Thursday, April 29, 2010

iHate Steve Jobs or Why I Won’t Buy Anything Made by Apple (Yet)

Guest post by Ben today

At the moment it seems that the ascendance of Steve Jobs and the Apple Empire knows no limit. With the media player and smart-phone markets sewn up and their eyes firmly set on conquering the tablet PC market with the omnipresent iPad, it seems that Apple can do no wrong.

But not for me; I can see the Apple vision for the future and it’s a safe, bland, white-chrome corporate hell. Why do I say this? Well maybe it might have something to do with:
  • Apple’s restrictive licensing conditions for the sale and development of apps which basically amounts to censorship and discourages innovation;
  • Their refusal to allow 3rd parties to sell apps; iTunes is it – monopolistic price gouging anyone?
  • Draconian digital rights management – installing unlicensed apps on you iProduct voids the warranty as does ‘jail-breaking’ them;
  • Stupid ongoing court antics with Adobe meaning that iProducts aren’t compatible with Flash;
  • Rechargeable batteries which can’t be replaced;
  • And the thing that irritates me the most: requiring the use of propriety peripherals e.g. iPod shuffles are designed so that you can only use Apple headphones; USB devices or HDMI monitors can’t be plugged into an iPad - you need to purchase a Apple ‘adapter’ first etc.
But these are secondary to my main issue with Apple, which is their pricing policy.

The personal computing market is a good example of a ‘Lemon Market’, that is, a market where information asymmetry is skewed to advantage the producers of goods rather than consumers. Apple represents a particularly egregious case of this by charging premium prices for their products which aren’t substantially different from other competitors in the market (in fact, I would argue they are inferior).

I’m currently in the market for a good quality laptop and one thing that immediately struck me while shopping around for one was that Macbooks are about $1000 more expensive than their equivalent PC-based competitors. And they get away with it. Sure they look pretty, but so what? It’s a tool not a fashion accessory (yes, I know some people do use them as fashion accessories). In an amazing slight of hand, the Apple PR/marketing machine has managed to convince a substantial subset of IT consumers that their computing products are actually worth paying premium prices for.

Why is this? Is this brand ‘tribalism’ of the ‘I’m a Ford man, he’s a Holden man’ variety? Or are Apple products an example of Veblen goods i.e. goods whose demand perversely increases with increasing prices (although it is surprising how many economists are Apple crazy). Whatever the case, Apple is relying on the ignorance of consumers combined with shiny aesthetics to sell people overpriced electronics.

So what’s the moral of the story?

If you’re determined to waste spend money on Apple you’re better off buying Apple stocks rather than Apple products. The US$5,700 you would have paid for an Apple G3 Powerbook in 1997 for would be worth US$330,563 today if you’d bought Apple stocks instead of a computer


  1. I agree with your last point - kicking myself, constantly!

    However, it's not just the hardware you are buying, so when you pay more than a PC you are buying great software! I'm happy to pay a premium for something that works & lasts.

  2. I also don't like Apple.
    But I don't understand why you would recommend buying Apple stock? Surely you think this will crash when most consumers switch on and realize they are being taken for a ride by Apple?
    I don't buy shares in companies I don't like, you shouldn't either.

  3. Ben,
    Alister makes a good point. I think there will be major challenges to Apple from Google and Microsoft of all fronts. In fact, my personal experience is snapshot of the new competitive environment. So I wouldn't be so confident that Apple's future as a company will be quite as successful as its last decade.

    I currently have a Mac laptop, but estimate that it has another 12 months life before it gets too slow and frustrating for me. If Microsoft had not released Windows 7, and Google was not so close to releasing Chrome OS, I would buy another Mac without fuss. My current computer has been so much more reliable (hardware and software) in comparison to friends' and families PCs.
    But now that Windows 7 is looking pretty slick, and with big things from Google's OS, I might be happy to keep the 'Apple price premium' in my back pocket, and run one of these alternative operating systems on amazingly cheap hardware.

    One other advantage of an Apple computer is that they retain value well (due I guess to hardware build quality), so you can generally get a reasonable price for your old machine when you upgrade.

  4. Whilst I predominantly agree with your criticisms of Apple (though not your contempt of their customers), I think it is important to not stack the deck and only bring up their flaws. (I agree with your points about laptops - especially now with Windows 7 which is excellent. Although it's worth pointing out Apple's computers are starting to be competitively priced.)

