opinion Reading through some of the news reports about Apple’s court case today blocking the Australian launch of Samsung’s Galaxy Tab 10.1, I couldn’t escape the feeling that the iPad maker’s lawyers had been spending too much time immersed in the company’s famous reality distortion field.
According to the Sydney Morning Herald, Apple made a number of statements about the Australian tablet market which could only be described as sensationalist at best, and a high degree of paranoia in action if you assumed the worst.
Apple, the newspaper reported, argued in court that the launch of Samsung’s Galaxy Tab 10.1 tablet would launch in Australia “with the velocity of a fire hose”, with customers being “seduced” away from Apple’s iPad “so quickly” and becoming “Android people” who would reject the whole iTunes ecosystem from that point on.
Although a plethora of other manufacturers have had Android-based tablets in Australia for months – Acer, Motorola and ASUS, to name a few – and HP and Research in Motion have also launched non-Android tablets, Apple argued the other companies’ devices were irrelevant, with Samsung’s device being the only realistic competitor to the iPad.
Overall the feeling I got from reading Apple’s statements was that the company saw itself as having only a feeble lead in Australia’s tablet wars. Admittedly, there were a number of other competitors trying to cut its grass, but they were far behind. Apple painted Samsung as the big bad; an evil Korean conglomerate which was breathing down its neck, its foetid breath painting foggy patterns on its pristine glassy iPad surfaces.
Now, in some senses, it’s not hard to see why Apple feels this way. After all, it was only last year that Samsung grabbed substantial market share in the smartphone arena with a handset – the first Galaxy S – that bore a substantial resemblance to the previous generation of Apple iPhones. And there is no doubt that currently, that handset’s successor, the Galaxy S II, is one of the hottest handsets available in Australia – potentially even eclipsing the iPhone 4 in terms of its desirability to local gadget enthusiasts.
What Apple confirmed in court this week, according to iTNews, was that it was the launch of the first Galaxy S in July last year that first caused tension between the two companies. Apple didn’t attack Samsung legally at that point, according to the Sydney Morning Herald, because the Korean company is a key supplier to Apple and Cupertino wanted to negotiate with it first before commencing open warfare.
In this sense, then, one can understand the intense fear Apple appears to be demonstrating towards Samsung. It doesn’t want a repeat of the Galaxy S smartphone saga. It doesn’t want to sit quietly by and watch as its customers are seduced away while its products are blatantly copied in front of its eyes. And most of all, it doesn’t want those customers to become locked into the Android ecosystem the way it has been locking them into its own iTunes iJuggernaut since the launch of the first iPhone half a decade ago.
However, what Apple is not admitting at this point at this point is that while there was a great deal of demand for alternatives to the iPhone, the same situation simply does not apply yet to the iPad – and it may not apply for several years to come.
When Apple first launched the iPhone back in 2006, it launched it into an already crowded market dominated by companies like Nokia, Sony Ericsson and Research in Motion. Apple had to fight for every inch of market share it gained with the iPhone over the past half-decade, and that battle is reflected in the percentage of overall phone sales which the company enjoys today.
In late June this year, analyst house IDC released a report tracking smartphone sales in Australia over the first quarter of 2011. The report showed that Apple’s iPhone platform then had nearly one third market share of the total number of mobile devices being sold in Australia — a figure which was up 13 percent on the previous quarter. IDC estimated the total number of new mobile phones sold in the quarter in Australia at 2.44 million — meaning Apple would have sold about 800,000 iPhones in the period. The big loser in that battle was primarily Nokia, which lost 9.5 percent of market share compared with the previous quarter.
Sure, the overall Android platform – being pumped to the max by HTC, Sony Ericsson, Motorola, LG, Huawei and of course Samsung – saw huge gains. And increasingly, Android outranks the iPhone in Australia. But that’s because Apple’s facing a pig-pile of vendors, all with existing smartphone experience. One against half a dozen isn’t great odds for anyone – even if you’re Apple — and the Android platform has had quite a few years to mature.
But in the tablet market, it’s a completely different story.
When it comes to tablets, Apple never had to convince customers to dump their existing brands in favour of its own. The entire product category was new, and largely established by Apple itself in mid-2010.
