Look at the picture some members of the media have painted about Apple. A company once regarded as “beleaguered” has now become a multinational colossus, with a market share third behind Exxon and Microsoft. With record sales and profits, it’s a sure thing that the company and its employees and shareholders are happy, but is the public interest being served?

Understand that it’s hard to justify the claim that Apple holds a stranglehold on the smartphone industry, since the company is in third place way behind Nokia and RIM. Even assuming steady growth on the part of the iPhone ahead of the rest of the industry, it would take years for that situation to change, even it ever happens. We’re not taking about a Microsoft situation, where Apple was summarily trounced when it came to OS market share.

Yes, some might complain about unfair dominance because the App Store is far and away the most successful online software repository for smartphones, but nobody is stopping Google and other competitors from succeeding with their own download services. Yes, there is that controversial provision in the iPhone 4.0 SDK that apparently blocks use of third-party intermediary compilers from being used to build iPhone apps. But how different is that from the way game console makers manage development for their proprietary platforms? Besides, if another application vendor provides a good marketplace for developers, they will come even if they have to build totally separate versions of their products.

It may well be that the real target of any government inquiry will be Apple’s iAd feature, and the decision to block access of customer data to third parties. Apple’s position is that they are primarily protecting your privacy. Forgetting the obvious competitive issues, that may be to your benefit. I mean, how many of you want your information to be at the mercy of different vendors, with different levels of ethical concerns? Aren’t you inundated with enough online advertising already?

Yes, I grant that we depend on online advertising to, in part, finance this company. But I hope it’s not in your face. There are no popups, pop-unders or intermediate banner-laden pages when you want to read our content. The ads are in clearly defined places, and you can view them or ignore them as you wish.

It’s also clear that the government isn’t just checking into Apple’s affairs willy-nilly. They have to have complaints to go on, unless there’s evidence of blatant misbehavior, and that’s highly debatable. There are published reports, for example, that Adobe has complained because of Apple’s decision to not just block Flash on their mobile platform, but prevent you from porting iPhone apps from Flash using Adobe’s software.

When one multibillion dollar multinational corporation files complaints against another, you can bet it will draw serious attention, even of the claims end up being unproven. At least it keeps lots of lawyers employed.

In the end, though, the real question is whether Apple is somehow working against you by having what many regard as overly restricted integrated ecosystems attached to their products. The problem, however, is that you do not need to buy a Mac to own a personal computer, nor do you have to buy an iPhone to acquire a smartphone. If Apple’s closed platforms don’t appeal to your needs or ethics, then go ahead and buy the products that do.

When you buy into Apple’s lifestyle, you can depend on flashy, easy-to-use products that are generally secure and reliable. When you download software from the App Store, it’s a sure thing that these apps will probably work as advertised and not present a security hazard nor, if you observe the product labeling, provide unsavory content. Maybe it is a Disneyland concept, but there’s nothing wrong with that, since most parents would prefer family-friendly fare in a world where rampant social networking has loads of nasty consequences.

At the same time, don’t feel too warm and fuzzy about Apple. While Steve Jobs may want to change the world when it comes to building sexy gadgets that are environmentally friendly, first and foremost Apple exists to make a profit. No profits, they go out of business. If a product or service doesn’t demonstrate its ability to contribute to the bottom line, it will be discontinued. That’s why there’s no more Apple Cube, but the Apple TV, although not a best-selling gadget, still makes a decent profit and so it remains “a hobby” for which Apple still seeks an ultimate end game.

In contrast, if Microsoft built a computer similar to the Cube, they would probably never give it up. They’d change the form factor, change the name, and alter the marketing approach to induce it to succeed, even if they lose hundreds of millions of billions of dollars in the process. That’s why there’s still a Zune music player even though sales simply don’t justify its existence.

When you buy into Apple, you know what you’re getting. It’s up to you to decide if that’s your cup of tea, or you’d prefer to buy the competitor’s product instead. Since there’s no way for Apple to stop you from making your own informed decision about what gear to purchase, I continue to think the government really has nothing to complain about.

The dust just won’t settle on whether or not Apple might be investigated by the U.S. Department of Justice and/or the Federal Trade Commission because of that controversial change to the iPhone developer agreement. A New York Times story on the matter seems to fall back to the original piece in the New York Post, rather than cover new ground. But later published reports appear to indicate the information has been independently confirmed by unnamed government sources.

