Premium Essay

Apple Tying

In: Computers and Technology

Submitted By WalterFrosch
Words 561
Pages 3
I. Introduction
After all the financial problems it had in the 90’s, Apple Inc. grew up to a multi-billion corporation and is nowadays more than probably one of the most famous and one of the most popular companies in the world. Besides its best-known products such as the Ipod, the Mac and all the other consumer electronics and computer software products the company is selling, Apple recently entered the smartphone market with the so-called Iphone. First released in USA on June 29 2007, the Iphone got often sold out in the official Apple shops and by the end of 2007, the Iphone starting entering the European market (Ment, 2007). Since the start of the project until June 2009, 26.4 millions of Iphones have been sold worldwide. Available nowadays in nearly 90 countries, Apple’s main launching strategy consisted in selling the product through one single provider per country. The purpose of this paper is to analyze whether the tying of the Iphone to a unique provider is economically profitable.

First, this paper introduces the nature of the tying contracts between Apple and a unique provider. Second, it discusses the economic aspects of the dilemna. Third, this paper examines the potential conflict that might arise between the competition council of the different countries and Apple’s strategy. Last, this paper finishes with a conclusion.

II. The nature of the tying contracts between Apple and a unique provider
As already stated before, Apple’s launching strategy consisted in selling its Iphone through one single provider per country. Unfortunately, it will probably never be made public in what the different contracts between Apple and its different operators consists in. But in 2008, after a judicial decision, the French competition council revealed several aspects of the contract between Apple and its operator Orange. The deal between them lasts during five

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