[NEWS] Palm Pre and iTunes: Cat & Mouse Game Hits the Big Time

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If Palm's main goal in playing Cat and Mouse with Apple and iTunes Sync is media attention, as Derek posited during the PalmCast, then they're achieving their goal. None other than the Grey Lady, the New York times, is taking note in a story titled "Rivalry Between Apple and Palm Intensifies." Writer Jenna Wortham rehashes a story that PreCentral.net readers know well, from the fact that iTunes and the Pre now play together to Palm's complaint to the USB-IF.
More reactions after the break!
Wortham did manage to secure a few more statements on the issue form Palm, though none of them are going to shock you. Douglas B. Luftman, an associate general counsel for Palm, defended Palm's approach of masquerading as an iPod saying it was acceptable because it is in response to Apples restriction.

“We think we are consistent with our compliance. Were not trying to appear to be anything were not — except for interoperability purposes with iTunes.”

Michael Gartenberg, vice president for strategy and analysis at Interpret, a market research firm based in Los Angeles and New York, did the best job of summing up why Apple would be so steamed: “Apple understands that seamless relationship between the iPod, the iPhone and iTunes. Its a big driver behind why consumers are buying their devices, and theyre going to try and protect that.”
And Tim Wu, a professor at Columbia who specializes in telecommunications law, copyright and international trade, commented:

“Theres something very unseemly about what Apple is doing... Its very counter to the ideals of openness, which is a concept Apple pioneered in computing.”

On the other hand, in a story appearing in The San Francisco Chronicle,
Robert Lande, co-founder of the American Antitrust Institute and a professor at the University of Baltimore School of Law noted challenges Palm and others face in establishing that Apple is behaving in a monopolistic manner:

1. Identify a market in which Apple has a monopoly. While it has more than 70 percent of the MP3 player market, you could argue that music-playing cell phones also compete in the same space, which would dilute Apple's dominance.
2. Show that Apple has monopoly power by indicating where there are significant barriers to entry for competing companies.
3. Prove that Apple engaged in anti-competitive behavior - actions that were designed for no real benefit other than to hurt a competitor.

Lande said that's difficult to prove and that the courts have generally given companies a lot of leeway in defining any moves as beneficial in some dimension.
With Apple's deep pockets, if this cat and mouse game keeps going and going (like the Energizer bunny), it is pretty clear who will win in the end. Hopefully, Apple will see that enabling Palm's customers to purchase music through iTunes is a good thing as noted by J. Gerry Purdy, the chief analyst of mobile and wireless at the research firm Frost & Sullivan:

"This would offer an opportunity for increased revenue for Apple."


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