Critique of Has Apple Finally Become a Monopoly Like Microsoft?

The growing concern among faithful Apple users is that the company is becoming a monopoly. Many people think that the concept of a monopoly is a good thing; the board game “Monopoly” declares the player with the most money and control of the board as the winner. The definition of a monopoly is the situation that occurs when a single company has complete control of a market for a certain type of good or service. This company with absolute market power has no competition which creates a barrier for other firms who want to enter the market. Monopolies, by definition, produce a lower quantity of goods and charge higher prices for their goods than those firms who are in perfectly competitive markets.

This article first discusses the fact that Microsoft is a monopoly in the operating systems market. Even though being a monopoly is not considered to be illegal, using the status of being a monopoly to force smaller companies out of business and out of the market is illegal. In order to keep a company as a monopoly, the operations of the firm must be approved by the government or monitored to make sure a fair amount of competition remains in the market and that the firm is not breaking any laws. The question everyone wants answered is if Apple is considered to be a monopoly. The fact that Apple controls over 80% of the digital music player and digital content delivery market suggests that they are in fact a monopoly. Apple dominates these markets because they produce the highest quality experience for the lowest total cost (total cost = fixed cost + variable cost). The author, however, believes that “true competition is the only way to ensure superior products in the years to come” (Stoup, 1).

So according to the author of this article, it would be in Apple’s favor to have other competitors emerge in the market. When there are no other competitors in their line of business, it’s hard to constantly drive to improve their products when there isn’t any outside competition to motivate them. It would be in Apple’s best interest to lose some market share and have less power and control in the market. In class, we learned how to calculate the level of competition in two ways: the concentration ratio and the HHI. To calculate the 4-firm concentration ratio of the digital music player and digital content delivery market, we would take the top 4 successful firms in a specific market and add together their market shares. To find the HHI, we would determine how many firms are in the market, square each firms market share and then add those numbers together. Fewer firms in a market mean that there is less competition so each firm has more power in the market. So I agree with the author of the article when he says that “best deal for consumers is to hope that Apple loses market-share… the time could come soon enough when consumers might wish for a few more options in this ever more profitable market” (Stoup, 1). If Apple thinks it is in their best interest to lose some market share so that other firms would be able to enter the market and gain market power, then Apple would be able to lose their label of being considered a monopoly.

Critique "Gas and Supply and Demand"

I believe that Melissa's chosen article is incredibly relevant in interesting. While it's such a simple and a constant issue, she makes good points through out it when describing the issues of supply and demand within the industry. Gas is a necessary part of our every day life and affects absolutely everyone, including those in the class. Due to this, her stipulations about the issues regarding supply and demand when discussing gas are accurate. Due to the necessary and constantly increasing amount of demand that there is for gas the lesser supply, one can interpret this by saying that everyone will still continue to buy gas no matter what the price. There is no way for them to continue living their every day lives without this. Every object in the classroom is there because it was flown, shipped or driven by something that runs on gas. Since gas is also a natural resource there will a constant supply for the most part. Despite this, the demand has been increasing due to international problems. Some of these international problems are natural disasters, such as the earthquakes in Japan. This intertwined issue can be seen through a supply and demand curve. No matter what the price of gas is, the consumers will continue to pay despite this because of the constant high demand.

Melissa also states that as price increases, the consumption seems to also increase. She made a good observation when she noticed that this doesn’t follow the rules of price elasticity. Since price elasticity states that if the price of a commodity rises the demand will then fall. She claims that this loophole in the rule can be blamed on the rising consumption levels of Asian countries based on the fact that America’s demand hasn’t risen as such sharp levels. I believe that she made a good point when she blames supply as the determining price factor because there is no clear or current substitute for gas. Due to this, it makes gas inelastic since it becomes less than one. All of these are valid and necessary points to the argument that she is making.  When she discusses how if the price increase would create a decrease in demand for oil in Europe, the U.S. and China would help the price to go back down and the supply and demand to reach equilibrium, I wish that she had discussed some more of the consequences. Especially since there is a possibility that the price will continue to remain at such a high rate. I would also have liked to hear how she would interpret that within price equilibriums. 

