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Steve Jobs and Control

When Steve Jobs was demonstrating the iPad last week and the screen suddenly showed one of those broken icons on the New York Times web page, indicating that a Flash animation was unavailable, I realized that the guy wasn't making a rare gaff--i.e. mistakenly showing a poorly-rendered web page--but rather indicating that the NYT had better step it up. Jobs isn't interested in Flash, and not because it's buggy or performance challenge. Instead, Jobs is interested in control. And Flash isn't going to make it on his devices.

Jobs has exerted his control in a related way with publishers, by enforcing a pricing scheme that damages consumers by raising the average price of eBooks from the $9.99 Amazon had been charging to the $12.99 to $14.99 range. This makes publishers happy, of course, as Amazon had been taking a loss on each $9.99 in a bid to get that to become the normal price for eBooks (which it should be) as its Kindle reader became more and more popular.

But wait, there's more. While Apple heavily advertises the 5 gajillion apps that are available on its iTunes Store, the fact remains that the vast majority of users only have a small handful of apps (5 to 10) on their phone and regularly use even less. So this app ecosystem does benefit a small number of developers greatly, but most of them, of course, make nothing. At the top is Apple, which makes the devices that run these apps. Apple still barely breaks even on its entire iTunes/App Store ecosytem, so the point of this endeavor, of course, is to just sell hardware. And if they are just selling new devices to the same customers repeatedly, so be it. A sale is a sale. If sales are down, just invent a "new product category." The lemmings will wait in line.

What emerges here is an interesting picture. Beloved Apple, as it turns out, isn't really so benevolent. I'm curious that we've got another Google/Microsoft in the making here and that no one seems to have an issue with this. Price fixing in collusion with the publishing industry? Creating a closed, central clearing house for selling other company's products? Orchestrating products to shut out competition? Doesn't all this sound kind of familiar?

By the way, each of these topics were covered in the New York Times this morning and yesterday, though the paper of course would never consider reporting on the central issue that binds them all together. (And read 'em while they're free; thanks to the new Apple commercial model, the NYT will soon go paid only.) Coincidental, I'm sure. But indicative of the fact that Apple, no longer the scrappy minority player, really isn't the type of company we want controlling things. Just as expected.

iPad Can’t Play Flash Video, but It May Not Matter

Flash is one of the world’s most ubiquitous applications, appearing on 98 percent of all computers. YouTube videos run on it. It is what animates millions of graphics and advertisements on Web sites around the world. Adobe says the technology supports nearly 75 percent of video on the Web and 70 percent of online gaming sites.

While Flash is present on nearly every Apple desktop and laptop computer, the company decided that Flash would not be used on the iPhone. Apple has argued that the Flash technology is too slow and unduly taxes laptops and netbooks. The company also has concerns over Flash’s vulnerability to viruses and other malware, as well as the way Flash-based content can voraciously consume battery life.

Adobe, unsurprisingly, disagrees — and has its own theory about why Apple remains hostile to Flash. Adrian Ludwig, group manager for the Flash platform product at Adobe, said he believed Apple’s opposition was a way for the company to control its iTunes system. “I think it’s pretty clear that Apple wants to regain control of the content consumers see online and the content Apple offers for their devices,” Mr. Ludwig said.

But concerns over the lack of Flash in the iPad and iPhone may be short-lived. Many online video sites have been experimenting with a new video format, called HTML5 ... the patents surrounding HTML5 are owned by a group of companies; Apple is a part of that group.

At Amazon, Giving in to Demands

Under Macmillan’s new terms, which take effect at the beginning of March, the publisher will set the consumer price of each book and the online retailer will serve as an agent and take a 30 percent commission. E-book editions of most newly released adult general fiction and nonfiction will cost $12.99 to $14.99.

Those terms mirror conditions that five of the six largest publishers — Hachette Book Group, HarperCollins Publishers, Macmillan, Penguin Group and Simon & Schuster — agreed to with Apple last week for e-books sold via the iBookstore for the iPad.

For more than a year, publishers have been fretting about the price of digital books, which Amazon, as the dominant player in the fast-growing market, had effectively been able to set.

Because Amazon has discounted the price of most new and popular e-books on its Kindle e-reader to $9.99, it loses money on most of those sales.

Amazon’s goal has been strategic: it aims to establish a low price for e-books that will have the ancillary benefit of helping it sell more Kindle devices.

When Phones Are Just Too Smart

Since she bought an iPhone nearly a year ago, Ms. Cua has downloaded precisely five programs ... Ms. Cua is not an exception. She is the rule. The average iPhone or iPod Touch owner uses 5 to 10 apps regularly, according to Flurry, a research firm that studies mobile trends. This despite the surfeit of available apps: some 140,000 and counting.

People prefer fewer choices, and that they gravitate consistently toward the same small number of things that they like. Owners of iPhones are no different from cable TV subscribers with hundreds of channels to choose from who end up watching the same half-dozen.

Most users will never see more than 1 percent of the total apps available ... A study last year by Pinch Media found that most people stop using their applications pretty quickly, particularly if those apps are free. And three out of every four applications people download are free

Not a big deal or necessarily related to the topic at hand, but I find it interesting that the New York Times also blogs about the stories that are in its print edition. So the Flash issue is also discussed separately in this blog post and the Amazon eBook pricing battle is re-discussed here.

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