Apart from a few anaemic launches such as the Samsung Galaxy Tab 7”, which broadly flopped and was discounted incredibly rapidly, Apple had its first year of iPad sales completely to itself. And the results show; today IDC released a new report showing Apple has some 74.6 percent of the Australian tablet market. That’s more than double the share it has in smartphones, and it’s probably making a lot more profit on iPads than it ever did on the iPhone, given that most smartphones are subsidised while most iPads are just bought outright for a figure close to a grand apiece.
Now, IDC claims that Android-based tablets make up about a quarter of the Australian market. Even this figure would give Apple a virtual monopoly over the Australian tablet scene. But I’m betting that IDC’s off the mark by at least ten percent. I’m betting Apple’s share of the Australian tablet market is closer to 85 or perhaps even 90 percent.
Why?
Look around you. Have you ever – and I mean ever – seen anyone actually using an Android tablet in public? What about a BlackBerry PlayBook? I haven’t. I have quite a few meetings every week, I go to business lunches, I hang out with lots of geeks and I catch buses every day. Never have I seen an Australian using anything apart from an iPad – unless it’s a Kindle e-Reader, which doesn’t count as a tablet (well, at least not yet).
The one exception to this rule is the HP TouchPad. I know that many Delimiter readers bought a TouchPad during the recent sales. However, the constant feedback I got was that most of those who did bought the device as a cheap second tablet, because they already had a household iPad but someone else kept on borrowing it – their wife, perhaps, or their kids.
If you believe the crap which Apple spun in the Federal Court today, the company is on the edge of a competitive nightmare, with Samsung about to eat its tablet lunch and its market share about to shrink dramatically if the iPad-lookalike Galaxy Tab is allowed to go on sale in Australia (which it eventually will, despite Apple’s protestations).
But the simple fact of the matter is that there is nobody in Australia right now who is clamouring to buy a Galaxy Tab 10.1. The response from Australian customers when Vodafone put an earlier version of the Galaxy Tab (the 10.1v) on sale locally was as weak as a wet willy, and the second time around things won’t be any different. Those Australians who were desperate for an Android tablet already have a Motorola Xoom or an Acer Iconia Tab – if they care at all.
Samsung’s lawyers claimed in court this morning that the company needed to be a first mover in the tablet market and “not dribble in behind everybody else”. Well, the company has had its chance several times over, with the 7” Galaxy Tab and then the Galaxy Tab 10.1v. And now it’s not just Samsung who’s dribbling into the tablet market – it’s every tablet manufacturer which is not Apple.
The reason, of course, is because the current crop of Android and other non-Apple tablets are pathetic. They’re normally heavier than the iPad and bulkier, their operating systems are half-baked (Honeycomb is particularly crap), application support is dubious at best and worst of all, they generally cost the same or even more – if you can believe that – than the iPad. What everybody knows is that as Christmas looms, price cuts galore are going to hit Australia’s tablet market (they’ve already started overseas) as every non-Apple tablet manufacturer around dumps unsold stock as they prepare for the Motorola Xoom 2 or whatever.
In this context, Apple’s shrill shriekings of unfair play in the Federal Court today sound about as plausible as Telstra’s Trujillo-era claims of foul play in the telecommunications market. The whole scenario stinks of a virtual monopolist attempting to squeeze the paltry 10 percent worth of competition in its market completely out of business so it can reign unopposed for a half-decade or more until it can reinvent another market and take another pile of cash out of consumers’ wallets.
For all his inspirational speeches, faux-humbleness in front of city councils, home-grown organic vegetable diets and Buddhistic ethos on life, it should never be forgotten that Apple co-founder Steve Jobs is at heart a ruthless executive who built an empire exploiting that most fundamental of capitalist principles: Greed. For those who doubt this statement, I encourage you to watch Apple’s iPhone 5 product announcement next month and pay close attention to the naked lust on the faces of those attending.
What we’re seeing in Australia’s Federal Court this week is something noxious. It is an attempt by Apple to crush any amount of competition in a market that has not even begun to emerge. It is an attempt by a close-to-monopolist to render stillborn any semblance of rivalry on its home turf. And it is a case of naked manipulation in which a company which is close to being the biggest in the world is claiming publicly that it’s being treated unfairly.
