Saturday, July 18, 2009

Apple And The Palm Pre: It Was Sync Or Swim

Apple's decision to ban the Palm Pre from accessing the iTunes store is a move by the iPod maker to ensure that it continues to siphon consumer dollars into its own pockets at every end of the spectrum.

Earlier this week an Apple spokesperson confirmed that Apple iTunes update 8.2.1 would make a concerted effort to ban non-iPod and non-iPhone hardware, including the Palm Pre, from syncing with the iTunes store.

The update appears to be a retaliation against Palm, which announced iTunes syncing abilities in May, before the hardware was launched.

It shouldn't be too surprising to anyone that Apple has made the move to cut the Palm Pre off at the pass. After all, Apple makes no bones about the fact that it is a business designed to make money. Mac and Apple devotees understand that they are paying a premium for the hardware they purchase because it is completely different from anything else on the market.

In many cases, Apple's hardware drives its software sales. But Apple's software also drives hardware sales. And Apple makes money at both ends. The iPod and iPhone maker makes a margin on every device it sells. Apple also gets a cut of sales through the iTunes store. The company even takes a percentage of each app sold through the App Store.

Living in Apple's ecosystem means playing by Apple's rules, and ultimately that means lining the pockets of Steve Jobs and cohorts. That's no surprise and, for many, that's perfectly acceptable.

Jon Rubinstein, chairman and CEO of Palm, was once an Apple executive and one of Jobs' advisers. In fact, Rubinstein was in charge of the iPod division at Apple before he left the company. It seems fair to say that Rubinstein is in a unique position to know exactly how the gears turn at Apple.

Yet Palm still made the decision to publicly announce that the Pre would sync with the iTunes store, essentially throwing down a gauntlet. Maybe Rubinstein thought his past relationship with Apple and Jobs would give him a pass. If that's the case, he obviously thought wrong.

Apple refreshes or tweaks its iPod lineup on almost a yearly basis to entice loyal customers into upgrading to the latest and greatest. While the refresh cycle may in part be due to new technology, it would be naive to think it wasn't also an attempt to line its own coffers.

And Rubinstein and Palm should have known better than to try and dip its hand into one of Apple's profitable cookie jars.

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