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Isn’t Apple A Closet Monopolist, Just Like Microsoft?

Published April 5th, 2005

It also appears to me that with the iPod and iTunes, Apple is engaging in just the kind of predatory behavior you accuse Microsoft of (i.e., refusing to license other manufacturers to produce players that play AAC songs). No surprise there; all corporations strive to be monopolists if they think they can get away with it. So far, Microsoft has simply been more successful.

Now, where do you suppose my friend got this impression? It comes directly from the FUD (fear, uncertainly, and doubt) seeded by Microsoft and its minions who are trying to–but so far, thankfully, failing to–control the world’s digital music with a proprietary format called Windows Media Audio (WMA). An amazingly stupid example of this kind of FUD appears in a Time Magazine article this week called “Attack of the Anti-iPods” by someone called “Time Morrison.” (Do you think his/her first name is really “Time”? But that’s what it says here…) In this article, Ms./Mr. Morrison opens his/her analysis with a breezy reference to “the proprietary digital-music format that joins you at the hip to Apple’s iTunes online store” as one of the negatives of the iPod experience.

Time article attacking the iPodNow, I would have thought someone writing for Time magazine about digital music players would know better. In fact, it’s the fact that they don’t know better that makes me suspicious of their motives. Because, as a matter of fact, Apple does not have a proprietary digital-music format. Apple’s digital music format is AAC, which is an industry standard developed by a coalition headed by Dolby Labs, derived from mpeg-4. (Oh yes, and none of the “A”’s in AAC stands for Apple… another stupid thing some tech writers get wrong. AAC stands for “Advanced Audio Coding”… You can read more about AAC here.) AAC was intended to replace mp3, the popular open-standard format that is still widely used today. Its primary advantages over mp3 are that it can produce smaller files with the same quality, and it is extensible to allow companies to add “ownership” controls, also known as “digital rights management”, or DRM.

The fact is that the company that has a proprietary digital music format is Microsoft, not Apple. Microsoft’s format is known as Windows Media Audio, or WMA. Unlike AAC, which is an industry standard not owned by a single company, WMA can only be licensed from Microsoft, and Microsoft alone gets the fees from that licensing. It costs developers nothing to license AAC for use in software products, and use of AAC as a consumer keeps you from once again tying your technological future to a single company–that is, Microsoft.

The Time writer was being phony on other fronts as well. For example, the iPod can play many formats other than AAC–in fact, it can play virtually all industry-standard digital music formats:*

  • AAC
  • Protected AAC (from iTunes Music Store)
  • MP3
  • MP3 VBR
  • Audible
  • Apple Lossless
  • WAV
  • AIFF

The only format it can’t play is WMA… probably because Apple refuses to license an inferior audio technology (which WMA demostrably is) from its competitor, Microsoft. So buying an iPod in no way means you have to use AAC as your digital audio format. iPods play mp3’s just fine (that’s why it’s often called an “mp3 player”, silly Time writer), and I use the uncompressed AIFF format with mine. AIFF is the audio format that’s used on commercial CD’s (which also come with equivalent WAV files for Windows).

Just for fun, let’s look at the format supported by one of the products Microsoft likes… the Creative Zen, one of the leading iPod competitors:

  • MP3
  • Windows Media Audio (WMA)
  • WAV

Not a very impressive list, would you say? And that last one–IMA ADPCM–is a very low-end compression technique that you would only use if you were trying to get a song onto a cellphone or something. This is more “open”?

Of course, one major implication of what I’m saying is that you don’t have to use the iTunes music store just because you have an iPod. Apple created its ground-breaking music store primarily to give iPod users a legal choice for downloading digital audio files, not as a source of income for Apple. However, most serious music fans will probably continue to buy CD’s and download those to their iPods, rather than relying on any of the download stores for their music. Why? Because the compressed download formats don’t sound as good as CD’s… because they’re compressed for downloading. Compression always removes information from a file… just as a JPEG file loses some of the information from a digital image, and MPEG files lose some information from a digital movie. AAC is probably the best format out there for downloadable music right now, but I, for one, certainly wouldn’t want to be building a permanent collection of music from those downloads.

The only thing proprietary about Apple’s solution is the DRM (digital rights management) system encoded in the AAC files you buy from the iTunes music store. The DRM is needed to protect the music from piracy and was required for the record companies to agree to let their music be downloaded for sale. Microsoft has its own proprietary DRM, as does Sony and others. The thing that upsets Microsoft and the other companies who have had to stand impotent watching Apple take over this space is that Apple has so far refused to license its DRM technology (with the exception of the Hewlett-Packard iPod deal and, presumably, the rumored deal with Motorola for their iTunes music phone). Now, as a consumer, I’d like Apple to license their DRM so that other companies could make and market mp3 players that are compatible with the iTunes music store, and so that other download music stores could sell files that are compatible with the iPod. But I can certainly understand why it’s not in Apple’s interest to do so. And since the iPod and iTunes are demonstrably the very best consumer products for music fans today, I don’t think consumers are suffering any. The only ones suffering are Microsoft, Real, Roxio, Creative, Sony, and the rest.

