In Praise of a Closed Market

Microsoft and Intel simplified choices—and popularized computers

It's an article of faith in the tech industry that competition is a good thing for everyone. Without the freedom to create companies with novel products in competitive markets, we might never have seen some of the innovations that have transformed our lives—PCs, e-mail, iPods, and the rest. Still, for consumers, there definitely can be too much of a good thing.

The history of the PC provides a good illustration of where competition works for consumers and where it doesn't. Saying this won't win me friends in competition-crazed Silicon Valley, but I think dominance by an Intel (INTC ) hardware design and Microsoft (MSFT ) software has been good for both business and home users.

LACK OF PRESSURE. Standardization, which limits competition on features and turns it into a fight for the lowest price, led to rapid economies of scale and plunging costs. Buyers of PCs didn't have to deal with baffling choices about "platforms," which unrestrained competition usually spawns. So consumers could buy complex products with more confidence than they would have had in a wide-open market.

Of course, there is a downside. Had Microsoft been subject to real competitive pressure—something stronger than the single-digit market share that Apple Computer (AAPL ) has been able to muster for the past decade or so—it might have been forced to make Windows better, faster.

There is no doubt that after crushing Netscape in the late 1990s, Microsoft let its Web browser, Internet Explorer, languish until the growing popularity of Mozilla's Firefox forced it to make long-overdue improvements. But other than that, I don't think anyone would be better off if businesses and consumers had to choose from among several competing software systems.

CONSUMER CONCERNS. The competitive instincts of consumer-electronics companies have led to a different result in high-definition televisions. Manufacturers refused to go for simplicity and standardization, and this has slowed the transition to HDTV.

Faced with confusing options, incompatibilities, and poor information, consumers fear they'll make an expensive mistake, so they hold back. This market will not realize its potential until the industry makes the choices less risky.

There is one jarring irony in this argument. The standardization that allowed computers to show up in practically every home has unleashed a variety of price competition that doesn't benefit consumers in every sense. True, the use of commodity components and standard designs has taken the cost of PCs ridiculously low; you can buy a usable desktop for $300 and a laptop for $500, and no one ever complains about having to pay too little.

COMPETITION'S DOWNSIDE. But the race to the bottom has had two baleful effects. One is that while there are dozens of products, choice is mostly an illusion. Once you decide on specifications, the offerings within any class are essentially identical. The pressure to squeeze out every penny of cost yields PCs as commoditized as wheat or cement.

Second, cost pressures have all but wiped out after-sale customer service. It's no accident that Apple, isolated in its market niche, enjoys both the best reputation for customer service and the fattest margins on computers. Dell (DELL ), by contrast, fell into a vicious cycle of cost-cutting that led to cutbacks on warranties and service.

I am not arguing that hot-blooded competition is bad. On the contrary, it beats any alternative. Telephone and cable have proved that with limited competition, you get high prices and terrible service. But it's important to remember that, despite glowing testimonials from technologists and economists, competition is likely to hurt as well as help.


novel [usually before noun]

not like anything known before, and unusual or interesting

novel idea/approach/method etc

What a novel idea!


1 [countable]TCN a picture in a book, article etc, especially one that helps you to understand it:

The book contains 62 pages of illustrations.

2 [uncountable and countable] a story, event, action etc that shows the truth or existence of something very clearly

illustration of

a striking illustration of 19th century attitudes to women

For the purposes of illustration, some of the more important symptoms are listed below.

dominance [uncountable] 우월/우세/지배

the fact of being more powerful, more important, or more noticeable than other people or things [ dominate]

dominance of

the continuing dominance of the army in Uganda

political/economic/cultural etc dominance

the economic and political dominance of Western countries

dominance over

television's dominance over other media

baffle1 [transitive]

if something baffles you, you cannot understand or explain it at all:

The question baffled me completely.


not controlled or limited:

unrestrained power


1 [transitive] to make a series of things happen or start to exist:

New technology has spawned new business opportunities.

2 [intransitive and transitive]HBAHBF if a fish or frog spawns, it produces eggs in large quantities at the same time


the downside the negative part or disadvantage of something:

Digital cell phones offer more security, but the downside is that they have less power.

the downside of

The downside of the book is that it is written in a rather boring style.


1 be subject to something

a) if someone or something is subject to something, especially something bad, it is possible or likely that they will be affected by it:

All flights are subject to delay.

Prices are subject to change.

b) if something is subject to something such as approval#, it depends on that thing happening before it can happen:

The funding is subject to approval by the Board of Education.

