Re: Apple made just one mistake
>> So yes, Apple batters them with a 30% cut of the list price, but expects the same list price as that given to Amazon, B&N etc. Is that a mistake?
I see where you're coming from, but in a free market where I make some sort of widget, then it should be up to me how much money I'm prepared to sell them for. So lets say I'm happy to sell each widget for £1, that's not the retail price, it's what I'm prepared to sell it for.
Under Apple's system, they take 30% of the retail price, so I'd need to set the retail price at £1.43 so that after Apple takes it's 30% cut, I'm left with £1. The guys selling widgets down on the market might be happy working with only 5% margin, so he could sell them at £1.05 and I'd still get my £1/widget.
Apple don't like this, it makes them look expensive so they've done two things :
1) The "favoured nation clause" which says I can't allow my widgets to be sold cheaper anywhere else. It may well be that I make more sales from the market stall holder - so I don't want to push the price up there. That means I'm more likely to have to accept a lower price for widgets sold by Apple - perhaps only 75p. That's a big chunk out of my income.
2) Apple also prohibit me selling my widgets to users directly - if they are to be used with iStuff, then I can only sell them through Apple. So I can't direct people to buy from the market stall, they have to go into the expensive shop run by Apple.
It may be that I consider the "added value" from Apple to be worth it - they sell it, collect the money, etc. But I may already have a working relationship with the stall holder and be happy with that. It should be my choice.
Incidentally, Amazon also have this anti-competitive "most favoured nation" clause in their contracts. Given the combined market power of Apple and Amazon between them, I fail to see how on earth either is good for the consumer.
As to the argument that Amazon is dumping to kill competition, well we already have laws to govern that - did any of these other businesses make any complaint ?