Watch Out! Apple’s New Face-off 

“As the Japanese put it, ‘Engineers make the pie grow larger; lawyers only decide how to carve it up.’” – Derek Bo, President at Harvard, 1983

Apple, appears you failed to ‘watch’ your back and got ‘caught red-handed.” Recent debate between Masimo and Apple on their smart watches brings to mind the Supreme Court ruling on Apple Inc. v. Pepper.

Case opened the courtroom doors where “iPhone app purchasers can sue the tech giant for antitrust damages over its app store and pricing scheme.”  Recall my paper of May 24, 2019, “Apple’s Pie Face-off: How Big is Your Piece?”

Once again, Apple lost sight of the third key player, App Developers. In this case, Masimo’s. In Apple’s case, technically speaking, they are the party assessed Apple’s 30% commission fee.  A commission which now appears lost.

Why? As I note in my 2017 paper, “If You Can’t Beat Them, Own Them: How E-Commerce Can Embrace its Competitors and Harness Customer’s Data.” SWTF happened?

Referring to suppliers, AnnaLee Saxenian writes in her book Regional Advantage. Culture and Competition in Silicon Valley and Route 128, “According to one Apple purchasing manager: ‘We have found you don’t always need a formal contract . . . If you develop trust with your suppliers, you don’t need armies of attorneys.”

But after Steve Jobs, a new “truth” quickly arose. Apple’s new CEO, Tim Cook stated, “Here’s what we do today. The iPhone is really not made anywhere. It’s made everywhere. That’s the truth.”

Well Tim, we know where the ‘blood oxygen sensor’ was really made.

It appears trust either no longer exists in Silicon Valley or does not apply to developers. What of competitors?

City of Irvine is known for its technology hub alongside its research park, University of California, Irvine. I should know. I’ve lived and worked there. Guess who holds the ‘holy grail’ of Patents?

The new ‘service economies’ where transactions are in the cloud, facilitated by the ‘invisible hand,’ appear to benefit only the interests of tech companies; a constant reminder that the user is getting the raw end of the deal.  

John Bergmayer, senior counsel at digital rights nonprofit Public Knowledge, explained, “The person that bears the brunt of antitrust violations tends to be the consumer.”

So, are Engineers ‘gaining the system’? Let’s ask an industrial engineer, Apple’s CEO. Cook argues, “So, everybody is gaining from iPhone. In particular, it’s been a job engine in mobile APP development.”  

Tim, that depends on who you mean by “everybody.”

It seems to me Apple’s “gaining’ may not only be about selling the iPhone but about users buying apps strictly from Apple and “servicing” the phone with data. More importantly, will customers trust themselves to “push back” and end tech company relationships that have not earned their trust?

Apple, be reminded of my November paper, PRISM, Riddle Me This… Powerful instrument by no means is truly locked up. Right, your instrument unlocked. What time is it? Patently clear.

In any case, the verdict will show us how the pie gets “carved up” and who gets smashed.

Apple, how do you like them red apples! 🙂