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Amazon Effect Takes a Bite Out of Apple

Today's public unveiling of Amazon's DRM-free MP3 music download service is the tipping point we all have been waiting for lo these many months.  Adoption of a competitive, rights-liberated download service by a giant retailer like Amazon means that the point of no return has been crossed in the war against content tyranny.   Mark this date for the kiddies to look back on some day.

Launched with two million songs by 18,000 artists, a sweet deal with EMI and Universal, Amazon can introduce both freedom of choice and a little price competition to the music world mix.  By shaving a dime off most songs--$.89 versus the standard $.99 on iTunes--Amazon points out the old Silicon Valley saw that "better is cheaper" and makes consumers think twice.  Once Amazon works out some of its bugginess (Om Malik does a nice job comparing Amazon to iTunes today), it will permanently change consumer perceptions and expectations. 

The point is, the days of over-controlled licenses and perpetual copyrights are staggering to their demise.  Like Jason Statham's badass character Chev Chelios in the film Crank, the DRM-mongers are living on adrenalin alone; the end, however, is nigh.

iPhone Rebate Fiasco, Whiners Cheapen Apple's Brand

Apple is not used to whiners: the culture of Apple's customers--if not Apple itself--changed yesterday and the implications are huge.

In Palo Alto, there were lines around the building.  In San Francisco, hundreds of people queued up to be the first to own one (and if my friend's son is an example, many in line were paid by others to wait in the midday sun).  All this hoopla just to be the first on the block to own the coveted iPhone. 

For my part, I waited--and risked being tagged a laggard--because I need a 3G phone and an iPhone 3G version was slated for Christmas.  In the meantime, friends and colleagues who early adopted have been lording over me and everyone else they run into with an air of superiority.  They have, for months, been the center of attention where ever phone calling is permitted.  And they have enjoyed being special.  The high price of the iPhone? A non-issue, as the phone is in a league by itself, they argued, not fair to compare. 

So, after months of enjoying these rich psychic rewards (in an age, mind you, when a day's lead time over others should be considered a luxury) these self-same technorati turn out to be just a pack of price-sensitive whiners after all.  For shame.  And worse, Steve Jobs bit, turning the technically-compelling, sensually-pleasing iPhone into a blue-light special commodity.  Bad move.

Look, everyone knew the price of the iPhone would come down--certainly by Christmas and folks, if you didn't know, this is the start of the Christmas season.  Besides, Apple aficionados have always been willing to go where the beige crowd fears to tread.  Sure, the cost is a little higher, but the value is too--and it;s fun to be different.  Why the hand-wringing now?  The fact is, the iPhone has brought to Apple a lot of non-traditional Apple consumers.  Entering the bloodied theater of mobile phones was a big boy move, but it has had its consequences: Apple must now learn to deal with a whole new crop of customers--and in a highly price-sensitive market.  No, Apple is not used to whiners.  But, Steve Jobs blinked and this is a harbinger of bad things to come.  We've entered the "price" phase of competition months before it was necessary.  These are holiday ill-tidings indeed.