Now, Apple’s got some degree of righteousness on its side in this one. In my opinion, Samsung’s products do look a little too much like they were ‘Designed in California’. But exaggerating a market weakness which does not, in fact exist, over-exaggerating the strength of a rival whose tablet products are not yet close to being mature and hyper-exaggerating possibly negative outcomes in general from allowing Samsung to sell a tablet which, in fact, Australians could not give a flying fig about is just a little bit … of an over-reaction.
IDC’s numbers for Android in Australia are based on manufacturers’ marketing claims of “units shipped”. Apple reports “units sold”.
Only one of these figures is actually meaningful.
Precisely.
Not entierly true both report units shipped its just that most ipads shipped are sold
also
“The response from Australian customers when Vodafone put an earlier version of the Galaxy Tab (the 10.1v) on sale locally was as weak as a wet willy, ”
Really about a week maybe less after it launched it was sold out I know I wanted one
So Apple is admitting that it’s walled garden is anti-competitive and that it needs to keep people in its ecosystem or it’s whole business model will fall over. Well I never.
Hopefully this legal action will lead to courts/judges around the world to question Apple’s appalling DRM and how it controvenes basically all competition laws in any western democratic country.
My iPod has about 2,500 songs on it. Only about 20 of them are purchased from iTunes.
If I choose to move to a different device, I’d burn those 20 songs to a CD, then rip that CD back to MP3 – (ie: no more DRM).
I’m not locked into their DRM. Nobody else is either.
I dunno … I feel pretty locked in every time I buy an iBook. I can’t exactly read it on my Kindle, although I can read Kindle books on my iPad or iPhone.
Why on earth would you buy from iBookstore? Is there anything there that you can’t buy on Kindle and read, as you’ve pointed out, on your iPad and everywhere else?
What DRM are you referring to?
There is only limited restrictions on iTunes music and apps.
The limitations on computers and devices is only on Apple devices and software. You can do what you like with your itunes music in other players and devices. There’s nothing stopping you copying software around computers either – though it’s against the licensing.
Book publishers can choose to make their books DRM free through iTunes, and it’s probably the same for other digital media – though surprise surprise, no-one does.
Apple would be happy with no DRM – hence why they haven’t even bothered with licence keys on their own software.
The Apple court battle with Samsung can be summed up by one set of images
http://www.reddit.com/tb/kr14a
Limited restrictions? I don’t think so.
iOS apps run on Apple devices only. iBooks can only be read on an iDevice. Apps can only be installed through iTunes, and by the way, Apple decides if they’re fit to be included in iTunes to start with.
Re: music: If I remember correctly Apple only got rid of the music DRM once Amazon forced it to by offering its own DRM-free platform.
Then there’s anti-competitive behavior. If your app mimics the functionality of one of Apple’s own, good luck getting into the App Store. Same if it has anything to do with sex. Drugs. And so on.
This is not an open platform. It’s still the best platform. But it’s not an open one.
– Android apps only run on Android devices. Windows apps only run under Windows. Mac apps only run under OS X. That’s not DRM.
– DRM on audio files through Itunes was a restriction imposed by the labels, not Apple. Steve Jobs publicly called on the labels to abolish DRM in Feb 2007, well before Amazon launched its own music service. Wired magazine published an article claiming that Amazon only launched a DRM-free service because of Apple’s stance *against* DRM.
– no disagreement on the App Store. Apple’s sandpit, Apple’s rules.
I think you are missing the point
Nothing is stopping Android apps from being run on other devices, in fact the only other device which Android apps don’t run on is Apple! Blackberry for example is going to implement an Android emulator on their playbook
Yeah Apple only removed DRM on Music once most users had downloaded videos with DRM or apps.
DRM would have NEVER been removed from music if there was no other way to lock you in.
The ‘openness’ of a platform just reflects the business model of the company behind it.
Apple profit mostly from hardware
Amazon profit mostly from content and retail.
Google profit from selling you to advertisers.
Content producers determine whether content has DRM applied.
Apple made a crap load more money through iTunes once they were allowed to remove the DRM on music.
As for the AppStore restrictions, well just you watch Amazon do the same with Android on Kindle. They’re going to cream the Android tablet market with a closed Android eco-system. It’s just Coles and Woolworths in a virtual space.
Ummm… What are Apple’s lawyers meant to say…
“They slavishly copied our product, but because they’re so hopeless at marketing and customers are so ridiculously addicted to the crack we call iTunes, it probably won’t impact us much.”
