Zittrain's first example is how Apple has shifted its business model. Originally, people began bought the Apple II units in part because VisiCalc was available. Now Apple has to approve third-party software written for the iPhone.
JONATHAN ZITTRAIN: Problem number one is no more surprises. You don't get two guys in a garage cooking up something like the spreadsheet -- Internet telephony like Skype, Kazaa and other peer-to-peer music sharing, email -- the World Wide Web itself came from a physicist who was goofing around. So to lose that ability to be able to cook up something and send it around and see whether it works, that would be a terrible loss.He didn't have to go back that far. Apple has been a corporate control freak for many years. One of the big reasons that the PC and Microsoft took off so quickly was because no one company owned all aspects of the overall system, while so much of the Mac belonged to Apple. Microsoft is no saint, but the split of control between OS and hardware is a major reason why the PC has something like 95 percent market share. But I hadn't thought about vertical and horizontal control of a product not only stifling innovation, but creating a channel for governmental control.
TiVo sued EchoStar not long ago for patent infringement. They said that EchoStar made a digital video recorder that was too much like a TiVo. They won, and EchoStar owes them 90 million dollars. But then they asked for something more. They got an order from the judge that said within 30 days, EchoStar had to fry by a remote upgrade all but a handful of the EchoStar DVRs already sold and placed in [LAUGHING] living rooms around the world.As he put it, in many homes, the EchoStar became the EchoBrick. Suddenly what you bought is no longer yours, because someone else can control it.
But this isn't a freak occurrence. When a PC is connected to the Internet, all sorts of programs phone their corporate home and look for "upgrades." In many cases, the user doesn't even know it is happening. What happens when the upgrade bombs and turns the PC into a brick? What happens to customer relations? And who wants to become part of a government operation and wind up needing congressional immunity, like the telecom carriers? Companies like to control markets, but particularly in the high tech world, the controlling hand can come back to choke you, like an economic Dr. Strangelove.