iPod Tax and Greedy Apples

Posted:
in iPod + iTunes + AppleTV edited January 2014
Is the iPod tax for real, and if so, how broad is it? CNN reports today that Apple gets 10% for each car installation, accessory, etc.



Does the tax only cover hardware? Or, if someone comes up with a new product such as a case or one that is video based and wants to target iPod owners, is she charged if she wants to say "It works on an iPod"?



A slightly different note: What is it with Apple thse days and turning proprietory? The AV cable for the 5G iPod is expensive and very low quality; it's mini-plug is simply rearranged, but they claim it is "made especially for the iPod". What a rip off!



Is the iPod too much of an icon or will actions like this eventually backfire?
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Comments

  • Reply 1 of 24
    e1618978e1618978 Posts: 6,073member
    I don't mind them ripping us off - it gives them more ammo to fight Microsoft with. Imagine all the revenue they are going to get with 10% of the cost of ipod adapters for 40% of the cars in the US.
  • Reply 2 of 24
    Quote:

    Originally posted by e1618978

    I don't mind them ripping us off - it gives them more ammo to fight Microsoft with.



  • Reply 3 of 24
    kickahakickaha Posts: 8,760member
    Quote:

    Originally posted by Bergermeister

    Is the iPod tax for real, and if so, how broad is it? CNN reports today that Apple gets 10% for each car installation, accessory, etc.



    Does the tax only cover hardware?




    I *believe* it is only for products that use the dock connector, which is Apple only hardware to begin with. So, you need to license the connector for your product, and that's where the fees come in.



    I don't *think* that this applies to things like cases and such, but I could be wrong. There may be a license fee for using the name 'iPod' in advertising, etc.
  • Reply 4 of 24
    andersanders Posts: 6,523member
    10% for each car installation? Of what? The price of the car?
  • Reply 5 of 24
    Quote:

    Originally posted by Anders

    10% for each car installation? Of what? The price of the car?



    Most likely the cost of the option. But your suggestion would be nice.
  • Reply 6 of 24
    Quote:

    Originally posted by e1618978

    I don't mind them ripping us off



    Who is "ripping off" who exactly? I missed that part.
  • Reply 7 of 24
    andersanders Posts: 6,523member
    Quote:

    Originally posted by Chris Cuilla

    Most likely the cost of the option. But your suggestion would be nice.



    But isn´t it standard? Thats how I understand it.



    I just don´t get how they would set a price on it.
  • Reply 8 of 24
    Quote:

    Originally posted by Chris Cuilla

    Who is "ripping off" who exactly? I missed that part.



    Presumably Apple, with all its "Made for iPod!11!!" after-market add-ons.
  • Reply 9 of 24
    e1618978e1618978 Posts: 6,073member
    Quote:

    Originally posted by Anders

    But isn´t it standard? Thats how I understand it.



    I just don´t get how they would set a price on it.




    It is an option on Volvos - but I don't know how much it costs.
  • Reply 10 of 24
    Quote:

    Originally posted by Anders

    But isn´t it standard? Thats how I understand it.



    I just don´t get how they would set a price on it.




    I thought they were (mostly) options. But I haven't gone shopping for a car in a while so I don't know.
  • Reply 11 of 24
    Quote:

    Originally posted by Gene Clean

    Presumably Apple, with all its "Made for iPod!11!!" after-market add-ons.



    Ah...If that is it, then it seems that the bar for "ripping us off" has been lowered significantly.
  • Reply 12 of 24
    Quote:

    Originally posted by Chris Cuilla

    Ah...If that is it, then it seems that the bar for "ripping us off" has been lowered significantly.



    Well, if you don't mind paying $49 for an FM tuner, then you have no bar at all. But it's not just that: other non-Apple add-ons are made artificially more expensive by adding 10% on top of the original price because, well, um, they used the word iPod on it.
  • Reply 13 of 24
    Quote:

    Originally posted by Gene Clean

    Well, if you don't mind paying $49 for an FM tuner, then you have no bar at all.



    Well...first you are changing the subject (it was car accessories made by someone else). Second, if I don't buy the thing I am not getting ripped off. Third, if I do, evidentally, I have made some value-choice that suggests that the $49 (in your example) is worth it to me and thus I am not getting "ripped off"



    Quote:

    Originally posted by Gene Clean

    But it's not just that: other non-Apple add-ons are made artificially more expensive by adding 10% on top of the original price because, well, um, they used the word iPod on it.



    Then don't buy them.



    They aren't doing anything nefarious, illegal, deceitful or even unethical. One or more of these seems to be necessary prerequisites for the "ripping off" charge. Unless, of course, the bar fo "ripping off" is so low that it is basically "they are charging more for something that I wnat them to."



  • Reply 14 of 24
    gene cleangene clean Posts: 3,481member
    Quote:

    Originally posted by Chris Cuilla

    [B]Well...first you are changing the subject (it was car accessories made by someone else). Second, if I don't buy the thing I am not getting ripped off. Third, if I do, evidentally, I have made some value-choice that suggests that the $49 (in your example) is worth it to me and thus I am not getting "ripped off"



    Well, seeing as the claim "ripping me off" is not mine; I'm only talking about hypothetical situations that could be used to justify "ripping me off".



    e#s made the claim: I'm only speculating on his reason(s) to say that.





    Quote:

    Then don't buy them.



