Apologies for a second Apple-related post in a row, but I thought this example might prove to be a decent case-study of competition in the marketplace. One of the new products that Apple recently introduced was iWeb, a new program that makes it easy “to create websites and blogs — complete with podcasts, photos and movies — and get them online, fast.”

Why do I bring this up? The reason is that a small software company has been working on a similar program, Sandvox. “Sandvox makes website creation elegant, intuitive and fun.” Karelia Software released a public beta last week in response to rumors that Apple was releasing a program called iWeb so that people wouldn’t think that iWeb came first. This is not the first time that this has happened to Karelia. A similar conflict existed between Karelia’s Watson program, and Apple’s Sherlock.

So why do we care? While many people might shrink from the challenge of taking market share from a large corporation, Karelia has embraced the challenge as an opportunity to provide a better product to its users. From Karelia’s blog:

What Sandvox can offer is a compelling alternative to iWeb, just as Watson turned into an alternative to Sherlock 3; Path Finder is an alternative to Finder; NetNewsWire and a host of others are alternatives to Safari’s RSS reader; and Adium can replace iChat. As each of these offer solutions to the limitations provided by Apple’s software, so too will Sandvox.

…As we move forward past version 1.0, we will be able to further distinguish Sandvox from iWeb by focusing on features that our users demand that will never be a part of the iLife suite.

Here’s tipping a hat to a company that understands that competition exists not to stifle, but to bring out innovation; and for embracing that challenge to produce a better product.