I've been saying for several months now that Apple is the new Microsoft. I mean that in pretty much every way, good and bad. Here are two articles which more or less cover everything I have been telling friends.

Why Everyone's Afraid of Apple

Feds to look at Apple policy on programming tools

The second article is just an informational piece while the first is more editorial. I wanted to talk a little about the second just to add my own editorial bit to it.

The government may be investigating whether or not Apple's recent policy to require only use of their own developer tools for third party program development. The question being whether or not this policy prevents competition and would therefore be in violation of anti-trust laws. Regardless of the legality, it definitely stifles creative competition if not market competition. First I will say that it sounds remarkably similar to the legal issues that Microsoft once faced for required use of the MSIE browser. Secondly I don't really care about the legal aspect of it, at least from the legal point of view. I'm not generally a fan of support or protest of something simply because of it's legality.

I understand that Apple has been apple to made this leap to the front of the pack over the past couple of years due, in part, to the huge level of security and stability provided by its products. One way to help maintain product stability is to maintain strict development standards and impose those upon third party developers as well. This is one thing that Apple has definitely done right. It worked before they had such a large market share and it will continue to work as they Pacman more of the market share.

That same strategy can also be used for pure monetary gain. Restricting use of certain third party programs can definitely be used as a way to generate or, at the very least, control money. Hold no illusions, Apple is keenly aware of this as they are a business and their goal is to make money. That's how business works. It is not bad for a company to want to make money. It is not bad for a company to want to make more money. We live in a capitalist country and that is how it works. The question is whether or not the strategies for making money are ethical or really good for a business in the end.

First off, I believe that when someone buys a product, it is there property. In a pure setting, they should be able to do whatever the heck they please with it. Should people be able to manufacture meth out of cold pills? No, but if there weren't issues that affected other people in that example, I'd say yes. I don't care if other people take meth. Yes, I care if they neglect their children. I care if their garage blows up and burns down a neighbors house, but in the pure sense, I don't care if they use their own property to ruin their own lives. If someone buys an iPhone and wants to use it to shovel cat litter box, I could care less. So when Apple says that third party programs are completely disallowed unless approved by them (and now developed with their tools) I have a problem with that. Sure, there is the chance (and real likelihood) that unapproved third party programs could (and in many cases will) decrease stability and therefore quality of the product. But I don't care. The second Apple sells one of their iPads to someone, they might as well be used as a Maxi Pad for all I care. It is not Apple's property anymore. Beyond that, as far as ethics is concerned, Apple has given themselves the power to decide who can and cannot profit off of their product. In a free market, anyone should be able to profit off of any product. The second you control who profits off of something, politics becomes involved. You have the power to decide whether or not competition can profit, whether or not friends and family can profit. Whether or not entire groups of people can profit.

The other issue I have with Apple is that they seem to be getting complacent with their seat at the top (or near the top depending on how you look at it). There are many features that are absent on a lot of their products. They are simple features and it seems to me (purely speculatively) that the only reason for their absence is due to a laziness to write stable code for them. How long did it take before they allowed multimedia messages on the iPhone? I believe there were stability concerns and/or a desire to lock in a software company into a lucrative contract to develop third-party software for such a feature. Either way, it seemed like Apple was just sitting on their thumbs until it looked like either another company would profit from unapproved software or they might lose customers after complaints went unheeded.

Another small is example is contact groups in the iPhone. They don't exist. You can buy an approved app for $4.99 - $9.99 depending on the maker. Where do you buy it? The Apple iTunes store. Apple wouldn't make a cent off of that feature if they put it on the phones themselves. I have had a cell phone with contact groups since 2000 and I'm sure many cell phones had them before, that's just the first time I bought one.

The long and the short is, as an investor, I like Apple. As a consumer, I'm just waiting for the next big thing to come along and fill the void left by Microsoft's decline and Apple's complacency. I still own an iPod and and iPhone. Overall they are some of the best products in their respective categories. But they leave a LOT of room for a savvy competitor to come along and simply market a better product.