    One quick rejoinder to some of criticism however. Apple are undoubtedly restrictive to a point, and they are second to none when it comes to marketing. However, if the restrictions outweighed the usefulness or ease of use or quality of their products (sexy and cool iPad included) they would not be the kings of consumer electronics and mobile computing that they now are.

    Moreover, as Steve Jobs just said in a recent email exchange, if you want to watch porn on your phone, that's what a google android phone is for... That is, if there is a niche that the iPhone doesn't cover, both evolutionary theory and economic theory tell us it will be (and is being) filled by a rival. And who says a computing platform must be open and completely customizable? What type of phone do you currently have? Can you install apps and customize it? Can you customize the interface of your DVD player? TV? Apple sells "proper" computers for which you can buy applications directly from third parties. The iPhone, iTouch and iPad are not "proper" computers in the traditional sense.

    But I digress, here are some of the positive points of Apple's impact and their way of doing things:

    Prior to the iPhone, phone manufacturers lived in a comfortable bubble of producing and pushing on to us overpriced and nearly unusable smart phones and PDAs. The iPhone and iPod Touch changed this. They are fast, easy to use and have more functionality than all but their most recent competitors. The lazy and complacent phone manufacturers have finally caught up. The iPad will no doubt have the same effect on the over priced, slow and nearly unusable Windows tablets out there.

    The second PDA owned was a Dell Axim x50. It cost around $650 Australia in 2005. 4 years later I bought my first (and so far only) Apple product, an 8GB iPod touch for $250 Australian. Overpriced computing my @$$. There is no comparison. The iPod Touch (on which I'm currently writing this) out performs the Dell Axim in every way and was 1/3 the price. Whilst it's unfair to compare them to a point, it's worth noting that you can still buy (if you have some kind of perverse self loathing) a HP iPaq "classic" PDA running windows mobile 6 for $450! (Search for it at

  5. Having owned (and loved) three Windows Mobile PDAs, I still am able to recognise they were slow and necessarily complicated. Their only advantage over my iTouch was that I could get right into the OS and customise the hell out of them. But I was pretty much the only person who I knew that was able to do this (I taught at a school that rolled out PDAs for over 100 teachers and students as a trial and most people could barely use them - they've since moved to netbooks). Now whilst I'm someone who likes to tinker, which I could do with Windows Mobile, and I don't like the fact I can't do too much with my iPod touch, I sure as s... wouldn't go back.

    The app store is the single best thing about the iPhone, iPad and iPod ecosystem. To purchase software, most of which is $1.19 to $3.99 Australian, I only ever have to provide my credit card details once. Moreover, so far there literally has been 'an app for that' for everything I've thought of with one exception (using an iPhone as a wifi router to tether a laptop - which is why my next phone might well be a Nokia which can do this). I've spent probably over $100 on apps in the last 6 months, from 3-D FPS to Word processing apps, Dr Suez story books for my kid, etc. With over 150K apps and an INTERNET BROWSER, it's laughable to claim a discouragement of innovation and censorship. The biggest area of software innovation is happening in the Apple App store (and the Android Market).

    And Doctrow's whole CDrom analogy is a joke. CDroms that delivered content lost to the web because the web could offer richer, more easily accessible and interactive content for free or next to nothing. If apps are the equivalent of CDroms then the same thing will happen to them. So far Apps are doing okay...

    Moreover, CDroms were the best way of delivering software APPlications to a PC. They are not used for this purpose anymore because now the internet is the best way of delivering Apps to PCs (and phones). Either way, in the CRrom days we were all using applications on PCs, and in the post CDrom world we're still using Apps on PCs (and now on phones too). It's just the delivery method that has changed.

  6. The App store has made finding software, paying for it and installing it as seamless a process as possible. Brilliant and again, as before, it has forced all the complacent and lazy phone manufacturers to responded in kind. The supposedly restrictive nature of developing apps for Apple is really blown all out of proportion. There's over 150k apps, almost always 'an app for that', and if you are knocked back you can still develop for other platforms or produce a web app that will run in mobile Safari, so Apple will have no control over it whatsoever.

    I'm no apple fanboy. As I said, this iPod touch is the only Apple product I've ever owned. I have many gripes too, things Apple could easily change that would make life easier. For example, at home I do most of my web-browsing on my my iTouch. It's far more convenient than booting up the hefty laptop and the browsing experience is better in many ways. Unless I'm word-processing or doing some other form of content creation I wouldn't turn on my computer. The main reason I turn it on is to sync to iTunes. I hate having to use iTunes on a windows computer - the slowest piece of crap ever. I would love for Apple to allow us to unshackle or portable computing devices from our computers. But overall the positives far out weigh the negatives, so I'm prepared to put up with this.

