Fight the good fight against Cargo Cult Capitalism.

These people have no understanding about why the iPod and the iTunes Music store were such a success. What they never saw was that Apple created a music player which was good enough for the mass of people to use and an easy, secure, cheap and convenient means of delivering that music. Furthermore, Apple created a marketplace where there wasn’t one before.

It’s Apple’s marketplace; they have a right to protect and defend it for the benefit of their customers, the producers of the music and themselves.

The business model was so successful that Apple would be foolish not to extend it. It was said, as of two years ago, that Apple wasn’t making any profit from the store. I seriously doubt if that is true now.

These above people were probably the same bunch who dismissed the possibility of success for the iPhone. They never saw that Apple built on the success of the iPod. It used the iPod’s economies of scale to keep down the iPhone’s cost. I seriously doubt that the above people expected the App store to do well. It has had a phenomenal growth in a short period. I seriously doubt that the trend is ending.

Do I expect that Apple will create a tablet, eventually? Sure. My only doubt has been about the size.

A 10 inch tablet seems unwieldy in a 5 by 8 inch format. I would rather have a 4 by 6 inch back pocket sized tablet having a higher resolution screen than the one used on the iPhone. 220 dots per inch would make it small enough to be a true hand held.

I couldn’t guess which form factor Apple will choose, but I don’t expect to see anything before Snow Leopard 10.6 is released in September and the Christmas buying season starts in October.

The point is that Apple is likely to continue to build upon its successes. Apple is building a new Data Center in North Carolina, so I expect a huge increase in downloads.

The App store, like the iPhone, is very new. I would expect that eventually Apple’s competitors will get their act together and provide a viable alternative to it and the iPod.

Capitalism doesn’t work very well without competition. It is hardly Apple’s fault that they out did their competitors so well that they drove them out of business. It’s what successful companies do.

So long as Apple has no means to keep out competitors then they will arrive. The only way that a competitor can overtake Apple is to provide a better product thus forcing Apple to match or exceed them. Apple needs to be challenged, but it’s competition is likely to be someone new rather than Microsoft or even Google. Both have serious baggage.

Who knows? An audiophile’s music player may be one means to compete against apple, so that Nicholas’ audiophile needs can be met. Free and open markets are not perfect, especially when they are as new as the app store. They are merely better than any alternative.

Ha! Well, your post consisted of bald assertions and appeals to personal experience, so I think I’ve still got you beat in the evidence department. And ycombinator is hardly to be dismissed as a mere anecdote. A company that invests in small software startups is a better indicator of the industry’s health than any individual developer’s experience might be–and they seem to still expect a high success rate. Moreover, its forum is the buzz site for smale scale software entepreneurship, at least on my radar. I’d say it’s the most relevant possible community to the discussion. Certainly more relevant than Chicagoboyz.

The message of the anecdotes is this — I follow the small business side of the software industry. I mostly care about games, but ycombinator is pretty broad. And the story you’re telling doesn’t match the one I’m seeing. You say money can’t be made on the desktop, but I see a lot of folks doing it anyway. You say piracy is the major thing that’s changed in the last 10 years, but that’s not what the folks struggling to survive say they grapple with. They talk about a competitive market and technological churn and the need for innovation and mundane running-a-business challenges, not piracy.

So consider Moonpod more of a counterexample than an anecdote, representative of a class of counterexamples. I consider them a typical, if strong, example of what a successful, small indy games company looks like. You presented that as an okay pursuit for high school students, by these are 18-year industry veterans; they shouldn’t exist. The company is three guys, quite vulnerable to piracy, targeting the desktop, literally betting their livelihood one one flagship product at the start. They’re doing everything wrong, and yet–while the market is tough–they apparently did okay since they’re still around. And there’s Caravel.net, and Introversion, and on and on. Heck, Braid was a one-man show. The market’s not what it was in 1992, but money still seems to follow innovation okay, and small companies can still succeed.

