How the Hold Up Problem Explains the Flash Wars (GigaOM)
The hold up problem is particularly severe in the IT sector. Building an Internet company on a foundation consisting of proprietary software owned by others is akin to building a house without owning the land under it. When software is sold in binary form, the buyer is subject to hold up by the vendor; if the software needs to be changed in the future, such changes can only be done with the cooperation of the original vendor at the price that the original vendor demands. By relying on open source, a company can invest in developing its product without fear of being held up down the road. Therefore, open source is an economically powerful solution to the hold up problem."
Posted Aug 9, 2010 2:15 UTC (Mon)
by Trelane (subscriber, #56877)
[Link] (16 responses)
This statement lacks justification. Particularly when the context is locking down the iPad/iPhone development environment to only Apple-blessed languages and frameworks, which is at least half of the core discussion. (The anti-flash on the web side is fine, but the discussion is both about flash the plugin as well as flash the development environment).
Posted Aug 9, 2010 5:32 UTC (Mon)
by khim (subscriber, #9252)
[Link] (4 responses)
Huh? What are you talking about? You have read what Steve Jobs wrote about flash, right? If the words "we cannot be at the mercy of a third party deciding if and when they will make our enhancements available to our developers" is not "justification" your seek, then what is? Apple's Flash Jihad is all about control. It's not about battery life or anything else: it's about Apple's ability to fully control everything (think about it: even in cite about you see "our developer" - like "our slaves"). Flash of course is incompatible with this approach since it's controlled by different entity.
Posted Aug 9, 2010 5:39 UTC (Mon)
by tzafrir (subscriber, #11501)
[Link] (1 responses)
Posted Aug 9, 2010 6:09 UTC (Mon)
by gmaxwell (guest, #30048)
[Link]
Posted Aug 10, 2010 0:29 UTC (Tue)
by Trelane (subscriber, #56877)
[Link]
Posted Aug 10, 2010 8:57 UTC (Tue)
by dgm (subscriber, #49227)
[Link]
Posted Aug 9, 2010 5:39 UTC (Mon)
by gmaxwell (guest, #30048)
[Link] (3 responses)
Permitting flash would provide Adobe valuable leverage against Apple. "We won't give you this feature unless you do X", "We won't release a new version for your platform unless you pay Y", "Highest performance to the phone maker with the highest bid!", etc.
Open but still non-apple tools don't present the same problems. Instead we could argue that allowing them would disrupt Apple's ability to "hold-up" their own customers and partners with obvious potentially negative effects on Apple's future income. The article doesn't go into that point since the focus is on on Flash but it can be understood within the same framework.
Posted Aug 9, 2010 12:28 UTC (Mon)
by Karellen (subscriber, #67644)
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Posted Aug 9, 2010 20:57 UTC (Mon)
by brouhaha (subscriber, #1698)
[Link] (1 responses)
It's not about leverage, it's about Apple trying to ensure that there is no way for executable content any fancier than can be done in HTML and Javascript to get into the phone without Apple getting a 30% cut. If Apple allowed Flash on the phone, executable content could leak in from other places, rather than just the App Store.
Posted Aug 9, 2010 23:02 UTC (Mon)
by gmaxwell (guest, #30048)
[Link]
Posted Aug 9, 2010 6:23 UTC (Mon)
by dlang (guest, #313)
[Link] (6 responses)
has any other computer manufacturer ever taken the position that it was illegal to run apps on their OS unlees they were developed exclusively with their tools?
the fact that they have rejected apps because the initial development language was not one they approved of (even though the program was converted into the apple approved language before being compiled) is a new low.
Posted Aug 9, 2010 13:57 UTC (Mon)
by dwheeler (guest, #1216)
[Link] (5 responses)
Posted Aug 9, 2010 17:12 UTC (Mon)
by dlang (guest, #313)
[Link] (4 responses)
the fact that they claim the right to prevent you from modifying the hardware that you have purchased, and to prosecute anyone who makes modification kits available to people is so far beyond reasonable that I don't know how to describe it.
Posted Aug 9, 2010 17:29 UTC (Mon)
by jspaleta (subscriber, #50639)
[Link] (3 responses)
We aren't that far away from this sort of thing happening. Cable and sat-tv subscribers already deal with this sort of equipment rental situation to get service. As game consoles as a market morph into a game subscription revenue model more firmly, the retail sales of the equipment will become less important.
-jef
Posted Aug 9, 2010 17:39 UTC (Mon)
by dlang (guest, #313)
[Link] (2 responses)
I believe that the courts have ruled that 'rental' agreements that are structured like a purchase are in effect a purchase, so console rental agreements would have to not have large up-front fees that are comparable to purchasing the device.
satellite and cable services only do rentals on the cheap, basic boxes, for any of the more advanced boxes (the DVR ones) they require the use to purchase the hardware.
but in any case, the point is that the example of console makers is not a good one to hold up. it does make Apple not the first vendor around to do this sort of thing (and come to think of it, TI is taking a similar position towards their programmable calculators).
But it does put them in a very small segment of the market, and the only ones doing this for something sold as a general purpose device.
Posted Aug 9, 2010 20:29 UTC (Mon)
by foom (subscriber, #14868)
[Link] (1 responses)
Not true in the USA for cable service. It's essentially *impossible* to buy a cable box of any kind, DVR or otherwise, with the notable exception of the TiVO. All others are only available for monthly rental from the CableCo.
Posted Aug 9, 2010 20:33 UTC (Mon)
by dlang (guest, #313)
[Link]
How the Hold Up Problem Explains the Flash Wars (GigaOM)
Beep... beep... beep... bullshit detected.
This statement lacks justification.
Beep... beep... beep... bullshit detected.
Beep... beep... beep... bullshit detected.
Beep... beep... beep... bullshit detected.
Beep... beep... beep... bullshit detected.
It does only when you take it out of the context that provided the justification.
How the Hold Up Problem Explains the Flash Wars (GigaOM)
[...]the party with ownership of a key resource may gain the ability to hold up its partner, demanding an unreasonably high price.
Flash is a proprietary software development platform and products built on Flash are at risk of hold ups.
How the Hold Up Problem Explains the Flash Wars (GigaOM)
"We won't give you this feature unless you do X", "We won't release a new version for your platform unless you pay Y", "Highest performance to the phone maker with the highest bid!", etc.
It's not just that. Although Flash is gratis, Adobe is still the only entity allowed to distribute it, or authorize others to do so. Adobe could theoretically pull the current version of Flash player, and no-one would be legally allowed to distribute copies of Flash, either as a download for existing devices, or on new devices, even if the current installer was still "in the wild". And given the lack of alternate implementations, if you had relied on Flash in any way, you'd be completely stuffed with no recourse.
Apple "permits" Flash on the Mac, and yet somehow Adobe doesn't seem to have any "valuable leverage against Apple" there. I fail to see how Apple permitting Flash on the iPhone/iPad would give Adobe any leverage either.
How the Hold Up Problem Explains the Flash Wars (GigaOM)
How the Hold Up Problem Explains the Flash Wars (GigaOM)
How the Hold Up Problem Explains the Flash Wars (GigaOM)
I believe some game console makers have imposed exactly such conditions.
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