It's *NOT* About The Number of Players In The Marketplace! : A Response To John Lilly, COO, Mozilla Corporation

by M. David Peterson

Update: via a follow-up comment from W^L+,

Never forget the vendor-neutral part, because without it the switching cost makes choosing a vendor a high-stakes decision and subjects consumers to all sorts of abusive treatment from their suppliers (the vendors and those who distribute the products / services of the vendors).


Nicely stated!

[Original Post]
I just left the following as a comment to John Lilly's recent post entitled "A Picture's Worth 100M Users???" I'm reposting it here (with a few grammatical fixes and inserted extensions. I've linked to the original for comparison) because I believe the point is an important distinction to understand, and that is this,

It's *NOT* about the number of players in any given marketplace! It's about maintaining a competitive atmosphere, resulting in better products.

Of course one could argue it's also about the number of choices you have, and to a point I agree. That said, the next time you travel overseas and find yourself fumbling around in your electrical plug adapter kit, ask yourself the following question,

"Do I really wish I had just a few more adapters to choose from?"

Of course, maybe the one adapter that you need is the one you lost on your last trip, or is the one you determined ahead of time to not be of any use, so chose not to bring it along. In that case, then the answer would probably be "Yes!" But in most cases what is likely to be stated is "Why can't we all just agree on one standard and be happy with it?" Of course, that brings us back full circle to the importance of competition, as without competition the incentive to build better product is diminished, which collectively comes together to form the following,

It's not *just* about competition, nor is it *just* about choice. It's about balance.

My recent comment follows,

John's Blog � Blog Archive � A Picture's Worth 100M Users???


2 Comments

W^L+
2007-06-16 14:37:43
Of course it is! Until there are three to five major competitors, with none of them being dominant over the others, the interests of consumers suffer. That said, I agree with you that Apple should be shooting for number one, just as Mozilla and Opera should be doing. Competition really is what it is all about. Competition benefits the end-user (particularly when there are vendor-neutral standards across the industry), while the various forms of "opoly" benefit the vendor(s).


Never forget the vendor-neutral part, because without it the switching cost makes choosing a vendor a high-stakes decision and subjects consumers to all sorts of abusive treatment from their suppliers (the vendors and those who distribute the products / services of the vendors).

M. David Peterson
2007-06-16 14:59:25
@W^L+,


>> Of course it is! Until there are three to five major competitors, with none of them being dominant over the others, the interests of consumers suffer.


Hmmm... not so sure I agree w/ that statement. For example, in a new market where there is only one player (e.g. an emerging, unproven market pioneered by an innovative company (take Palm for example)), is the consumer really at a disadvantage until such time as four or five players have entered the market?


Of course, competition is *ALWAYS* a good thing, and as the dust of this aforementioned market settles, and the top two players emerge, then we're looking at a completely different situation, one in which a critical mass marketplace has evolved, and the top two players left holding a majority of the market share, leaving the others either bankrupt or filling niche markets that the larger players are unable, unwilling, and/or uninterested in serving. I think in this regard, we are probably on the same page, as it is numbers 3 through n that become the innovators, paving the way w/ exciting new products and approaches that the top two companies won't touch due to the risk involved with losing their dominant market shares if they make a mistake.


A perfect example: The new Ask.com. Ask can afford to be cutting edge, pioneering new and innovative approaches to the field of online search because for all intents and purposes as the #4 search engine, and to be completely honest, they really have nothing to lose.


>> Competition really is what it is all about. Competition benefits the end-user (particularly when there are vendor-neutral standards across the industry), while the various forms of "opoly" benefit the vendor(s).


Absolutely agree!


>> Never forget the vendor-neutral part, because without it the switching cost makes choosing a vendor a high-stakes decision and subjects consumers to all sorts of abusive treatment from their suppliers (the vendors and those who distribute the products / services of the vendors).


Great point! Am bringing this to the top of the post now. Thanks for your feedback, W^L+!