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Apple’s Big Business: Mises is Right, Sen Warren is Wrong

Senator Elizabeth Warren speaks at a rally in Washington Square Park, 2019.

Competitive pressures abound in a market-based economy, and companies need to determine quickly if there is a need to adjust their efforts or pivot their product offerings. Recently, Apple quit its pursuit for developing a self-driving car and has redirected efforts toward the development of in-home robotics. And this summer, we can preview what an automatized butler service could be like via the Apple TV Plus series, Sunny, slated to air in July.

Apple’s competitive advantage in relation to product innovation and iOS integration is what propelled the iPhone’s popularity within the United States, but on a global scale Apple’s smartphones can’t seem to catch up with Android. At roughly 70 per cent market share, Android dominates the international smartphone space and, in India, Android holds an impressive 95 per cent. Apple also falls short as a favored smartphone choice in China where Vivo, Huawei, and Honor are preferred.

Brands battling it out for attaining market share is to be expected but battling with bureaucrats is also now becoming commonplace. And, for Apple, political officials are targeting the firm’s core competitive strategies.

The DOJ along with the FCC claim that Apple is monopolizing the smartphone space via iPhone’s ecosystem (which seems hardly worrisome given the above statistics). Washington’s desire to target Apple and criticize how it curates its own products is truly befuddling, especially since Apple is not the only firm who prioritizes the use of certain services that are related to its products. And while Apple has gone to great lengths to entrench its position, it is important to bear in mind that continued success can never be guaranteed. AOL’s seemingly secured status during the 1990s and its walled garden approach couldn’t save it – and it is unlikely to save Apple in the long run.

Nevertheless, a particular point of contention for those eager to bash Apple’s success, as expressed by Massachusetts Senator Elizabeth Warren, is the green and blue bubble messenger mess. According to Senator Warren, green bubbles are “ruining relationships.” For those unaware, blue bubbles appear when Apple users text each other, but when text bubbles are green, it means a message is being shared by a non-Apple user and this can impact the transmission quality of texts, pictures, and videos.

Message quality is certainly an annoyance for consumers but not nearly as much for those of us who bought DVDs by mistake in the early 2000s when we had a Blu-ray player at home. The battle between Blu-rays and DvDs is now a moot point, and Apple’s iPhone ecosystem may also face the same fate over time if the government were to simply let the market play out.

Time will test the best of what Apple has to offer. And so far, the benefits derived from Apple products have extended far beyond the smartphone sector. It is perhaps worth noting that Warren Buffett believed the iPhone to be “enormously underpriced” and he said he’d give up his private airplane before he would the iPhone. “What it [iPhone] does for you, it’s incredible” and, if to add to Buffett’s sentiments, what Apple’s success has done for other sectors is also incredible.

In addition to empowering small businesses who have leveraged Apple products for transactions in a variety of ways, Apple has also supported the creation of adjacent innovations which can have spillover use effects in the marketplace. For instance, in 2021, Apple’s Advanced Manufacturing fund awarded $45 million to Corning Incorporated to further research and development for creating the toughest smartphone glass ever made, Ceramic Shield. The various forms of protection and connection that Apple has established for its hardware, its software, and its content is truly impressive and should be a point of pride for the United States.

Economic advancement occurs when companies increase their capacity for market linkages thanks to business growth. When production and sales increase, a larger and more diversified market occurs igniting new demands for market offerings and new opportunities for job seekers and entrepreneurs. Indeed, businesses depend on vast networks of suppliers, distributors, and ancillary service providers. Businesses never operate in silos and firms survive and thrive when value is derived through market interactions. As it turns out, Apple’s walled garden has produced rather strong vines.

The bigger the firm, the more extensive its needs, and not only for operations and marketing purposes but also for attracting and retaining talent. And big business tends to have deep pockets for supporting the philanthropic interests of their employees. For example, Apple offers a one-for-one match on monetary donations given by employees and will contribute $25 for each hour an employee volunteers their time to a charitable organization of their choosing. In December 2022, Apple recorded that the Employee Giving program “raised over $880 million, with more than 2 million volunteer hours logged.”

The reach and impact of larger firms extends far beyond market sales, and Ludwig von Mises put it perfectly when stating that “It is big business that makes all the achievements of modern technology accessible to the common man. Everybody is benefited by the high productivity of big scale production.”

Mises goes on to assert that “It is silly to speak of the ‘power’ of big business. The very mark of capitalism is that supreme power in all economic matters is vested in the consumers. All big enterprises grew from modest beginnings into bigness because the patronage of the consumers made them grow.”

Mises’ words ring loud and true in the case of Apple, and it is a shame that those in Washington, like Senator Warren, can’t seem to grasp this fact. The government’s ever-growing interest in deterring business expansion, along with granting federal agencies greater say over marketplace matters, is a complete disservice to our nation’s progress. Inducements for investors or incentives for entrepreneurs will dissipate over time if the government continues to make it clear that when businesses aim high, they become a bullseye.

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