Is Apple the new Microsoft?

Ten years ago, Microsoft was the company everyone loved to hate.

The most vociferous Microsoft haters slammed the company for being a greedy industry bully that used its monopolistic, clunky, copycat operating system to force software on users and coerce partners into unfair licensing deals.

Don't look now, but the role of the industry's biggest bully is increasingly played by Apple, not Microsoft. Here's a look at how Apple has shoved Microsoft aside as the company with the worst reputation as a monopolist, copycat and a bully.

Apple the Monopolist
The core complaint about Microsoft in the 1990s was that its Windows market share gave it monopoly power, which it abused in multiple ways. Attorneys General and others zeroed in on the "bundling" of the Internet Explorer Web browser, which they claimed was forced on users because Microsoft offered it as part of Windows.

People love iPods (including me; my family of four has purchased 12 iPods in the past few years). But iPods come bundled with iTunes. Want to buy music from Apple? Guess what? You must install iTunes. Want an Apple cell phone from AT&T? Yep! ITunes is required even if you want only to make phone calls. Want to buy ringtones for your Apple phone? ITunes.

Apple not only "bundles" iTunes with multiple products, it forces you to use it. At least with Internet Explorer, you could always just download a competitor and ignore IE.

Not fair, you might say. Any hardware device that syncs data with a PC as part of its core functionality has software to facilitate that syncing. True enough. But operating systems have browsers as part of core functionality, too. Doesn't Mac OS X come with Safari? Doesn't the iPhone?

And "bundling" works. Steve Jobs bragged this week that Apple has distributed 600 million copies of iTunes to date. The overwhelming majority of those copies were iTunes for Windows. And iTunes for Windows' popularity isn't driven by software product quality. ITunes is the slowest, clunkiest, most nonintuitive application on my system. But I need it because I love my iPods.

At least with Windows, you could reformat your PC and install Linux or any number of other PC-compatible operating systems. Can I reformat my iPod and install something else? Can I uninstall iTunes but keep using the iTunes store and my iPods? Apple strongly discourages all that, claiming that the iPod, the iPod software and iTunes are three components of the same product. But that's what Microsoft said about Windows and IE.

Sorry, Dad
Here's a scenario for you. A consumer walks into a local retail outlet to buy a Christmas present for dad. The Apple iPod "section" of the store dwarfs the section where all the also-ran players are displayed. IPod is clearly the trusted standard. The consumer buys a shiny new "Fatty" iPod nano with video.

Dad opens the present and is excited. He follows the directions, installs iTunes and immediately splurges on a few dozen songs at the iTunes store. He loves it, and is an instant convert to portable digital music.

The only downside is that he works out every day at the gym, where cardio machines face TVs that broadcast sound over FM radio. Six months later, when his iPod is stolen, he goes to buy another player -- this time, he hopes, with an FM radio in it. Several competitors offer this feature, but not iPods. He's about to choose a new player with an FM radio when it hits him: None of his files -- now totaling 300 songs and 50 movies -- will play on the new player. He bought and paid for all this content, but it only works with iPods and iTunes.

Apple has an iPod customer for life. Microsoft never had this kind of monopoly power. Sorry, dad. I should have bought you a tie.

Sticker Shock
Another clue that a company has monopoly power is when you find yourself suffering sticker shock. How many times have you stood in line at the theater megaplex and marveled at the chutzpah required to charge $4.50 for a soft drink, when the same beverage is one-third the price at the quickie mart 50 feet outside the theater doors? But -- so sorry! -- no outside food or beverages are allowed in the theater. The theater has a monopoly on soft drink sales, and you'll pay what they charge.

That same shock rippled through the iPhone enthusiast community yesterday when Jobs announced with a straight face that iPhone ringtones based on iTunes songs would cost the full price of the song, plus 99 cents extra. What? The full song costs 99 cents! How on Earth can Apple seriously charge the same amount again for the ability to hear just 30 seconds of the song -- the same length as the free iTunes "samples"?

Apple fully understands the power of monopoly pricing. The company has sold the 8GB iPhone for two prices in its short, three months of existence: $599 and, now, $399. When the iPhone was the only way to get the whole multitouch, big-screen, Wi-Fi iPod experience -- when the product had no alternatives -- the price was $599. One analyst estimated Apple's cost to build an iPhone is $245.83. I don't know if that's true but, if so, more than half the user cost was profit. That's theater soda pricing. But as soon as Apple introduced an alternative to the iPhone -- the iPod Touch -- Apple dropped the price by one-third.

Imagine if another company were allowed to compete in the OS X media player market. These players would all drop to below $300. Don't hold your breath, though; it'll never happen. Apple has the power to exclude all others from software than runs on its media players. Microsoft could only dream of such power.