These are lawyers in an IP case, they are there to stop the other guy’s product from being released AND to try and set themselves up for damages should they ultimately win.
They are going to paint a dreadful picture for their product should the usurper (Samsung in this case) be allowed into the market off the back of Apple’s hard engineering work.
It would be like saying to journalists everywhere, please stop using adjectives to describe things, it distorts the story. Journalists tell their story with their own bias baked in for better or worse and lawyers paint pictures of doom and gloom when they are asking the court to take some kind of punitive, aggressive action.
It really comes down to this; is anyone actually accidentally going to buy a samsung tablet instead of an iPad when they were planning to buy an iPad?
PS. Renai we need a meeting. If only so you can see someone using an android tablet in the wild. (I must have the only one!)
Renai knows I have one, too, he’s just saying that for dramatic effect :-)
Also, I agree that the Galaxy S looks almost exactly like the iPhone 3GS, but I really don’t see how they can make the same argument about the Galaxy Tab. I mean, what tablet doesn’t look like that?
Does it look like a iphone or updates F700?
http://www.cnet.com.au/samsung-ultra-smart-f700-339285261.htm#image2
It’s an updated version of the sgh-f480i. It’s bigger than the iphone, lighter and a better phone… I don’t understand why iClones need go on about their inferior product. Just look at the product comparision reviews..
So, it is monopolistic if you stop someone who has allegedly ripped of your designs from selling against you?
What design is that? A rectangular screen?
And its these kind of comments that make me laugh. You are defending anti-competitive behaviour.
And people wonder why there is so much animosity between Apple and non-Apple users.
Also – I agree with what Goke Missile Crisis said (a few comments below).
You have to remember that Apple use to pride itself on the fact it did not engage in anti-competitive practices like The Man (which at the time was Microsoft).
Oh how the tables have turned.
Just a little thing about the article – How exactly is Honeycomb crap? Both 3.1 and 3.2 are quite good.
http://en.wikipedia.org/wiki/Android_%28operating_system%29#Version_history
Apple IOS is the new AOL. What happened there?
C’mon Apple. You didn’t invent tablets, or their UIs. You just made them mainstream. Sure, Samsung have been bold in “borrowing” ideas from your playbook… are you trying to tell us you have never done the same?? What’s good for the goose…
iPhone was released in 2007 #justsayin
If Apple’s claims are not justified then the courts will decide that way. What people are are saying here is for Apple to roll over if it believes it is being ripped off (easier to have lower prices when you spend less on R&D, too).
If you don’t protect your rights, you lose them. Intellectual property, trade marks and patents operate the same way.
We should all be cheering Apple on for encouraging innovation over copying. Let Apple’s competitors compete on innovation… let them build a better product not just a cheaper one.
Apple don’t innovate, they produce products with ideas stolen from other companies and call it “new” and “magic” when its just a rip-off of everyone else’s hard work.
They are threatened by Android, Samsung in particular and this is how they are dealing with it. Why make new products when you can just destroy your competitors and make more money off your iZealots
Never wanted a tablet, but all this rubbish is kinda making me want a get galaxy tab 10.1 just because Apple really don’t want me to. This reverse psychology stuff is powerful. Maybe this is all actually part of Samsung’s marketing plan? If it isn’t maybe there is a good opportunity for them to make it so! Imagine a billboard, “You can’t have this because Apple says so!” I’m sure it would work on me.
After a weekend, when a friend came over to show me their bright new “the sun is shining for me” Apple iPad2, I was not impressed. All I got was “this is wonderful,but how do I get to make this of that work?” After having to advise them that there is a lot Apple doesn’t let you do and you have to go around the world to cross the street that Apple doesn’t want you to cross, plus to try to put a smile back on their face, I will avoid. I will admitt I was tempted once, but after this weekend, no, I do not need one. The walled garden approach might be safe and pretty, but in the long run, the gene pool is too small and it will die.
So is Apple actually admitting that Samsung has a superior product? Presumably nothing less would see such a dramatic market shift as Apple is suggesting.
I thought about getting an iPad 2, but ended up with an old generation Samsung Galaxy Tab. It’s a great tablet, plenty of apps around for it, and it’s not tied to iTunes.
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