Why Apple is Beating Microsoft
Well, it's official -- the era of the PC is over ... at least according to APC Magazine as exclaimed in its recent article, "The Era of the PC is Over: Why Apple is Beating Microsoft." The Switch to a Mac blog cites the following "money quotes" from that article:
- "The recent joint interview with Steve Jobs and Bill Gates at D5 highlighted for me what makes Apple a great company, and why Microsoft continues to struggle on all fronts except Windows and Office."
- "But like Steve said at D5, the era of the PC is largely over. Most innovation now is happening on what he calls post-PC devices, like music players and mobile phones. And that is what Apple is focusing on."
- "Microsoft, however, still doesn't get it and I believe the lack of understanding comes from the top. Gates still maintains that tablet PCs are going to take over the world, that Microsoft will eventually dethrone Google to be the new leader in search, that Zune will eventually rival the iPod for market share and that Microsoft has already conquered the smart phone market. Somebody please tell the man he is dreaming."
- "Apple knows that its core strength is writing and designing software and wrapping it in sleek (but nowadays relatively generic) hardware. If Apple wanted it could also throw money into areas like search and gaming but Jobs is more disciplined then that."
- "Consumer electronics are already too complicated and consumers know it. Post-PC devices need to be tightly integrated, and at the moment, the only company that does this, and does it well is Apple."
Source: "The Era of the PC is Over: Why Apple is Beating Microsoft" by Dany Gorog, published in APC Magazine
While I think many of the comments in the original piece were insightful, I think there is a far bigger problem with the overall tone: simply put, Microsoft is not the enemy.
For Apple, its core business is "selling" software attached to devices. Just like Microsoft, Apple collects money based on software/hardware that contains intellectual property; and the return on investment is made from selling lots of copies of the work at a set price.
Apple expects to make amazing leaps in innovation and then get paid for the innovation itself. This is identical to Microsoft.
When juxtaposed with Google or IBM/Linux, Apple and Microsoft are fraternal twins, the others are a different species!
Google makes money by selling ads against other people's creative works. Their model is really no different than ABC, NBC or CBS - except for one big way. The major networks pay for studios to develop fluff that encourages the audience to watch the real product - advertising. We call that fluff TV shows. Google got rid of having to create their own content, and now rides a cross between a symbiotic and parasitic relationship with other people's creative works. Google is not interested in innovation that might sell a million copies, they only want innovation that keeps people coming back to view more ads - and there is nothing wrong with that.
For IBM/Linux, if you remove the ideological foundation from Open Source, those who wish to productize it are looking to get money from services. Again, those who "sell" linux are looking to move boxes of software, but only as a medium to get service and support contracts. Innovation that breaks new ground is not particularly interesting unless it shows a clear consulting/support pathway. Why else is it that it took altruism in the form of Canonical (Ubuntu) to really drive the user interface forward, when IBM clearly was willing to spend big on Linux? Usability wasn't a primary goal for IBM.
Ultimately, we are left with those who innovate and plan to capture value from the idea itself (MSFT and Apple) and those who sell services leveraged off a product.
I personally believe you get more groundbreaking work from those who can see a direct connection between the idea and the reward, than from those who see the idea as just a stepping stone to cash.
Microsoft needs Apple to push new ideas and to break new ground. Apple needs Microsoft to supply products to markets Apple cannot, and is not interested in serving. Apple also needs Microsoft as a partner in the message that "ideas and innovation have intrinsic value, and one should be willing to pay for that innovation".