Now, I know you wanted to discount games entirely from the discussion, but you gave the lamest possible excuse for doing so. Seriously, it amounted to, “You can’t count the games industry. Games are easy to produce and mostly about graphics, at least according to game engine advertisements.” Look, you can’t make a successful game with the cheap no-programming engines, no matter what the ads say–those are for novelty products and completely starved and captive platforms (like iPhone!). A mature market like the desktop is far too competitive for such a cookie-cutter approach. Big companies license serious engines for six or seven figures, and bring even more expensive technical resources to bear in customizing the game further. Small game companies can’t do that, and have to be brutally innovative to stand out; even if they do use an engine, there’s a lot of programming still involved. The norm is several months of work by two to four developers, not a hack job by a couple artists. And successful games look more like Darwinia and Auditorium than This Week’s Platformer Re-Skinned With Zombies.

So in spite of your dismissal of games in general, I think indie games do stand as a counterexample. Money can still be made by small companies targeting end users on the desktop, piracy notwithstanding. But you have to be very innovative and very good.

Now, no one contests that that market’s tougher than it used to be. The absolute flood of shareware products that was the way of the 1990s has slowed to a few superstar offerings per year. Why is that? You blame piracy, but the numbers don’t bear that out. In the United States, the software piracy rate is 20%, meaning 4 out of 5 copies are legitimate. Most of the developed world weighs in no higher than 30 or 40%. The worldwide numbers look bad, but seriously–was your target market Nigeria? Who was even selling to China in 1992? Not the bedroom programmers, that’s for sure. Moreover, software piracy, both worldwide and in the developed world is getting better, not getting worse when you look at rates instead of raw lost revenue and adjust for methodology. Even if the raw lost revenue numbers keep growing–and that on shaky assumptions–the market is growing faster. Yeah, piracy is a problem, but it’s less of a problem than it used to be, and the legitimate market is bigger than it was ten years ago. Way bigger.

In particular, the tax of piracy isn’t really worse than the tax of Apple. When you develop for the desktop in the US or Europe, pirates take 20-30% of your installations. When you develop for iPhone, there may be few pirates, but Apple takes 30% of your revenue. That’s at best a wash. Practically, the open market’s a better deal; it’s a bigger market, the rate’s a little lower, and the losses aren’t equivalent. Apple’s guaranteed to take 30% of legitimate sales, but even perfect DRM wouldn’t convert all of the desktop’s thefts into sales. A lot of folks who steal weren’t looking to buy.

Why is the desktop tougher than it was ten years ago? Two reasons, in my opinion.

First, the platform is much more mature. Any industry goes through a phase of heavy innovation and investment by many parties–a gold rush–and then matures into a few key big and little players. When the desktop was brand new and no one knew what would work, bedroom programmers could hack together something competitive. With established processes and techologies, with the market mapped, with resources allocated and everyone aware of how lucrative things are, it’s a tougher field. That always happens. Two guys on a hill may have started aerospace, but they couldn’t compete with Boeing these days. There are little companies that can, but it takes extreme excellence and innovation. The automotive industry once looked like iPhone apps do now, but over time it got so small players had to be someone special to have a chance. Heck, it even happens in science–young fields are easier to make a splash in. Why shouldn’t it happen to software? What you’re seeing on the desktop is a very natural phase of growth: the transition to a tough, mature market. That’s not really something that can or should be fought.

Second, the platform is not only mature, it’s actually dying. Or rather, shrinking down to its natural size. Applications are moving to the web. Not quickly, probably not completely, but . . . more and more. What AIM/ICQ was a generation ago, Facebook and its ilk are now. Moonpod five years ago looks like Auditorium this year. Quicken is a web app now–did the 90s see that coming? Google wants everything in the cloud; Microsoft has moved Office to the web. It’s a natural home for a lot of applications. And not mainly to avoid piracy, either–that’s really reason number three or four. The pull of the web is its broad reach: developing for the browser is so cross-platform it’s silly. There is no installation, no physical media, no troubles reinstalling on separate machines. The app is simply there, ready to be used at a moment’s notice. Free trials are easy. Micropricing is easy. Deployment is instant, development cycles are fast. The market is huge and easy to get to. Oh yeah, and software on the web is harder to steal. Sure, there’s a performance hit, but performance isn’t the big deal it used to be. Moore’s Law has been quietly dying of economic causes: computers simply got as fast as we needed them to be. A few niche markets will remain for the desktop: computation-intensive, security-intensive, infrastrutural things. Everything else is going to the web.