Apple the Copycat
Ten years ago, Microsoft haters complained that Windows followed the Mac OS to market as a graphical user interface, copying the Mac's features such as folders, trash cans, resizable windows and other elements. That complaint was repeated with each new version of Windows -- Apple was the innovator in the operating system space, and got there first with a host of key features. Microsoft just came along later, duplicated features that Apple pioneered, and reaped the benefit because of its monopoly power.

But who's innovating now? The LG KE850 was winning awards for its full-screen, touch-screen, on-screen keyboard before Jobs even announced the iPhone.

The best thing about the iPhone and iPod Touch -- the warm-and-fuzzy multitouch UI with gestures -- wasn't new, either. Various labs have been demonstrating similar UIs for more than a decade, and even Microsoft demonstrated a fully realized 3G UI in May, well before Apple shipped the iPhone. Microsoft will ship its tabletop UI, called Microsoft Surface, in November, and Apple will likely enter this space with a 3G UI months or years after Microsoft does.

And Wi-Fi in a media player? Ha! Microsoft's funky Zune had that almost a year before Apple did and SanDisk's Sansa Connect with Wi-Fi was released last June. Apple even stole the name for its iPod Touch product, according to HTC, which sells a touch-screen smart phone called the HTC Touch.

Don't get me wrong. I think Apple's execution of these features is far better than its competitors'. And it would be horrible decision-making to not build the iPhone simply because others pioneered key features. But that's not what I'm talking about. I'm talking about Apple doing what Microsoft did: dominating the market with features other companies had first. If it was fair to slam Microsoft over Windows, it's fair to slam Apple over the iPhone and iPod Touch.

Apple the Bully
Microsoft used to be the big bully, pushing everyone around and dictating terms to partners. Microsoft has lost its edge in this regard -- most of Microsoft's major resellers brazenly hawk Linux. Even Intel -- the "tel" part of "Wintel" -- is powering Macs these days. Microsoft is still profitable, but it has lost control -- and has lost its reputation as the bully nobody can say no to.

Meanwhile, Jobs has suddenly become the most feared man in Hollywood, bragging Thursday about Apple's scary dominance in digital media sales. Apple has sold more than 3 billion songs and 95 million TV shows via iTunes. While music CD sales crash and burn, almost one-third of all music sales are now digital. As Jobs euphemistically said yesterday, "iTunes is leading the way."

Although full details haven't been revealed, NBC apparently wanted more "flexibility" to charge higher prices for its TV shows on iTunes. Apple said no, and NBC was sent packing. NBC now plans to sell shows on alternative locations, such as its own Web site and on Amazon.com. Prediction: NBC will come crawling back to Apple and beg the company for inclusion, and on Apple's terms. Why? Because iTunes is increasingly becoming the only venue in which media companies can succeed selling music and TV show.

Jobs rules like Bill Gates never did. If you want to succeed in the digital music or downloadable TV business, you'll do things his way.

Why I Support Apple
After reading my preceding comments, you may be surprised at my next statement: I come not to bury Apple, but to support it.

You see, my point isn't that Apple's growing bad reputation is deserved, but that Microsoft's wasn't. All that evil monopoly hype, court cases and public posturing directed for so long at Microsoft drained energy and resources from the entire industry. The market, however, corrects issues such as that. In the case of Microsoft's "monopoly," Linux, Firefox and now Apple prove that customers always had choices.

The same goes for Apple.

As pundits, bloggers, users, politicians, Hollywood big shots, regulators, lawyers and competitors increasingly bash Apple, accuse it of unfair play and call for legal and regulatory action, I will defend it, as I defended Microsoft. It's fun to slam big, powerful companies that are dominating their markets. But in the final analysis, Apple has earned its growing power and influence, just like Microsoft did.

Is Apple a monopolist, copycat and bully? Yes, and deservedly so. And if anyone thinks Apple's success is a problem, well, bringing in the lawyers wasn't the solution for Microsoft, and it won't be the solution for Apple.

Protecting your iPhone and iPad from Theft

Step 1 – Protecting Your Device First, a few relevant iPhone/iPad security points: Always use the passcode lock: Settings > General > Passcode Lock. This is the most basic of security features, and probably the one I also recommend the most. Most people tend to store emails, contacts, SMS, calendars, and all kinds of other info on their smartphones. In the event your phone is lost or stolen, you’re going to want to ensure that a random stranger won’t be able to get access to your personal information. I also recommend setting it to Auto-Lock after 1 minute. Update your iOS devices: Keep your iPhone or iPad up to date by reguarly applying updated in iTunes. This will ensure you have the latest security patches, and fix bugs such as the one in iOS 4.1 that allowed a thief to bypass the iOS passcode lock and make calls, read emails, etc. Set a SIM PIN: Settings > Phone > SIM PIN > On. This is probably one of the most underused security features (which exists on any phone), and prevents someone from removing your SIM card, placing it in another phone, and making unlimited calls. [Optional] Erase Data after 10 failed passcode attempts: Settings > General > Passcode Lock. This feature allows you to make sure that someone won’t be able to brute force their way into your device. After ten attempts, the iPhone/iPad will erase itself. This one is up to you, as it does create two potential problems. Firstly, it could allow someone with enough time to erase your device (annoying); and secondly if the device gets erased, you won’t be able to track it. I still recommend using this. [Advanced] Use the iPhone Configuration Utility: Apple provides a free iPhone Configuration Utility (Mac/Windows) that allows you to set higher security requirements. These include a longer passcode, less attempts (5) before an automatic wipe, and other security settings. This tool is normally used by Enterprise users to configure company phones, but advanced users may be interested in looking at the options provided. Next, find your device’s Serial Number and IMEI Number (phones only), and write them down somewhere (not on the device), as you may need these at a later date. The IMEI is a unique number used by GSM networks to identify valid phones, and can be used to block lost or stolen devices (this is explained further down).  On iOS you can find these in Settings > General > About. On any mobile phone you can get the IMEI by entering *#06# on the phone’s keypad.