    The thing I really don't understand in the whole Apple v Microsoft v Google v Linux fanboy battles is why people care so much about any brand as to provide vitriolic support for or against them? No one forces anyone to buy any of these products? Bring in the "Apple haters tribe" is no different than being an Apple fanboy. By all means, criticize their faults, but recognise their positives too. And try to avoid inflammatory and condescending language ("consumer ignorance"... really?). After all, more often than not I find calling someone an "iDrone" says far more about the insulter than the insultee.

    FYI, I wrote the initial version of this on my iPod Touch on the train trip home for work using an App called NoteMaster, which cost $5.99 (one of my most expensive purchases). I arrived home, hopped on the WiFi, opened NoteMaster, clicked sync and this note "magically" appeared in my Google Docs.

    Whoa! That's way too much. Plus, while writing this last bit I just bought Flight Control, a game that cost $1.19, is highly addictive and has made an Australian developer rich thanks to 2 million downloads in just over a year. Damn those evil Apple SOBs!

  7. Thank you Theo for being rational.

    Ben the wisest thing you said was 'Yet'. As you will one day buy an Apple product and become a big advocate. Those of us that already expect great things from Apple still get blown away. You expect nothing but evil. Your revelations will be great.

    Now this debate is not worth having with you as in my opinion before one reviews a product or products they should actually use them exclusively for at least a week. You read like al of your opinions/observations come from reading too many (anti-apple) PC Blogs. Just how much time have you spent with an apple product?

    And what about choice. Before you compare Apple's growth to that of a rising empire with a ruthless leader remember that people who own an apple product chose to own an apple product. There was no threat of loosing their families, their lives or having there women raped to breed out the Microsoft products in them.

    Your dot points...
    1. As an end user I have not experienced the negatives you suggest. When I buy an app I can have the confidence that it is virus free, 99% likely to work without any bugs that are going to render my system unusable, etc, etc. And as for censorship. These devices are being used by children... something is required for this. Innovation? Again, have you used and iPhone, iPod Touch or iPad for any length of time to give a proper review.
    2. Like Theo said. The app store is making developers rich. Apple only takes 30% and with this 30% they provide all the infrastructure to make it stupidly easy for a developer to upload their app and start selling it to a massive market place that has never had a more convenient method to pay a developer for their work. I would think that this helps keep piracy at bay.
    3. The benefits far outweigh the disadvantages. It would be interesting to find out how many happy developers in the app store there are compared with those unhappy 3rd party developers outside the app store. Also apple is not saying that these developers cannot develop their apps. A 3rd party developer can develop for a different platform.
    4. Your lack of understanding for the Flash situation is more than I have time to address here. It requires you to understand the web better. HTML5 is the future that will leave flash behind. Do some reading.
    5. Facts my friend. The batteries can be replaced. Just not user replaced. But for the same price as the replacement battery. Apple will do it for you and ensure that the battery is disposed of properly. Apple's batteries also hold more charge and have a longer life span. Seriously... did you research anything before spitting this crap out.
    6. The iPod Shuffle does require an adaptor for 3rd party headphones but again. If an iPod Shuffle is not the perfect product for you, don't buy one! HDMI... lets address that concern after they put in Firewire 800. Where's my Firewire 800?

    As for pricing policy. You get what you paid for. My parents keep buying Windows based laptops because they are cheaper. But we recently worked out that they buy 3 to 1 Windows laptops meaning that they end up spending more on 3 laptops so as to match the life span of an apple laptop. They would have saved money and downtime by buying the apple in the first place. As for marketing. Apple's marketing is backed up by positive user experience and rave reviews by people that have actually used the products. Not to mention that Apple's biggest marketing push is lead by it's users. And worst comment of all... When it comes to consumers you assume ignorance.

  8. I knew there would be some solid defence for Apple computers/pods/phones etc out there. All good points Morgan - these are the reasons Apple has such loyal customers - reliability, durability, exceeding expectations, usability. Sometimes the hardware could be a little faster, or you might get more hard drive space for you dollars elsewhere, but I give credit to Apple for creating a 'user experience'.
    Go on Ben, get an Apple - 15inch MacBookPro will do the trick every time - and you get 10% discount if you're a student.