    You'll get far with this attitude. What if tomorrow they crancked up the price of OS X 10.5 to eleventybillion dollars. What are you supposed to do, "don't buy it"? That's an easy thing to say, but not as easy to do.





    Quote:

    They aren't doing anything nefarious, illegal, deceitful or even unethical. One or more of these seems to be necessary prerequisites for the "ripping off" charge. Unless, of course, the bar fo "ripping off" is so low that it is basically "they are charging more for something that I wnat them to."



    Of course. But "ripping off" was not meant to signify illegal activity, rather, it was a metaphore for "overcharging". Where you got the "nefarious, illegal, deceitful or even unethical" escapes me.
  • Reply 15 of 24
    Quote:

    Originally posted by Gene Clean

    Well, seeing as the claim "ripping me off" is not mine; I'm only talking about hypothetical situations that could be used to justify "ripping me off".



    e#s made the claim: I'm only speculating on his reason(s) to say that.




    Well, you appeared to be arguing in agreement with e#s.



    Quote:

    Originally posted by Gene Clean

    You'll get far with this attitude. What if tomorrow they crancked up the price of OS X 10.5 to eleventybillion dollars. What are you supposed to do, "don't buy it"? That's an easy thing to say, but not as easy to do.



    Actually...no...quite easy. Just don't buy it.



    Quote:

    Originally posted by Gene Clean

    Of course. But "ripping off" was not meant to signify illegal activity, rather, it was a metaphore for "overcharging".



    Um...then it isn't Apple (car makers case) and...if they are selling the product (whatever other example you wish to offer), then, obviously they are not overcharging. Ripping off is clearly about being unfair or cheating in some way. Apple is doing neither.



    P.S. It actually is not a metaphor.
  • Reply 16 of 24
    kickahakickaha Posts: 8,760member
    Assuming a non-monopolistic market:



    If someone is overcharging, then the market won't buy it.



    If the market is buying it, then obviously, enough people think it *is* worth the price, and, therefore, it isn't overcharging.



    *You* may not think it is worth the price, but if the market will bear it, then obviously, others do. They buy it, and you... don't. Simple. It truly is as simple as "If you think it's too much, don't buy it, and find an alternative." That's how you let a company know that their competition is the better value, and they'll have to adapt, or fade.



    Free market and all that, y'know?
  • Reply 17 of 24
    A little browsing on Apple's site dug up the following:



    http://www.apple.com/legal/trademark...rdparties.html



    It is unclear, however, if you must first become a developer before having the right to use the "works with..." phrase. Legal-speak is so pursposefully vague!



    There are other pages around this one that are interesting to read, too.



    For example, it seems that noone can use the image of an apple for anything anymore because BigApple has bought rights to the image of an apple. I wonder if they will ask apple juice manufacturers to pay a 10% "made for iPod" tax. No wonder the Beatles and Apple have been having a hard time! Also, the list of names that people cannot use includes "Jackintosh"; drat, guess I'll have to change my son's name.



    A slightly different angle: does Apple have to pay the Macintosh Growers Association a 10% tax for the use of the Macintosh name?
  • Reply 18 of 24
    Quote:

    Originally posted by Kickaha

    Assuming a non-monopolistic market:



    Yes, well, with an 83% of market share, that's a pretty big assumption.
  • Reply 19 of 24
    kickahakickaha Posts: 8,760member
    Quote:

    Originally posted by Gene Clean

    Yes, well, with an 83% of market share, that's a pretty big assumption.



    Er... are there other options? Yes.



    Are there other *reasonable* options? Yes.



    Are there other options that are priced highly enough such that the companies selling them are still making money? Yes.



    Not really a monopoly yet. What's your cutoff, percentage-wise, for a market leader to have a monopoly?



    Definition from investorwords.com:
    Quote:

    A situation in which a single company owns all or nearly all of the market for a given type of product or service. This would happen in the case that there is a barrier to entry into the industry that allows the single company to operate without competition (for example, vast economies of scale, barriers to entry, or governmental regulation). In such an industry structure, the producer will often produce a volume that is less than the amount which would maximize social welfare.



    Well, 83% is certainly not all, and not even reasonably 'nearly all'. The barriers for competition are not high, IMO. MP3 players are still pretty simple to make, it's all about the usability. There's also little to be gained from economies of scale, as I see it - any company, say, Creative, who is making players is going to have large enough orders to manufacturers to do pretty well on that front. And there's no governmental regulation.



    So no, I don't think it's a monopoly, nor do I think that it's yet to the point of being an intertwined ecosystem that makes insurmountable barriers to competition.



    Heck, I keep hearing about how the iPod is *more* expensive, so there are obviously cheaper, more feature-filled players out there. Options exist. Pick the one that fits your needs at the price you want. Don't buy the ones that don't. Vote with your wallet. Yay capitalism.
  • Reply 20 of 24
    a_greera_greer Posts: 4,594member
    Quote:

    Originally posted by Bergermeister

    Is the iPod tax for real, and if so, how broad is it? CNN reports today that Apple gets 10% for each car installation, accessory, etc.



    If it says iPOD compatible and has the logo, they pay a fee to apple for using their trademark, and there is a certim level of QC that Apple enforces I would assume they themselves test each product to make sure the ipod logo isnt just slapped on any crap. if it just says "compatible devices include ipod" or some such, they pay nothing. It is like the windows logo, you can say anything is "windows compatible" or "runs on windows" but the logo has a fee and quality testing tied to it. People pay for the windows logo and people pay for the ipod logo.
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