Step 2 – Setting up Tracking When Apple released iOS 4.2, they announced that they were making their Find My iPhone service free to everyone. The service, previously only available to paying MobileMe customers, allows you to geolocate your device, send it messages, or wipe it remotely. To set up Find My iPhone on your device, follow these instructions: On the device, tap Settings > Mail, Contacts, Calendars > Add account. Then, tap MobileMe and sign in with your Apple ID (the account you use for iTunes or App Store purchases), or create a new Apple ID for free. Then, follow the onscreen instructions to complete signing up for a free MobileMe account and activating Find My iPhone. (Apple) For Find My iPhone to function properly, you will need to have Location Services turned On (Settings > General > Location Services). Once you have it set up, remember to log in and test it to make sure it’s working! You should see your device on a map: On a privacy side-note: If you enable Find My iPhone on your device, remember that anyone who can gain access to your MobileMe account will be able to see where you are. If you ever want to disable Find My iPhone, you can do this in: Settings > Mail, Contacts, Calendars > MobileMe Account > Find My iPhone > Off. If your device is stolen when this is off, you won’t be able to track it.

Step 3 – Recovering Your Device So, you’ve gone and lost your iPhone, or had your iPad stolen. Well done! Now we can have fun trying to get it back. First of all… if it’s your phone, have you tried calling it? If it’s a shiny iPhone 4, chances are this will happen, unless Jesus himself found your phone. Stay calm, I’m here to help! If you’ve followed the steps above, you should be able to geolocate your device. For this to work you will need to hope that your iPhone or iPad has an of internet connection (3G or Wifi). As you hopefully tested in Step 2 above, log in to MobileMe to see where your phone is. If you’re still in a bar and your device has just gone missing, or you want to be able to stalk the thief, you can install the free Find My iPhone app onto another (friend’s?) iOS device. At this point you can try to track down and confront the thief yourself (not recommended unless you have backup) – or – file a police report and get them to go pick it up for you. You can also send messages to the phone to try and convince them to return it. And you will be able to track it easily. If you can’t track your iPhone on the first try, keep trying, as sometimes it may be out of signal range or out of power. A thief will probably need to plug the phone in prior to restoring it, so if you’re paying attention you may be able to get his home location just before your phone is erased! Check out these stories of a guy who recovered his phone, and another who recovered his car, using Find My iPhone. See the short video below:-


Step 4 – Recovery Failed: What Now? So now your iPhone’s been missing for a while, and you haven’t been able to track it down. The thief may have turned the phone off, erased it or removed the SIM card. Or the thief is in another country, and you’re getting no help from the authorities (and don’t want to get it yourself). At this point tracking is unfortunately no longer an option, and many people give up. Do not despair, for there is yet hope! If, for some reason, you didn’t set a SIM PIN, the first thing you’ll want to do is inform your phone provider/carrier to disable your SIM and potentially save you many dollars of calls. Next, file a police report and give them your device’s serial number and IMEI (phone only). Thieves occasionally get nabbed with a whole bunch of stolen stuff, this way they’ll be able to return your device to you. You may want to consider wiping your device to ensure that your personal data does not fall into the wrong hands. You can remotely wipe your device from within Find My iPhone, but note that once your device is wiped, you will no longer be able to track it. The final step, to be taken when you’re pretty sure your phone will never return, is to disable it so that it will be useless to anyone else. You can give your carrier your phone’s IMEI, and they can blacklist it, essentially rendering the phone useless (nice paperweight though). At that point if you do manage to get your phone back, however, you won’t be able to use it as it’s not possible to remove a device from the IMEI blacklist (to my knowledge). Note that not all carriers in all countries are willing to add devices to the blacklist. Finally… I hope that this article will help at least one person to successfully recover a lost or stolen device.
If you know anyone who may not be familiar the ways they can protect themselves, I encourage you to share this with them. If you have any questions please feel free to post a comment below, or start a thread in the forums!
That's it for the Todays Blog
But Rest in Next.