this post was submitted on 05 Feb 2024
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They certainly do compete with each other but it's just a general misconception that competition lowers prices.
Pepsi and Coke have been competing with each other for decades and Coke has larger market share. So why doesn't Pepsi just lower prices? Pepsi even has the diversified income of doing more than drinks. Lowering prices doesn't lead to market share and Coke can just match the price.
Look at Apple's growth in the American market, they can sell a product that is significantly more expensive than competitors and still gain market share.
I still think you're looking at competition slightly wrong.
Coke and Pepsi do compete with eachother, along with the rest of the drink market. And overall prices in that industry are pretty low, some people will buy other competitors (the store brand Cola's). But overall competition is working.
Apple only kinda competes. Sure a phone is a phone and a laptop is a laptop. But unless someone is entering the market for the first time. They already have applications they are looking to use, so if you need an iPhone, you need an iPhone, and same for a Mac. But if you're an android or Windows user, suddenly you have a lot more choice because there is lots of competition!
The reason companies setup walled gardens, or pay for exclusive access to a piece of media is to erode competition. If a user wants that thing, they can only get it from that one place.
Are you're saying competition doesn't exist because products aren't the same?
I'm trying to not disparage your argument here but if I go with your reasoning then I feel like there is no competition so that you can justify prices not going down. Where I believe competition simply doesn't lower prices because capitalism desires more profit not less profit. Why fight over scraps when you can create a market by manipulating people into thinking: Green chat bubble mean poor so me no use RCS or open blue bubble because green bubble mean poor.
If competition didn't exist for apple then they could give android an imessage app.
I'm saying the competition can only exist because products that actually fill the same need.
If you decide that you need product A, and have multiple options on where to get that, you have competition.
So if you're looking for a Cola, you have options.
If you're looking to play StardewValley, you have options where you want to buy it and which platform you want to play it on, you don't need to buy a new game system to play it.
If you're looking to play the latest Zelda game, you don't have options, you need to buy a Switch.
If you're looking to watch Ozarks, you don't have options, you can only watch Netflix.
If you're looking to just have something playing on TV and don't really care what it is, you have options.
If you're looking to listen to music, you have options, most of the steaming services have most of the music.
If you're looking to be able to text friends, you have options, any phone will work.
If you're looking to be able to iMessage friends and for your case only iMessage will work, iPhone is your only option.
Competition is complex and is more dependent on a consumer needs than just classification of what a product is. In your earlier point you used Apple as an example of a company that can increase prices despite competition, but really Apple is a prime example of a company putting up walls to an ecosystem making it really hard to leave once you're in.
Generally in the current tech landscape there barely is any competition outside openish platforms. But with tech, you often can't look at competition as product A vs Product B. Like while we can say that Window competes with OSx, it's harder to say that a Mac laptop competes with a given Dell laptop (because what you can do with each OS is different to different people).
This is why I like to think of all the tv streaming services as different types of food stores. There is no supermarket that supplies everything, you're forced to have memberships to the single butcher, the single milk man, the single bakery, etc. if you want a particular food, there is currently no (or very little) competition. You can certainly survive on just bread, and people are happy to do that, but that bakery can and will increase prices whenever because they aren't really competing with the butcher.
This isn't how market competition is done though. Otherwise every product you listed is a monopoly.
I thought I listed a bunch of cases where there were options (and not monopolies). But yes, 100% inside many ecosystems are monopolies, and those ecosystems/walled gardens have been slowly expanding every chance these companies have.
I agree but they are not technically market monopolies.