Apple didn't just change it's pricing structure for music that's non-DRM, it also added several thousand (i don't have the actual count in front of me) new DRM-Free songs as well for purchase.

I agree that Horizontal is winning, and that people don't like to be held to one choice. However, they knew that when they got into the arrangement...breaking the deal to do what you want is only going to make trouble for you, not for the manufacturer.

You are quite uninformed. No amount of soldering or hacking is going to get an iPhone to work on Sprint or Verizon. The iPhone is a GSM phone. Sprint and Verizon are CDMA networks. It's not possible. The only other GSM network in the US is T-Mobile, and there is zero indication that people are leaving AT&T for T-Mobile in droves (quite the opposite, actually). The vast majority of people that are unlocking iPhones are doing so to use them in foreign markets where the iPhone is not available. Pure and simple. That people are going through so much trouble and expense to get their hands on Apple's product is a GOOD PROBLEM to have. Welcome to the 21st Century.

Another tech pundit wanna-be who starts down a rabbit trail and ends up at a ridiculous conclusion. "Forced them to usa the device with ATT?" With a gun pointed at their head? 270K sold the first 30 hours because they were forced?

Apple did in fact license their OS back in '96-'97. And all they did was go deeper into debt. Glad you aren't running Apple.

Unlike MSFT? The convicted monopoly? Still being looked after by numerous states for their monopolistic practices? Yeah, please continue to give them props because they have all the answers on how to wipe out the competition, write a crappy OS and still make it unsecure.

Apple chose to use DRM? Wrong. DRM was forced on them by the music labels. What would Apple care if they used DRM or not?

This article just doesn't look at what Apple offers and says "Yes, it works for them." Because it does, Compare stock prices with MSFT.

I like having Apple make a complete solution. When all of those people who upgrade to Leopard do so, they will know ahead of time their Macs will run it w/o issue because Apple made the hardware. No need to go out and buy more RAM and a faster graphics card. That says a lot about how Apple operates and why they are so successful.

This argument has some truth to it, but it's too simple.

First, Microsoft went horizontal to the extent that they tacitly encouraged piracy to increase their installed base (it's hard to compete with free). They only cracked down on piracy when their market matured. But generally, the platform isn't horizontal: It only runs on one hardware platform, and all of the basic, needed applications are also sold by Microsoft. Alternatives were driven away by anticompetitive bundling and, yes, vertical integration (the first version of Office after Windows 95 used secret system APIs that no competitor had access to).

As far as Apple goes, vertical integration has the advantage of making a machine built of disparate parts act like an efficient, seamless whole. It is also what allowed Apple to finally kick accessory designers over to USB, which had spent the last two years languishing on the (relatively) horizontal PC platform.

I have no idea where you get the idea that iTunes is all about DRM. Jobs told the record companies that DRM didn't work. He added it as a sop to them, but he also insisted on terms that were more consumer friendly than any legal service had offered up to that point. Now, of course, DRM is going away because it doesn't work.

Over 90% of all content on iPods has always been ripped from CDs. DRM has never been a significant variable in the iTunes/iPod equation--except to exclude closed, vertically integrated formats like WMA, and a tangle DRMs with arbitrary, punitive, and inconsistent terms.

Finally, placing the blame for the exclusive contract with AT&T on Apple... well, where to begin? The cell phone industry is badly broken and extremely resistant to change. That's not Apple's fault.

In other words, I don't think things break down as simply as you'd like them to.

"Apple's iPod has been all about digital rights management..."

An interesting assessment, but not one that's very informed. You might recall that the iPod predated the iTunes Music Store by quite some time. If Apple's ipod were "all about digital rights management", did they come pre-loaded with DRM'd content from Apple. or did those early iPod buyers just listen to the sounds of silence for the first 18 months until Apple finally took the wraps off the music store?

Apple's iPod has been all about digital rights management...

Yes, and this is "vertical" integration since Apple owns rights to all the music that people play on it.

(snickers at the mindlessness of such arguments.)

In the world I live in, most iPod music is DRM-free, CD-quality music because it came from DRM-free CD's that Amazon mailed me, that I found at my local music store, etc. Almost all the rest is off-the-internet recording of programs of interest -- podcasts, the intertubers sometimes call 'em.

The only "vertical" is to the (hmm, free) iTunes running on my computer, that organizes my library of files, adding album covers, track names, artists, etc. so that I don't spend hours to get this from the "sharing" networks.

Can't get much more horizontal than that, and other posters have cited evidence that Steve Jobs Gets It. It ain't about "vertical;" it's about "integrated" so the user doesn't have to hire himself out as a janitor to his PC, getting paid $0.37 per hour for performing banal housekeeping.

How can one person be so wrong, so many times, in one article? Niiiiiice job.

Man, have you been living under a rock? 99.999999% of the unlocking that has been done is by a software hack. No soldering irons or tweezers. If you're going to write about the iPhone, try to at least get your research right.

So Apple won't get the $18 per month from AT&T. Do they still get to make the profit on the phones that hackers buy? I am trying to find the negative here.

This article is quite biased.

"Unlike Microsoft, Apple wouldn't license its operating system for use on anything but Apple computers."
I don't know what's wrong for Apple to limit its OS to its computers, do you expect to see Halo 3 on Wii and PS3?

In the case of MS, it is worse. MS windows runs on all PCs but softwares from other companies do not have access to all the APIs. MS opens backdoor to its own software and bundles them to the OS. The author just forgets IE, office, mediaplayer, MSN and the intrusive WGA. It also does not provide information for other OS to make them windows-compatible. And this is horizontal? Apple does not do thid on OS X. iPhone was similar but they finally plan to release the SDK.

Vertical? Horizontal? Does anyone even consider these valid models any more? I thought that two-dimensional thinking died out with something called the 'Internet."

By the way, this week Apple's market cap rose above both Intel's and IBM's. I see its 'horizontal' business model is really dragging it down.