Critique "The NFL Lockout"

The NFL Lockout is a very interesting situation from both the sports and economic perspectives. I believe the article presented many good facts and had a very good understanding of the economic effects of the NFL lockout, but left out other economical factors that could contribute to the situation. As stated in the blog, the NFL is one of just few legal monopolies in the United States. A monopoly is defined as a market structure in which a commodity is supplied by a single firm. The NFL’s monopoly does not just affect the football players, coaches and owners of the teams it can also have an effect on many other industries. For instance, the NFL Lockout will have a drastic effect on television networks, companies such as Reebok, NIKE and the other independent suppliers that carry NFL inventory in their stock.

This can cut billions of dollars of revenue across many different industries, for example companies that have made large profits off of sporting events such as the National Football League through advertising, selling products at the games or to fans of the game. Many television commercials directly target the “NFL Fan” companies will have to find different ways to advertise and promote their products one obvious example are beer suppliers such as Bud Light and Coors Light that have very targeted advertising. The economical impact of an NFL Lockout could be devastating to companies that rely on the NFL season to promote their products.

Another issue that would become apparent if the 2011-12 NFL season was not played would concern the billions of dollars of NFL “stock and inventory” that many retailers possess. Without a season there is very little reason for consumers to want to continue to purchase NFL items. This could have a direct effect on the price of NFL items, for instance a team’s jersey might sell for $70 now, but without a season the price could fall causing profits to be cut. This could also affect similar sports such as College Football, fans of the game of football might turn their support to college athletics because of the lack of the NFL. This could cause Cross elasticity of demand to change from NFL apparel to College football apparel. Cross elasticity of demand is defined as a measure of the influence of a change in one good’s price on the demand for another good. The NCAA could benefit from increase of sales due to the absence of the NFL, therefore end up increasing College Football apparel selling prices causing NFL apparel to drop in price and profit.

Critique on Gas and supply and demand

I am critiquing the article that Melissa did on “The Supply & Demand of Gas”. I think that she chose a very interesting and relevant article. Everyone in our class, assuming they have a car or at least their license, is affected by the price of gas. This article makes one realize how would wide events and disasters control things in our every day life’s including the price we pay for gas and oil. Melissa makes valid points throughout her blog. I think her statements about the supply and demand issues with gas are dead on. It has become apparent that U.S. citizens are most likely going to purchase gas at any price, due to the simple fact: that they need it. Since the demand is rising, it is changing the supply and demand chart and where the equilibrium meets. It is true, due to the fact gas is a natural resource, the supply is not going to change therefore it will remain the same. The same facts go for oil. Due to natural disasters, such as those in Japan that Melissa had stated, the need of oil is increasing, however it is not that easy to come up with as much as needed.

I found it very interesting how she related the increase of price to the increase of consumption of gas as irregular. It is true that is does not follow the rules concerning price elasticity. She mentioned how usually when price goes up demand decreases; I found it very useful for her making this comment. I however cannot agree with her blaming it on Asia. I feel that all of the countries affect this problem since everyone has strong needs of this substance. I did not understand her comment on the fact of rising prices in gas was in hopes to decrease the demands of oil. I feel that she may have meant to state the opposite.

The use of the supply and demand curve with gas was very relevant with our class. I believe that Melissa made it clear that no matter the price of gas, there will always be consumers and it will always have high demand. However I believe she could have made her points on oil a littler more clear and included more on what the political risk may be for the United States and other countries. I think the article left on a very influential note that gas prices are going to lower throughout the second half of the year and maybe Melissa should have included that. I feel that its important to know that, I would like to know that gas is going to decrease in price soon.

Critique of "Has Apple Finally become a Monopoly"

For my critique I chose to examine the post about Apple potentially becoming a monopoly. I found this article to be particularly interesting because the computer industry started as such a wide competitive market and the idea of another monopoly in computer technology to be concerning.

I agree with many of the points the author of the post brought up about Apple's current status. It is true that Apple's Macs are wildly popular, most notably amongst college students and that they do in fact face very stiff competition from opposing companies like HP, Dell and Gateway. I would have liked to have seen the blog post go into a little further detail into how well the market actually is shared and how big of a player Apple is. I also believe that the blog post needed to provide a little more background info into exactly how much of the digital music market is controlled by Apple. I'm aware that Apple's iTunes is synonymous with digital downloads and is the most popular source for people to download music, however I would like to know exactly how much competition other digital download firms like Rhapsody provide for Apple. I also believe it would be nearly impossible for Apple to ever reach truly monopolistic status on the digital download market, because even now illegal downloading of music is easy to access and very popular in today's age. An Apple monopoly would allow them to raise the prices of their music unfairly, but at the cost of losing many more people to the increasingly popular world of torrents and other free download methods.

