Suing negligence, or competition? Apple VS iPod accessory makers
We’ve all got ‘em: docks, earphones, cases, speakers, keyboards – you name it – the iDevice is a virtual swamp for accessory flora. There are loads of great options out there, but according to Apple, a number of products of ‘inferior quality’ have also crept in. So what? Well, Apple being Apple, have attached a couple of strings to the whole thing.
Yes, the iDevice accessory market is lucrative, but entering it requires Apple’s blessing, i.e., licensing. Unblessed items are now targeted by the turtlenecks in Cupertino on the grounds that they both infringe on Apple’s trademarks and “damage Apple’s products”. Apple’s suit cites faulty accessories such as battery chargers that deplete, rather than charge Apple products. Remember, this is the same Apple who are responsible for exploding iPhones and faulty iPhone 4 antennas. I think the real issue, however, is illuminated pretty well over at Bloomberg:
The suit is an example of the tight grip Apple keeps on its products, including approval of accessories and applications. Apple has a program called “Made for iPod” under which manufacturers get a license to sell accessories for devices. Apple collects a royalty of 20 percent to 25 percent from each sale of a licensed accessory, according to Shaw Wu, an analyst with Kaufman Bros. LP in San Francisco.
“If you sell speakers for $100, Apple gets $20 to $25,” said Wu, who has a “buy” rating on Apple shares and doesn’t own them.
From a consumer’s perspective, I don’t get it. If I buy a Made for iPod accessory, I know it will work. I also know it will cost more money. My money can go elsewhere, to knock-off brands or my own DIY work – who cares? Right, poor Apple miss out on 20-25% of their bottom line and the chance to play babysitter for their poor, naive customers.