This, too, is a completely natural process. You want to discard web apps as a completely different market, but this is an incorrect approach. That’s like ignoring the web while discussing the cause of death for the newspaper industry. Look, the web isn’t really killing the newspapers, and it’s not really killing desktop software. Rather, it’s what those things are evolving into. It’s not a different industry; it’s the same stuff being done in a different place.

Now, I know that’s overstating it. The Web App vs. Native Software debate is still roaring, and nobody can say for sure how far the web will go. The position I’ve stated is strong, but far from uncommon. But you really can’t ignore web apps when talking about why developing for the desktop is hard these days. That’s just an inherently inaccurate approach.

To come back to the Apple App Store and your original point, even if the main effect of the App Store were countering piracy, it’s overly heavyweight for that. There are a few ways to do DRM, and a third party application as a gatekeeper bundled with some serendipitous functionality is one of the more effective and palatable ones. Steam does it in the games industry on the desktop, and it works pretty well. But Apple’s approach goes way beyond that, walling off the market, charging a fee for entry, and asserting fiat control over who can compete. You associate the present gold rush with that control, but I submit it’s just the gold rush associated with any new and starved platform–like the home PC in the early 90s or the web in the late 90s. You would see that rush no matter what Apple did. Whether its policies help is hard to judge from here; it attracts you, but I wouldn’t touch it with a ten foot pole.

I say the authoritarian approach actually retards the platform’s growth. Even if I wanted to get into native development on a niche platform (which I don’t–I consider it a blind alley!), I sure as heck wouldn’t do it under Apple’s rules. There’s a real risk that if I invented something good, Apple would shoot the app down and say, “Sorry, we were going to do that–no competition, please.” A cursory look at the blogs of the developer world reveals that I’m hardly isolated in that. And repelling developers cannot be good for innovation or the platform.

As I see it, sure, there’s a gold rush on, and if you’re good and lucky–and quick!–you can ride the iPhone to make a quick buck. But it’s going to collapse in a big way, and anyway, the rush is caused more by artificial scarcity than genuine innovation. My programming projects remain client-side or server apps targeting the web, not because I’m unaware of iPhone and Facebook, but because I consider learning web technology a better investment.

Mobile computing has a lot to offer in terms of innovation. I’m not really trying to downplay that. But the tax and rules of the App Store drive away a lot of developers who might otherwise be interested. I think that’s the major effect, and that it’s harmful, not helpful.

I was kinda thinking that if I bought the piece of hardware that I’d have the veto rights.

You have complete control over the iPhone hardware you buy. You just don’t get veto over Apple’s services and you don’t get veto over my property rights. You don’t have buy any particular App and you don’t have to use the App store and you don’t have to use AT&T.

You have to accept the tradeoffs with any benefit. If you want abundant, high quality software, you will have to accept some restrictions on how you obtain that software and how you move it from device to device. If you don’t care about the quality of your software, then your choices are wide open.

You know, that’s not a convincing argument when you’re trying to get someone to buy the system. I was kinda thinking that if I bought the piece of hardware that I’d have the veto rights.

BTW, to whoever was building their own ogg player: some of Sansa’s players can handle Ogg, and cost less than fifty dollars.

Good point, but now the sole thing I think is to restrictive, acceptable for the iPhone, but would not be acceptable for the iTablet is to be forced to buy the right to compile software on the computer.

Apple provides the iPhone programming tools for free. It even comes with an iPhone simulator. You only have to sign up as a developer to get the right to install the software on the iPhone. They do that because it is the only way to protect the integrity of the iPhone system. Because of its inherent interlinked nature being able to install software on one iPhone means being able to install it on all iPhones. Apple can’t protect its rights and the rights of developers any other way.

Not Ok for the programming right fee…

Why not? Do you have a natural/God-given right to produce software for the iPhone? Apple created the iPhone from scratch why don’t they have the right to control that creation no matter what other people think. If Apple doesn’t let you program for the iPhone you’re no worse off than if Apple had never made the iPhone in the first place. You lose nothing you didn’t start with.

You only have a right to control the work of others if you contributed to the work. You and I didn’t expend any resources creating the iPhone and we don’t expend any resources maintaining the iPhone system. Why should we have a veto over how Apple uses it?