If true, a whole lot of decisions would have to be made, starting with whether there actually will be an inquiry, after which the authorities would have to determine if an investigation is warranted, and, as the result of that investigation, actually file legal action. Since governments do not spin on a dime, such an action, should it happen, might take many months or years to commence. By the time anything really occurs, we might be on iPhone 5.0, and there’d be a whole new developer agreement to complain about.

This hasn’t stopped some of the online fear merchants from trying to compare what Apple is doing today with that original Department of Justice antitrust lawsuit against Microsoft in the 1990s. One commentator, who shall remain unnamed, even went so far as to suggest that Apple’s dominance of its own iPhone ecosystem is equivalent to Microsoft’s stranglehold of the PC industry. Talk about stretching logic way behind the breaking point and journeying into an alternate universe.

In this universe, Apple doesn’t control the entire smartphone market. Overall, they are third behind Nokia and RIM, and few dare to suggest that Apple can control the industry in the way Microsoft attained a market share of over 90% of the PC marketplace.

More to the point, would the government really care so long as there is viable competition? I mean, even when you go to your AT&T store for a smartphone, you can choose from loads of models built by the likes of HTC, RIM and other manufacturers. Nobody forces you to buy an iPhone. More to the point, Apple doesn’t stop its developers from creating apps for Android or other platforms. They only state that if you want to make an iPhone app, it has to be done in a way that fulfills Apple’s requirements.

Indeed, if one wants to blame Apple for unfairly controlling its developers, consider the plight of software publishers who build games for, say, Nintendo or Microsoft’s Xbox, where they are required to use the company’s proprietary systems to debug their apps and then get final approval from the company to sell those games.

Or is it a case that it’s all right for those game console makers to place stiff restrictions on their developers, but the big bad Apple is in a different league, because the company’s market cap is third behind Microsoft, and ahead of even Wal-Mart. They have to be stopped before they match Exxon. The world will come to a halt because of the sale of all those iPhones and iPads with their horrible proprietary operating systems and restrictive developer contracts.

Of course, governments do not have to rely on logic and reason before deciding whether to investigate a company or file a complaint. It may just be the politically correct thing to do, and sometimes the threat of possible action will be sufficient to force a company to mend its evil ways.

In the end, it may well be, despite the fact that it doesn’t seem terribly rational, that Apple will be compelled by a potential threat of antitrust action to alter the language of its developer contract. Perhaps their legal team can flesh it out in a way that fulfills the desire to have apps meet certain standards, but doesn’t restrict the developer tools in which to build those apps. So if a third-party environment lets someone embed support for all or most of the key iPhone features, does it really matter?

But if the authorities are going to attempt to force Apple to comply, what about Microsoft’s gaming platform? After all, Microsoft remains the largest software developer on the planet. Why not comb through the legalities of their pacts with gaming companies and see if something isn’t kosher?

But isn’t this all a waste of time? Or is that alleged inquiry the result of Adobe crying crocodile tears to the government and claiming irreparable harm to their business? I suppose if such complaints are couched in the appropriate legalese, the authorities would be honor bound to at waste taxpayer’s money to begin a probe, even if nothing comes of it.

At the same time, maybe Adobe should be using the occasion to provide evidence, if there is any, that Steve Jobs was wrong in objecting to Flash and its performance on the Mac and on a smartphone. What about a public demonstration of Flash running on a test iPhone of recent vintage, showing that it performs well, doesn’t crash, and isn’t making undue demands on battery life? Can Adobe do that — or would they rather just whine and hope nobody notices they aren’t producing any evidence for their claims?

So the other day, one of those famous one-liner emails from Steve Jobs appears, stating that Ogg Theora, an open source multimedia codec, faces potential patent issues. The conclusion is that Apple must be responsible, although they forget that there is actually an H.264 organization that manages a patent portfolio for such content. Maybe it’s them?

Another report claims that Apple’s decision to block Flash from the iPhone mobile platform and a change in the developer’s license to prevent use of third-party tools is the subject of a possible antitrust inquiry by Department of Justice and Federal Trade Commission. Such inquiries occur all the time, but only rarely result in an actual investigation or legal action. The current brouhaha over the matter may have generated interest. Or maybe the story isn’t true, since it hasn’t been officially confirmed. It’s not that the newspaper that published the story, the New York Post, is a paragon of journalistic virtue.

Or maybe the reporter who wrote that piece was given a background briefing on the subject by one of Apple’s competitors, hoping to generate bad publicity or, in fact, convince the government that this is really something they need to investigate.

