The idea is that putting a lower price floor on iOS devices differentiates them as a premium product, so that lay people aren't inclined to think that an Android Phone with a lower price is "as good as" an iPhone.
I believe the understanding is that Apple is charging the carrier directly for each handset they obtain from Apple. However for market reasons, carriers normally futz with prices at their own will. Apple is preventing this, because it's in their interest to control the market price for iProducts. Not just that, but Apple is also making demands on the price window for the plans as well thus forcefully molding the kind of demographic that could be owning an iPhone.
and again, why is this bad? marketing 101, price shapes the perceived value of a product. lots of examples here on HN were elasticity, etc have been discussed. locking down re-sellers should be perfectly fine.
Of course it's in Apple's interests to control prices, the question is whether it's in the public's interests. I'm undecided.
Apple can always control prices by being the exclusive seller of their products, that would be a valid way to do it. By selling it to a third party they, I think (again, am undecided) they give up the right to say how much it can be sold for. In the same way they can't stop you from selling your iPhone to a friend for cheap.
What they can do is not to sell to retailers who they feel are damaging their brand. In effect, this is exactly what they are doing, however they are doing it through written agreements rather than through observation.
> Of course it's in Apple's interests to control prices, the question is whether it's in the public's interests. I'm undecided.
Whether it is or not, I'm not sure that the fines are the way to go. If "the public" thinks that these practices are anticompetitive, why not simply declare that contract provisions to that effect won't be enforced in their jurisdiction?
It's bad because it's anti consumer. People in the US seem to have forgotten the fact that the whole capitalist system ostensibly exists to make things better for the consumer.
I cannot understand people who champion anticompetitive actions like Apple's ebook conspiracy with stupid logic like "They can afford an extra dollar for an ebook if it makes the market fair".
> People in the US seem to have forgotten the fact that the whole capitalist system ostensibly exists to make things better for the consumer.
No, it exists to make things better for the capitalist, which is why the socialists who named the system called it "capitalism" -- the entire system revolves around the interests of capital.
Its true that part of the sales pitch that capitalists use to the masses (who significantly outnumber them, and without whose complacency capitalism could not stand) is that it has the effect of making things better for the consumer, but that's not the purpose of capitalism at all.
Really ? I though that capitalism was an economic system in which trade, industry and the means of production are controlled by private owners with the goal of making profits in a market economy.
Clearly I need to phone up the Oxford dictionary as they say nothing about the consumer or market fairness so they must have gotten it wrong all these years...
That's highly subjective. I'd claim that by being allowed to lower prices, the carriers will probably sell more iPads, putting more people in the hands of an abusive company like Apple.
That's probably the short-term effect, however, a potential longer-term effect is hurting the iPad brand image as an elite product and status symbol, depressing demand for the particular brand.
Another potential effect is less outlets selling the iPad, because if there is the potential for others to undercut the price on the same product, it becomes less valuable item in the lineup.
Another potential effect is less sales through Apple's own retail channels if some other outlets are selling below Apple's price but Apple tries to maintain it, which could mean more sales but still less money going to Apple.