2 be subject to a rule/law/penalty/tax etc if you are subject to a rule, law, penalty etc, you must obey the rule or pay an amount of money:

Violators are subject to a $100 fine.

3 [only before noun] formalPG a subject country, state, people etc are strictly governed by another country:

subject peoples


1 [transitive] also muster up something to get enough courage, confidence, support etc to do something, especially with difficulty [= summon (up)]

muster (up) the courage/confidence/energy etc to do something

Finally I mustered up the courage to ask her out.

Senator Newbolt has been trying to muster support for his proposals.

'It's going to be fine,' replied David, with as much confidence as he could muster.

2 [intransitive and transitive] if soldiers muster, or if someone musters them, they come together in a group [= gather]:

In April 1185, he began to muster an army.

languish [intransitive]

1 if someone languishes somewhere, they are forced to remain in a place where they are unhappy

languish in

Shaw languished in jail for fifteen years.

2 if something languishes, it fails to improve and develop or become successful [ founder; ≠ flourish]:

The housing market continues to languish.

The shares are languishing at just 46p after yesterday's fall.

West Ham United are currently languishing at the bottom of the league.


1 not done, paid, returned etc by the time expected:

an overdue gas bill

The library books are overdue.

The baby was a week overdue (=it was expected to be born a week ago).

2 something that is overdue should have happened or been done a long time ago

overdue for

He was overdue for a shave.

We welcome this announcement and think it's long overdue.

better ˈoff [no comparative]

1 having more money than someone else or than you had before [≠ worse off]:

She'll be about £50 a week better off.

well-off (1)

2 happier, improved, more successful etc [≠ worse off]

better off with/without

I think she's better off without him.

be better off doing something (=used to give advice or an opinion)

He'd be better off starting with something simpler.

ˌhigh-defiˈnition [only before noun]

TDT a high-definition television or computer shows images very clearly

Jar past tense and past participle jarred, present participle jarring

1 [intransitive and transitive] to make someone feel annoyed or shocked:

His enthusiasm jarred.

His words jarred Harriet.

jar on

The screaming was starting to jar on my nerves.

2 [intransitive and transitive] to shake or hit something in a way that damages it or makes it loose:

Alice landed badly, jarring her ankle.

3 [intransitive] to be different in style or appearance from something else and therefore look strange

jar with

There was a modern lamp that jarred with the rest of the room.

—jarring adjective

commodity plural commodities [countable]

1PE a product that is bought and sold: 상품

agricultural commodities

Commodity prices fell sharply.

2 formal a useful quality or thing:

Time is a precious commodity.


expressing anger, hatred, or a wish to harm someone: 해로운, 악의있는

a baleful look

—balefully adverb


1 [countable] if you find your niche, you find a job or activity that is very suitable for you:

Amanda soon found her niche at the club.

He's managed to create a niche for himself in local politics.

2 [singular]BB an opportunity to sell a product or service to a particular group of people who have similar needs, interests etc

niche in 틈새시장

He spotted a niche in the market.

3 [countable]DHTBB a hollow place in a wall, often made to hold a statue


1 violent and cruel in a way that hurts someone physically:

a vicious murder

a vicious killer

Keep away from that dog, he can be vicious.

2 very unkind in a way that is intended to hurt someone's feelings or make their character seem bad [= malicious]:

Sarah can be quite vicious at times.

a vicious personal attack on the Duchess

She was shocked by the vicious tone in his voice.

3 unpleasantly strong or severe [= violent]:

a vicious gust of wind

a vicious headache

—viciously adverb:

He twisted her arm viciously.

—viciousness noun [uncountable]

vicious circle also vicious cycle [singular] 악순환

a situation in which one problem causes another problem, that then causes the first problem again, so that the whole process continues to be repeated

cutback [countable usually plural]

a reduction in something, such as the number of workers in a company or the amount of money a government or company spends:

The shortage of teachers was blamed on government cutbacks.

cutback in

cutbacks in funding for libraries

A fall in donations has forced the charity to make cutbacks.

sharp/drastic/severe cutback

sharp cutbacks in the military budget


having very strong emotions such as anger or love, that are difficult to control [= passionate]

testimonial [countable]

1BE a formal written statement describing someone's character and abilities [ reference]

2 something that is given or done to someone to thank or praise them, or show admiration for them:

a testimonial dinner in honour of Senator Frank Flint

1 glowing report/account/description etc a report etc that is full of praise:

I've had glowing reports from Neil about your work.

2 in glowing terms using a lot of praise:

He speaks of you in glowing terms.

—glowingly adverb


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