Apple’s philosophy has always been that you can provide consumers a better computing experience by making both the software and the hardware, to ensure that devices work together properly and that there is coordination among all the parts. Besides the superior usability that results from this, Apple’s insistence on maintaining control of both the hardware and the operation system that runs on it is one reason that making viruses for Macintoshes is so difficult. Now, I won’t get into the long arguments and counter-arguments over whether Apple’s philosophy is correct or not, at this time. But I certainly understand it, and I believe users of Apple products are better off for it.

(If you’re interested in this argument, the best article I’ve read that tackles the issues, both in the context of the Mac OS in the 1980’s and the iPod/iTunes today, is from the Daring Fireball website: “Why 2004 Won’t Be Like 1984“. Highly recommended.)

With respect to the digital music experience, Apple developed and released in 2001 this amazingly clever little hardware device called the iPod. To make it easy to use with your computer (originally just Macs, but both Macs and Windows PCs before long), they developed an amazingly useful little software product called iTunes. One of the reasons the iPod has proven so popular (despite, until recently, its premium price) is that it is so amazingly easy to use, not just within the confines of its little hardware profile (which is amazing all by itself), but more importantly, as an accessory for your computer. Windows users just aren’t used to having hardware and software marry so beautifully as the iPod and iTunes do, and I frankly think it’s opened their eyes a bit to what they’ve been missing in the PC way of doing things. It’s the kind of marriage Mac users have come to expect–and demand–from Apple over the years. Any other combination would simply be less, so why would that be to a consumer’s advantage? (Idea for future essay: If consumers had actually been given an unbiased, man-from-mars choice between the ugly, text-only IBM PC and the elegant, graphically rich, multimedia Macintosh when it was introduced in January 1984, would the PC have had a chance in hell?)

In this context, it’s very important to stress that using iTunes (the software) is not the same as using the “iTunes music store”. The music store is simply an option within the iTunes software. In fact, if you’re a Macintosh user, it’s probably you’re only option, since the other online music stores are Windows-only. Why is that? Why, because Microsoft’s goal is to make sure the only option you have for a home computer is one that comes with Windows preinstalled. By contrast, Apple has developed its marvelous music system to work almost identically for both Macs and Windows PC’s.

Compared with Microsoft’s truly predatory behavior over the last 20 years with respect to any and all competing companies (if you suspect you detect a future essay here, you’re right!), Apple’s behavior since 2001 can hardly be described as predatory. For one thing, Apple created this market… They were there first, unlike Microsoft, who neither created the market for PC’s nor any of the major innovations that caused it to grow. Microsoft just lucked into the PC business. And with the iPod, it’s not like Apple’s running anyone out of business who got there first, as Microsoft so often has. In fact, Apple has been the catalyst for huge numbers of competing products to enter the market in order to topple Apple from its perch. (Based on the conviction, so often expressed by Microsoft boosters, that it’s “inevitable” that Microsoft win the digital music war in the end.) For another, the only “predatee” here is Microsoft, and I’m sorry, but I just can’t feel sorry for a company that insists on trying to dominate every aspect of computing actually losing a battle now and then (well, now, anyway… there’s never been a “then”).

I also take issue with the notion that Apple is a closet monopolist just like Microsoft. I really don’t think every company that goes into business wants to eventually control it all and take over the world. Sure, most companies want to be Number One, but that’s different from wanting to be the Only One. In the case of iTunes and iPod, Apple just got there first with the best product, and they continued relentlessly to improve the product in the ensuing years. Microsoft and its cronies have had plenty of opportunities to unseat Apple, and every few months you do indeed read of some new “iPod killer” that’s going to wipe Apple off the face of the earth. Expectations of Apple’s being mopped up by Microsoft assume that 2004 is like 1984, and that Apple’s “mistake” today is the same as the “mistake” of 1984. Read the Daring Fireball article if you actually still think that. I think you’ll change your mind and realize that (a) the parallels are not really very close, and (b) 1984 wasn’t really a mistake, unless you believe that Apple’s goal should have been to gain a monopoly like Microsoft did.

But whereas my friend just gets his opinions about this from what he reads in the media (which probably isn’t very much on this particular topic), the Time writer–or anyone covering technology issues–should know better. The fact that Mr. or Ms. Morrison continues to spread this kind of baloney in 2005 means that he/she is either very stupid, or is receiving some kind of paycheck from Microsoft.

In sum, let me repeat for those of you who have actually made it all the way to the end of this article:

  1. Apple’s digital music format is not proprietary, but Microsoft’s format is.
  2. iPod users do not have to use the iTunes music store to buy their music.

Open challenge to Time Magazine and information publishers everywhere… do you think you can get that straight the next time around?

P.S. If you’re game for additional reading on this topic, another fine article (with a little more sympathy to Microsoft, I might add) is “WMA vs AAC: The Truth” from Jeff Croft.

* Note: The iPod and iTunes do not yet support the popular open-source audio format Ogg Vorbis, though there’s no technical or monetary reason for Apple not to support it. Let’s hope it gets added to this list in the near future!

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