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How, and Why, Apple Overtook Microsoft
HughPickens.com writes James B. Stewart writes in the NYT that in 1998 Bill Gates said in an interview that he "couldn't imagine a situation in which Apple would ever be bigger and more profitable than Microsoft" but less than two decades later, Apple, with a market capitalization more than double Microsoft's, has won. The most successful companies need a vision, and both Apple and Microsoft have one. But according to Stewart, Apple's vision was more radical and, as it turns out, more farsighted. Where Microsoft foresaw a computer on every person's desk, Apple went a big step further: Its vision was a computer in every pocket. "Apple has been very visionary in creating and expanding significant new consumer electronics categories," says Toni Sacconaghi. "Unique, disruptive innovation is really hard to do. Doing it multiple times, as Apple has, is extremely difficult." According to Jobs' biographer Walter Isaacson, Microsoft seemed to have the better business for a long time. "But in the end, it didn't create products of ethereal beauty. Steve believed you had to control every brush stroke from beginning to end. Not because he was a control freak, but because he had a passion for perfection." Can Apple continue to live by Jobs's disruptive creed now that the company is as successful as Microsoft once was? According to Robert Cihra it was one thing for Apple to cannibalize its iPod or Mac businesses, but quite another to risk its iPhone juggernaut. "The question investors have is, what's the next iPhone? There's no obvious answer. It's almost impossible to think of anything that will create a $140 billion business out of nothing."
Uh. They most certainly did NOT create the smartphone sector. And they sure as fuck didn't do it out of "nothing".
Now I admit, yes, Apple's been disruptive, in a good way, for the industry. But can we stop slobbing the Apple knob?
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Technically if you adjust for inflation MSFT from 1999 still has the market cap crown. AAPL is likely to pass them later on this year.
Apple Newton was AFAIK, one of their first PDAs on the market in the early 90s. It's not much of a stretch to say that a smartphone is essentially an internet-enabled PDA that can also make calls. While the Newton failed, the iPhone was eventually a big success due to technology advances allowing for a smaller footprint and appealing design aesthetic.
From where I'm sitting, it seems like Steve Jobs is getting credit for Steve Balmer's profound and pervasive ineptness.
....but Steve Jobs has passed on.
Those that follow, are exactly that, followers. Neither Apple nor Microsoft has anybody capable of the vision thing.
My money is on the Next Big Thing coming out of the Maker movement.
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NTT had them in Japan.
Apple did make smartphones a mas consumer device, added more functionality, and made them easier to use than the others.
And there is their marketing - well, Jobs' - genius.
Jobs made the smartphones sleek, stylish and into a fashion statement and luxury product. Apple's market share is dwarfed by Android's, but Apple's profitability makes the Android people look like peasants.
I disagreed about apple being jewelry alone. Microsoft made products that people grumblingly put up with - so they could get the job done and be more productive.
Apple made products that people finally liked to use, and could use it easily enough, and fairly intuitively. When you create a great user experience like this, especially with a very low learning curve, people will adopt and use it in extraordinary ways. Once they feel good about using your products, they will feel special, like it was their private special thing. They will then become your biggest marketing team.
If anything, the industrial design aspect of Apple's products and even high price were side effects. The first was a nice to have, the second not so nice to have. But it didn't change a damn thing. It was always about the core user experience.. And how even most of the third party apps gave you the same sense of familiarity and consistency.
In a cynical way, this is like marketing a drug. You give the first few doses for free and make people realize how easy it is to use the drug and how shiny their world becomes when they use it regularly. Then step back and enjoy the fun. Apple gave people a tiny little pill yto swallow and even gave them little travel packs. Microsoft made people goto the doctor and get the drug injected up their backsides.
Both companies started in the world of garage built computers. They entered a field dominated by well funded business partners like IBM and DEC and showed that "toys" affordable to ordinary mortals could be fun and useful. Now Apple and Microsoft are today's IBM and DEC, and twenty years from now there will probably be new players in their place.
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Apples customers pay more so they make more money. Desktops with Windows still dominate the market.
But do Apple customers pay more in the long run? It's still the case that Macs tend to just "work", no weird crashes due to bad drivers, Windows has come a long way in reliability, but I know in my office, the desktop support calls from Windows outnumber those for Mac, and we have about 5 times more mac desktops than windows desktops. By controlling the hardware and the software, Apple can provide the customers with a smoother experience, at the expense of flexibility - you can't build your own mac, or add new hardware to it... which is fine for almost all consumers.
But Microsoft is a software company which are plagued by piracy - non paying customers.
If Microsoft could get every Windows user to pay a license cost as low as the OS X cost - their revenue would overcome Apple:s revenue with ease.
Since it's nearly impossible to buy a PC without Windows installed (or at least a license to run windows), it's hard to believe that piracy is affecting operating system sales, at least in the USA. I know that China has a high piracy rate, but those users probably aren't going to buy a Windows license anyway. I know I have license keys for WinXP, Win7, and Win8 that are completely unused because the computer I wanted wasn't available without a Windows license (well in one case it *was* available unbundled, but the computer was cheaper *with* the license.
Microsoft still has a lock on the corporate desktop, that's where they have the most to fear from Apple since the consumers that use and love apple hardware at home want to use that same hardware at the office.
If you sum up the Microsoft sphere. Microsoft, Spotify, Netflix, Adobe etc and you will find them a lot larger. Include all "partner" companies and Microsoft becomes quite large compared to Apple.
How is Adobe part of the "Microsoft Sphere" when the likely sell more photoshop licenses for Mac than Windows? Likewise, why is Netflix on the Microsoft side when their product is cross platform?
The younger and dumber Jobs bet the company on new shiny tech, forfeiting entire lines like the apple II in the process. The MacOS pre-quicktime also offered the most consistent user experience ever. If you wanted to do digital audio reliably, the ancient design of MacOS beat the much touted preemptive multitasking, memory protected Win systems.
Result: Apple on constant brink of collapse, saved by Microsoft who bought Apple stock so they could say We are not a monopoly.
The older Jobs, butthurt after being ousted by Apple, returns as a control freak, cranks out colored macs with no expansion options, the ipod (a portable storage unit who could not work as portable storage, an item with a standard connection that needed custom and single platform software to work), the Iphone (they saw nokia put a pc in a phone with the nokia 770, and so they put the equivalent of a locked down console in a phone, BRILLIANT), treats users as dumbasses (you're holding it wrong).
Result? Microsoft dethroned, AND History rewritten so that Jobs is synonimous with genius.
Who is "the prince of this world" again? QED.
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