The very clever Josh Knox points me to Steve Jobs’s open letter about Flash. Following up on my last post on double marginalization, he wonders if Apple’s distaste for Flash can be explained in those terms. Josh is absolutely correct.
The money sentence in Jobs’s letter is this:
Though the operating system for the iPhone, iPod and iPad is proprietary, we strongly believe that all standards pertaining to the web should be open.
Replace “though” with “because” and you have a succinct explanation for why companies like Apple would want to support open standards. Apple makes its margin on the iPhone; no need to let Adobe make a margin on content or development. If Apple can replace Flash on the web with open standards, Apple will make more money, and consumers will be better off by not having to (indirectly) pay the Adobe tax. Pretty much the only loser in this is Adobe.
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Do we run the risk of not seeing quality software, like what Adobe has been making?
Ryan, if Adobe added value for Apple’s customers, Apple would have an incentive to support them. But if the open standards are just as good as the proprietary tool, then Apple has an incentive to support the open standard.
The “toll booth” metaphor that I used in the last post is instructive—toll booths don’t add any value. They just collect fees. So in general, the incentive to reduce the other margins is not going to threaten productive businesses. I’m not too worried about future software innovators. They will do just fine, as long as they add value.
So by this token we shouldn’t expect the kind of partnership between Facebook and Apple that we’ve seen with Facebook and Microsoft?
Right, Adam. If social networks based on open standards are just as good as proprietary social networks, Apple will push the open ones. But I’m not sure what interest Microsoft has in a closed social network other than they own part of Facebook.