Yes, but the iPhone was never considered to be totally open.
There is nothing inherently wrong with a monopoly. The problems start when the monopoly does something that prevents a competitor from entering or competing in the market.
The market isn't OS X, its operating systems. The market isn't iPhone OS X, its smartphones.
They interrupted the law correctly.
Yes you could say there are "sub markets", but you are being to granular. The market would be something like "wireless devices". You could split that into cellphones and smartphones. The smartphone market consists RIM, Nokia, HTC, Apple, etc.
Each manufacturer has a natural monopoly on their own products. Microsoft is the only company who can produce Windows, or Xbox. Sony is the only company who can make Playstation.
This is exactly how the market is supposed to work, vote with your wallet.
See, I don't think I am being too granular, though I understand why it would seem so to most. Microsoft was deemed to hold a monopoly in the Desktop PC market. This was a sub market to the overall computer market. They didn't have a monopoly in the rest of the computer market (servers, graphics workstations at the time, etc).
You are right, that I am being granular in that it is not normal for a brand to be considered a market on its own. But, in the case of Macs and now the iPhone, I think it is clear (to me anyway) that these
platforms are distinct and unique enough to classify as markets in and of themselves. You have applications written just for them, you have developers that write just for them, you have vendors producing 3rd party apps and hardware just for them, you have customers who shop just within this market place. They are their own ecosystems and markets. If that much is true, then yes, Apple holds a monopoly within those markets. I am not saying other companies should be able to sell Macintosh or iPhones. Apple owns the platform, just as MS owns Windows. But, just as it was unfair for MS to impose anticompetitive policies on developers writing for Windows, it is unfair for Apple to restrict unfairly what developers can write for the iPhone.
I am a software developer. I have co-workers and friends who have apps on the App Store. I have a couple ideas for a couple apps (but no time with 2 kids under 2 years old at home) that I think would be very successful. But, I'll be damned if I am going to put any time or effort into writing it for the iPhone if I have no way to know if it will be approved and worse, that if it is approved, Apple will arbitrarily decide to remove it later, without a real reason given.
As you say, MS is the only company that that can produce Windows. And Apple is the only company that can produce the iPhone and iPhone OSX. But, even MS does not have the right, now by law, to restrict applications from running on Windows simply to give themselves a competitive advantage.
Even taking monopoly out of the equation, a dominant company that controls the platform, i.e. market, is in the wrong to restrict developers from competing with them for sales within that market.
Edit: besides, again, even taking anticompetitive practices and monopoly position from the discussion, this type of behavior might benefit Apple in the short term but it is unbelievably bad in the long term. There are thousands if not millions of apps written and running for Windows and MacOSX. Independent developers can create their apps, written to these APIs and know that they will run. They know that they will be able to sell them to users of these platforms. Making the sales is up to their skills as developers and marketers. How many, do you think, would develop for these desktop platforms if MS or Apple started imposing an approval process? How many more would drop if said approval process are slow, arbitrary, unbelievably inconsistent, random and closed. And how many more would leave if, beyond these caveats, MS and Apple also started rejecting based on who might be competing with their own offerings within the platform? If developers cannot know if their app will be approved until after they have put in the hundreds or thousands of hours of development, paid third party's for graphics work and third party APIs and perhaps contract development work and finally completed the app, why would they take this risk? This is people's livelihood we are talking about. People are putting in a lot of time creating products and putting their trust in Apple that their hardwork will not be arbitrarily shutout. It would be like you showing up at work everyday for a year, forgoing regular paychecks, with the expectation that you will be paid at the end of the year, only to be told that your company decide they were not going to pay you. Any other platform that allows developers to know their apps, developed according to the rules, will get a fair chance to succeed in the market and not simply be banned from the market.