Apple's Software Strategy Is Intriguing

from the battling-Microsoft dept

Dan Gillmor presents his take on Apple’s software announcements from earlier today, saying that they’re increasingly encroaching on Microsoft’s turf. He points out, though, that as the dominant player in the relationship, the decision as to whether or not there’s a “divorce” between Microsoft and Apple is almost entirely up to Microsoft. He still thinks Apple has a ways to go before making their software strategy really competitive – but they’re clearly on their way. I agree with a lot of his points, and think that it’s never a bad thing to have more choice in the marketplace. I disagree with Gillmor’s assertion that Apple should charge for their browser, because that’s just bad economics and bad competition. Very few people will pay for something when “good enough” solutions are free. His argument that a version that costs money stimulates competition makes no sense whatsoever. How does a product that is priced above what the market-rate is stimulate competition?

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Comments on “Apple's Software Strategy Is Intriguing”

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Steve says:

Puzzling comment on charging

Yeah Gilmour’s comment on charging for the browser was puzzling. My guess is that it’s at least in part to stay consistent–if you’ve criticized Microsoft for giving away IE as a means to kill competition, you have to criticize Apple for the same thing.

How Apple charging for Safari makes it “more feasible for Web-browser competitors to innovate” is beyond me. Of course if Jobs could charge for Safari and make some money he would. The simple answer is that in order to get access to a very tight, fast HTML rendering engine, they needed to tap the Open Source community and the KHTML rendering engine. Charging for software that uses Open Source components is dicy at best. And there’s plenty of innovation going on and as a good Open Source member, Apple will help too in releasing any changes they make to KHTML engine. IE is not nearly the best web browser–there are plenty of others that are smaller, faster, more featured, more standards compliant, and cheaper (well, more free)

You do have to admit thought you can’t really talk about web browswers being “market priced.” Pretty much all existing economic models break when price approaches or equals 0.

Mike (profile) says:

Re: Puzzling comment on charging

You do have to admit thought you can’t really talk about web browswers being “market priced.” Pretty much all existing economic models break when price approaches or equals 0.

Not at all. You’ve hit on my pet peeve. Economic models do not break down at all when the price hits zero. Why everyone thinks so is beyond me.

If the marginal cost to produce another copy of the product is zero, and there’s a truely competitive market, the price will be forced to go to zero. That’s market economics at work.

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