation in the world by market capitalization, it seems that the Apple that I knew has turned rotten.

It now wants to corner the e-book market. There is an ongoing class action suit against Apple and 5 US publisers for price collusion. In the lawsuit, the filing says that "As a direct result of this anti competitive conduct as intended by the conspiracy, the price of eBooks has soared. The price of new bestselling eBooks increased to an average of $12 – $15—an increase of 33 to 50 percent." To add further squeeze to Amazon and Barnes and Noble, it is demanding a big royalty for purchases made through Amazon's or B&N's apps on the iPad. (The good news is that Amazon has now come up with an alternative solution - the Kindle Cloud Reader - to circumvent Apple's attempt to control the ebook market through its apps store.).

Apple has a cash horde of more than US$70bil. It is using this war chest to sue its competitors into oblivion. It has taken Samsung to court for copyright infringement, causing Samsung to withdraw its 10.1" tablet from the market. It is also suing Motorola and others for patent infringements. Clearly Apple is on a rampage. It seems like Apple is suing every major competitor simultaneously. Is this how a great company behaves? I hope this is the turning point for Apple. Perhaps it is time for Apple to be humbled. Stop buying Apple products.

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