Good rant Maurice - and not OT for weekend QCOM discourse.
I was setting up my dad up with his retirement foray into the world of computers and his first Windows 95 $500 machine tonight. I was talking him through the initial set up over the phone.
I was trying to explain to my dad the difference between getting on the internet with a Browser vs America Online. Of course, there are basically two browsers to choose from - however one came on the $500 Compaq 180 MHz Gxi (cyrix processor to attack the Intel monopoly) and it was unlikely that my dad would even think about going to the trouble to get the Netscape one. Anyway, having to explain that he could just get on using America Online, without using a browser, I realized that you are right - there are competitive alternatives to browsers besides Netscape and Internet Explorer. Who knows what other ones might emerge? On the other hand, America Online is in some sense an artifact of a pre-Browser world in which easy access to the net was defined in terms of a menu of pre-defined services.
So yes, there are competitive alternatives, but I still am a little sad to see the latest glimpse of competition get wiped out so soon. It could have been a contendah... Doesn't that bother you at all? As a champion of a great start-up like QCOM why not a moment of chagrin for the early demise of the promise of innovation in the net world. Maybe there are 100's more to take its place, but what if this was the last best chance for competition and innovation?
You put the view that all monopolies are assailable and temporary very well. You said:
"If you think Microsoft is such a great monopoly, charging a fortune, then buy the
shares - they are for sale! Or find ways to crack the monopoly. Qualcomm found a
way around the last mile. Ericsson is trying to find a way around Qualcomm's
monopoly. If Microsoft gets confiscated by the mob, then Qualcomm won't be far
behind."
I can agree that monopolies don't last - but can't you see that they can do a lot of damage to innovation in the meantime? At some point, smart and innovative folks stop trying to fight the dominant firms and are simply bought out or never try. Some great ideas are scrapped for fear that they would damage the installed base of the dominant firm. In the extreme, capital is simply not available to anyone not working within the orbit of the dominant firm. Simply too risky.
But so what--you say. All it takes is one David to take on the Goliath. The others simply didn't have the spunk and the brilliance. The prize is the monopoly so don't take away the prize.
But the real reason that monopolies don't last is not because finally some David takes them on. It is in the nature of monopolies that after being extremely innovative themselves, (Carnegie in Steel) they reach a stage when the best thing to do is to raise prices (or reduce investment in innovation) and coast. In the meantime, they keep prices up while giving up market share to a competitive fringe. This is the stage when all they have left is the high market share and so they milk it - see AT&T vs MCI. For 10 years did AT&T ever cut price to MCI's level? No, it wasn't in their interest to do so.
Just another weekend rant. |