Critique on "NFL Lock-Out"

I agree with many of the issues stated in the "NFL Lock-out" blog, but I believe there may be other issues to consider. As the blog stated, the owners would not have to pay the salaries or benefits of their players; however, I believe everyone involved (players, owners, fans, businesses,etc) will be negatively affected by a lock-out. The NFL is a billion dollar industry bringing in revenue to many different corporations and individuals. If a lock-out occurs and there is no NFL season, this industry will take a major hit. Fans will not be buying tickets to games so stadiums will be financially affected. Stadiums must pay taxes to the areas where they are located, so less revenue will mean less tax money coming into a locality. Stadiums also employ many workers in different capacities, who will now face the prospect of unemployment. The blog states that stadiums could be used for other purposes, but that is not a guaranteed option. It may be impossible to book events that would generate as much money as a NFL season full of games. NFL fans buy millions of dollars of merchandise every year. This marketing industry would also be affected, although probably not as drastically as other areas. Fans who would normally purchase souvenirs at a game will no longer have the opportunity to do so. The entertainment industry would also take a major hit. The NFL season is one of the most watched sporting events on television. Advertisers rely on reaching potential customers during televised games, especially during the Super Bowl. Television networks who have contracts to televise NFL games will have to find replacement programming which will affect their ratings and their marketshare of viewers. Players will be harmed by a lock-out as well. The sport's megastars will probably come through a lock-out with minimal financial damage thanks to large endorsement deals. However, the regular, everyday player will have to supplement his income in some other way. There may also be evidence of the substitution effect which could be beneficial to other sport's industries. The NCAA may be the biggest winner, as true football fans will watch more college football. Football fans will substitute NCAA football for NFL football. This will lead to increased revenues for industries associated with college football teams. All of these factors will have an impact on the owners of NFL teams. Owner's profits will be affected as revenue is lost in all areas of the industry. The NFL lock-out will have devastating effects on all parties involved.

critique of "effect of file sharing on record sales"

               I chose to critique this article because I have been considering the loss in revenue for the music industry from music piracy for a few years now. We are in the Era of Technology, hence why it is so fast and easy to download music for free. However, there is a dispute between researchers and music producers regarding the cause for loss of album sales. According to Harvard Business School professor Felix Oberholzer-Gee, music pirating is not the cause for the loss in music sales. In fact, the two are almost completely irrelevant.

                I agree with both Ty and Oberholzer-Gee that many teens and college students are constantly downloading illegal music. They claimed that this illegal downloading is actually a form of “free” promotion for artists’ music. In order for a radio station to play music, artists have to pay them a ton of money just for one song. However, this is how people are informed about the various artists and then they decide to go buy their album. Illegal downloading of music is essentially the same type of promotion as the radio, yet it doesn’t cost the artist anything to promote their music. When people (mainly high-school and college students) download songs off the internet, they are viewing a free sample of the artists’ music. Then, once they’ve decided that they are really interested in the artist, they will go buy the album. Hence why the first half of this year saw the number of illegal music downloads and music sales directly proportionally: they both increased.

                I really liked how Ty explained that the economics of the music production are characterized by significant fixe costs and because albums are now broken apart, the revenue earned from a new album is much lower. The music industry should consider strategizing or colluding with Itunes regarding their sales of individual songs. Itunes is a main source for music downloading across the nation; if the music industry negotiated a plan with Itunes, they might be able to regain their loss of sales from albums.

                Ty also did a nice job explaining the effect that advancements in technology have over the music industry. Unfortunately for artists, technology advancements are only going to increase in the future. Artists and firms affiliated with the music industry really need to consider coming up with a strategy fairly quickly to prevent the internet from these future technology advancements, such as enabling people to download full albums for free, not just singles. Maybe the music files online could allow potential consumers to preview the song online but not actually download it. This way they are able to hear the artist on their computer as well as on the radio, before they decide to purchase their albums. Another possible idea, although much more tedious, could be to set a limit on downloads per computer and/or per artist. Otherwise, I have no doubt that the internet will soon allow free downloading of albums; this will be a detrimental set back to the entire music industry across the world.