Because P2P is not stealing; it is sharing.

No, it’s flat out stealing. If you take the fruits of another persons work without paying what they believe is a fair price you have stolen from them. You have hurt them.

You rationalize your theft by dehumanizing your victims. Your rationalize that your not stealing from human beings but rather from big, impersonal institutions who have cruel exploited you by charging you more than you wished to pay for entertainment. Why, they owe you! You’re like Robin Hood balancing the scales of economic justice! You’re nobly striking about against those who exploited you and everyone else for so many years. You’ll show those damn greedy jewish moneylenders whose boss…

…whoops. See where a lack of respect for other people’s work leads? Destruction of rights always begins with some marginalized group that people feel justified in hating and then it spreads to larger and larger sub populations. You think your defense of digital theft only hurts giant corporations but the same ethical and legal standards you seek to normalize hurt individuals like myself even more. Giant corporations have the resources to defend themselves to some degree but I don’t. I rely on law and the morality of fellow citizens to enforce my property rights. If those break down, I am screwed.

Here’s what is apparently a radical idea for you. You don’t get to decide how much I value my work. If I create something, anything, I get to decide what price another person will pay for it. If you don’t have want to pay my price, you go without. You don’t get to just take it.

Because the digital world is not real (physical):

If its not “real”, then why do you want it? Can something that is not “real” have any value to you? If software isn’t real and has no value, why are you using a computer in the first place?

you can duplicate it to the infinte at virtually no cost.

You can only duplicate it after I have spent tens of thousands of hours studying how to right software, gaining experience in how people use software, learning to judge what software people need, using all that knowledge to write, test and polish that software, paying for the hardware and software needed to write the software, then paying for the marketing and distribution of that software so that it gets up on the internet where you can steal it. Oh, and I also have to forgo all the income I could have made making something you would deign to actually pay for.

I am so f*cking glad that people like you believe that software just rains from the sky like mana and that people like me just scoop it off the ground with no effort whatsoever and then turn around and unjustly charge you actual money for it.

If you reply to the post, don’t mention the corporations you dehumanize. You talk about me and my software. You explain why you get to steal from me. You explain why you being pissed off at movie companies justifies you stealing my software and “sharing” it with 10,000 of closest friends. You come back with argument how pissed off you are at corporations and I will delete your whiny little thieving post.

The hardest thing about making the player is that I haven’t yet worked out how to have an enclosure made to put it in that will fit it snugly and have cutouts for the screen, buttons, etc. I know how to build the electronics and I know how to use a CAD program to design a shape but I’ve no idea where to actually get a suitable box manufactured in small quantities at a reasonable price. Maybe one day I will have enough spare time that I can figure that out.

My greater point related to the original post is this: however much people love Apple I think you have to admit that, at least in the market for hard-drive based portable music players, they have caused a large contraction in the variety of options available for purchase. I don’t think that is a good sign, and I hope it doesn’t happen in any other fields. It’s obvious to me the difference between now and five years ago when I go to a store looking for one of these players. The choices available in the same store are much narrower now. I like having more choices, not less.

I hope you don’t mind me saying this but that is hopelessly naive. Don’t forget that Apple is big and powerful and I decides to turn against you you have no where to go.

Apple protects my digital property rights against those who would steal my work. That is what I meant. That thievery might come from individuals or it might come from corporations or governments. Regardless of the case, the Apple App store will ensure that I get paid for every install of my software.

Suppose Apple does “turn” on me. Would I be any worse off than if they had never opened the App store at all? No, I wouldn’t. I would be right back where I was before Apple opened the App store.

In a perfect world, the government would automatically protect my digital property the same way it protects my physical property but having the government involved poises many technical challenges and political risk. Having a private company like Apple do it is preferable. I have more control and influence over Apple computer than I do over any any level of government.

Ok for the AppStore

Not Ok for the programming right fee…

Regards

Perhaps in this capitalist society this is a niche that you need to fill personally. Exercise your entrepreneurial spirit – get out there and produce that mp3 player for audiophiles (good luck with that). You’re going to have to do it, because, unfortunately, that’s the only way you’re going to have the pleasure of owning one.

