iHate Steve Jobs or Why I Won’t Buy Anything Made by Apple (Yet)

Guest post by Ben today

At the moment it seems that the ascendance of Steve Jobs and the Apple Empire knows no limit. With the media player and smart-phone markets sewn up and their eyes firmly set on conquering the tablet PC market with the omnipresent iPad, it seems that Apple can do no wrong.

But not for me; I can see the Apple vision for the future and it’s a safe, bland, white-chrome corporate hell. Why do I say this? Well maybe it might have something to do with:

• Apple’s restrictive licensing conditions for the sale and development of apps which basically amounts to censorship and discourages innovation;
• Their refusal to allow 3rd parties to sell apps; iTunes is it – monopolistic price gouging anyone?
• Draconian digital rights management – installing unlicensed apps on you iProduct voids the warranty as does ‘jail-breaking’ them;
• Stupid ongoing court antics with Adobe meaning that iProducts aren’t compatible with Flash;
• Rechargeable batteries which can’t be replaced;
• And the thing that irritates me the most: requiring the use of propriety peripherals e.g. iPod shuffles are designed so that you can only use Apple headphones; USB devices or HDMI monitors can’t be plugged into an iPad - you need to purchase a Apple ‘adapter’ first etc.

But these are secondary to my main issue with Apple, which is their pricing policy.

The personal computing market is a good example of a ‘Lemon Market’, that is, a market where information asymmetry is skewed to advantage the producers of goods rather than consumers. Apple represents a particularly egregious case of this by charging premium prices for their products which aren’t substantially different from other competitors in the market (in fact, I would argue they are inferior).

I’m currently in the market for a good quality laptop and one thing that immediately struck me while shopping around for one was that Macbooks are about $1000 more expensive than their equivalent PC-based competitors. And they get away with it. Sure they look pretty, but so what? It’s a tool not a fashion accessory (yes, I know some people do use them as fashion accessories). In an amazing slight of hand, the Apple PR/marketing machine has managed to convince a substantial subset of IT consumers that their computing products are actually worth paying premium prices for.

Why is this? Is this brand ‘tribalism’ of the ‘I’m a Ford man, he’s a Holden man’ variety? Or are Apple products an example of Veblen goods i.e. goods whose demand perversely increases with increasing prices (although it is surprising how many economists are Apple crazy). Whatever the case, Apple is relying on the ignorance of consumers combined with shiny aesthetics to sell people overpriced electronics.

So what’s the moral of the story?

If you’re determined to waste spend money on Apple you’re better off buying Apple stocks rather than Apple products. The US$5,700 you would have paid for an Apple G3 Powerbook in 1997 for would be worth US$330,563 today if you’d bought Apple stocks instead of a computer…