However, it would seem a colossal stretch to expect the authorities to demand that a private corporation change the terms of its contracts in a way that favors competitors or potential partners who want to use its development platform. It’s not as if customers are forced to buy Apple’s products, or even that the iPhone has a dominant market share. Yes, it’s true that Apple is the number one maker of mobile phones in the U.S., ahead of Motorola, but there are loads of other players in that industry with far greater sales.

Unfortunately, there’s the perception that the decision to keep Flash and third-party developer tools from its mobile platform was done strictly as a power grab. Apple craves dominance, Steve Jobs is a control freak. Add it up and they will do whatever it takes, ethical or otherwise, to make a profit.

Sure, Apple wants to make a profit, and Apple’s employees want the company to live long and prosper so they can keep their jobs. All those investors in Apple stock hope the price will continue to increase, so they can, ultimately, sell off their shares at a sizable profit. Nothing wrong with that.

At the same time, when Steve Jobs wrote that notorious blog post defining his objections to Flash and third-party programming tools, what he said is basically correct. Adobe’s Flash player is buggy, it crashes, it’s a memory hog, and it’s an open question whether a version will ever run properly on a smartphone. Even if it does, what about all those Web developers who built Flash-based features on their sites that can’t be recognized on a touchscreen?

It doesn’t help Adobe’s case that Microsoft’s Internet Explorer 9 will support the burgeoning HTML5 format and H.264 for video. Yes, there will be support for Flash too, but Microsoft appears to agree with Apple that Flash has security and stability problems. So will Adobe go after Microsoft next?

When it comes to developers, who gets cheated if an app doesn’t support new iPhone features because the third-party tool that built that app only provides the bare minimum of compatibility? What’s the point of Apple developing 100 new features for the iPhone, if loads of apps don’t use them? Developers may have to spend extra money developing an exclusive iPhone version, but they will also gain access to the largest and most successful online app store for smartphones in the world. That is not something from which they would easily walk away. It also means they will have more satisfied customers, since their new apps will support some or all of the iPhone’s latest and greatest features.

That sounds like a good thing to me, but clearly Adobe doesn’t like it, and they are doing their level best to make Apple the villain. On the other hand, even though nearly half of Adobe’s Creative Suite revenue comes from the Mac platform, why did it take years for them to fully support Mac OS X? Only the very latest version of Photoshop, for example, was developed in Apple’s Cocoa environment, which also allows it to support Snow Leopard’s 64-bit feature at long last.

Of course, Apple and Adobe have had a dysfunctional history for years. Early on, after working together to create the desktop publishing revolution with the Apple LaserWriter and Adobe PostScript, Apple responded to abnormally high prices for Type 1 fonts by working with Microsoft to develop TrueType. In the end, Adobe cut the prices, but they also built Windows versions of their apps and, in some cases, got those versions out ahead of a Mac counterpart. Some apps never appeared on the Mac platform.

In the end, I don’t expect to see Apple face the wrath of the U.S. government, and I also expect that Flash is, as Steve Jobs states, yesterday’s news. Adobe can protest as much as they want in public, but you hope that, privately, they will be willing to accept the sad truth that the world has changed and prepare to move on. There are still ripe profit possibilities for them, and maybe they could find a way to actually work with Apple for the mutual benefit of both companies.

In the next few weeks, some Mac sites will slobber over the fact that Consumer Reports once again gave high ratings to Macs in their latest computer reviews. You’ll get the impression that Apple’s products are, at last, getting their just due in a magazine that has long ignored the Macs, or just presented them as overpriced PCs.

Well, my friends, it hasn’t happened. Indeed, it’s fair to say that nobody who wants to understand the vast differences between a Mac and a PC will find any help in CR’s pages, even though the Macs they did review in their tests of “119 laptops, desktops, and netbooks” got expectedly high ratings.

The problem is that CR fails to understand that it’s the operating system stupid! They look at the hardware in terms of specs and bullet points on a spreadsheet chart, and never explain that a PC is more than the sum of its parts. This is particularly true in their section entitled “How to choose a computer,” which focuses on “type and size,” “ergonomics” and “reliability.”

Now it would seem that superior ergonomics would present a category that’s tailor made for the Mac OS. But CR is concentrating on physical controls, keyboard feel, trackpads and transportability. Nothing is mentioned on how the user interacts with the operating system, or why Mac OS X or Windows treat you differently.

Continue Reading…