I don’t think anyone’s suggesting that you are too picky (for your mother, perhaps) or that you don’t know of what you speak. It’s just that most audiophiles decided long ago to stick with their Bang and Olufsen home stereos and so it is not a large enough market for the portable player market to concern itself with.

Hollywood hates Redbox’s $1 DVD rentals
http://www.macworld.com/article/142192/2009/08/redbox.html

Because P2P is not stealing; it is sharing. Because the digital world is not real (physical): you can duplicate it to the infinte at virtually no cost. Because they have been for decades selling just one or two good songs on a full album at rocket prices, and selling virtually the same software with almost only just a change on the version digit. Now is the turn of the consumer. Now is the turn of Internet. Unless, of course, they are intelligent enough, as Redbox. Time will tell.

All these you-should-settle-for-an-iPod-it’s-good-enough-for-me type comments suggest why people like me who are in the market for hifi gear (and I admit, we’re a small and shrinking minority) get stiffed when it comes to portable music players.

Shannon may be right that it’s the business model which is driving the lack of choice but personally I don’t care about Apple’s business model, I don’t want an iTunes store, I just want to pay money in exchange for a physical device that does what I want. I guess because what I want doesn’t match what others want, that means I’m out of luck. But I thought one of the advantages of capitalism is that in a capitalist system, niche markets exist and can be profitable enough to attract players. That used to be the case with portable music players but it’s becoming less and less so. I wonder why…

I hope you don’t mind me saying this but that is hopelessly naive. Don’t forget that Apple is big and powerful and I decides to turn against you you have no where to go. One thing we’ve learnt from history is that strong property rights allow the big and powerful to bleed the small and powerless to death. You only have to look at some of the things that Microsoft (as an example) has done to see that.

Nobody outside of Apple or AT&T actually understands what will and will not impact the network. We’re all just guessing. For example, laptops may simply not be numerous enough yet on the network to have an effect.

The more important point form my perspective is that protecting the business model is just as important as protecting technology. Just as it is software that makes the hardware useful, it is the business model that really makes the software useful. The business model is a kind of meta-software that ties the whole thing together. Disallowing a use because its interferes with the business model is every bit as legitimate as disallowing one that damages the technology.

As I noted above, if it was merely a matter of technology, there would be dozens of iPhone clones out there right now. Personally, I think Apple/AT&T can refuse apps or use based on any criteria they wish. They created the system so morally, they can use it as they wish. If they want to disallow apps because they don’t like purple or because it is Tuesday they can.

I’d also like to point out that I can get a wireless card for my laptop(which can run python) FROM AT&T that will let it go on the cellphone network; they don’t feel the need to do any special audits of user’s machines or provide specialized software in order to let them use their network.

“Small software companies can’t make money anymore?” Nonsense. The Individual who make the best selling series of Bird Watching Apps has cashed checks from Apple in excess of $10,000,000. You can become a millionaire making software for the iPhone/iPod. There is an ‘App for That’.

Were you replying to the parent because my entire point was that the App Store lets small developers make money whereas other models do not.

Especially:

“To date, we’ve sold software like expensive books in a bookstore. We’ve sold programs like they were physical items, but software is ethereal and it has to be sold in different way with different tradeoffs. The App store does this. It sells software with boundaries of software, not software with boundaries of paper.”

The emphasis is mine. A well-designed tablet and associated software will allow those very same “expensive books” to sold (and consumed) electronically through the app store.

You remind me of camera guys who look at the hardware specks, like the number of Megapixels, and completely ignore the quality of the camera lens.

The best thing you can do for an iPod owner is give them a decent set of headphones.

Small software companies can’t make money anymore? Somebody better tell these guys,…

Do I need to explain why anecdotes are not evidence?

Games are one area in which small companies can still prosper. This is because most gaming companies don’t do a lot of programming. Most games are based on another companies gaming engine and the company that creates the game merely provides the rules and graphics. A lot of game engine companies brag that you can make games with their products with little or no programming. Gaming companies add value largely by the graphics they produce. In these companies, artist outnumber programmers by a wide margin.

Even so, a small company isn’t going to make it big in games anymore in large part due to piracy and the difficulties in distribution. An App store business model would help small game companies a lot.