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  • The Fear Factor: Apple Versus Microsoft

    March 2nd, 2007

    Can you imagine the world's largest, mightiest software company being afraid? It doesn't seem to make a whole lot of sense, and if you said it was utterly illogical, I'd understand. But when you're number one in any industry, you can't believe it'll last forever, because it probably won't.

    Think of the millionaire who believes that a fortune, earned or otherwise, will soon vanish, and thus socks the money away rather than enjoy the largess. Of course, that's not uncommon, particularly for folks for whom riches came at a relatively early age.

    So indeed it's very possible that Microsoft truly believes that its dominant status is temporary and may disappear eventually. I suppose it's true in a greater sense. After all, IBM was once thought of as invincible, and certainly the original AT&T once ruled the telephone roost. Well, in that case, maybe AT&T, whose empire is being reassembled before our eyes, believes they'll do so again, although Verizon might have other ideas.

    In any case, despite its tiny share of the PC market, Apple must be giving Microsoft fits. Consider what happened in the music player arena, where Microsoft's every effort to gain some traction was doomed to failure. Well, Microsoft doesn't admit failure, so perhaps they will sell a million Zunes before the first half of the year, just as they promised. Remember the Zune?

    Certainly, Microsoft isn't finding things too simple out there these days. Take search. As Google continues to grow the market, and Yahoo manages to hold its own, Microsoft's rebranded Windows Live search site is losing out. Maybe they shouldn't have stopped calling it MSN Search. Did that make any sense to you?

    I mean, if what if Google decided to call itself Gargle or whatever all of a sudden? Is Windows Live supposed to be sexier than MSN Search -- or is it all the result of Microsoft's compulsion to stick the word "Windows" everywhere, as if that is supposed to mean something that will resonate with people.

    Well, I suppose it does resonate if you love malware and obtuse user interfaces?

    The real question here is whether Microsoft truly understands why it isn't loved, and why its frequent promises about new products and features aren't taken quite as seriously as they used to be.

    I mean, when you look at Microsoft's history of failed promises, products that never appeared or which were not quite as represented, you have to wonder how they succeeded. This isn't to say that they don't make anything good. After all, Office for the Mac is pretty decent as sprawling software suites go. In addition, they make pretty good keyboards, although the colors are rather drab.

    The Xbox is also a fine gaming machine, if you're in to such things. And it's quite true that Windows does get the job done. After all, it's on more than 90% of the PC desktops on the planet, and most businesses have managed to live long and prosper regardless.

    At the same time, Windows Vista, although a decent operating system overall despite its bloat and feature excesses, hasn't conquered the world quite as Microsoft hoped. There are published reports that Mac sales were up 100% in January, a month where computer sales usually go in the other direction.

    The iPod is also doing quite well, and the anticipated demand for the iPhone may be a lot higher than some of the naysayers suggest.

    So what's next? A Zune phone? And will anyone truly care? Maybe Bill Gates had the right idea about concentrating on his philanthropy and letting others worry about Microsoft's daily operations. More power to him.



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    10 Responses to “The Fear Factor: Apple Versus Microsoft”

    1. tundraboy says:

      A little off tangent, but your mentioning the name change from MSN Search to Windows Live reminded me of the most incredibly stupid product rebranding ever done in the US. That was when Datsun cars in the US became Nissans. So overnight a car line that had great recognition and a hallowed history (remember the 240-Z?) behind it just disappeared. Nissan sales in the US fell precipitously after the name change and it took years, billions of dollars, and a corporate takeover before it recovered.

    2. Dave says:

      I think Macs continue to have a reputation for being expensive with very few software titles, and 90% of the corporate world uses MS, so most people will blindly follow along thinking that MS PCs must be the best. It does appear that maybe the tide is slowly turning. I even have a cousin whom I finally convinced to make the switch last year!

    3. Tom B says:

      "So what’s next? A Zune phone?" I got it-- a Zune that operates your VCR!

    4. Andrew says:

      Most corporations use Windows because Windows was designed for corporate use, runs on computers in enough different shapes and sizes for corporate use, and finally because most business are not willing to repurchase their software for the privilege of replacing a tool that does get the job done with another tool that while perhaps better, requires a 100% replacement of everything they currently have.

      Oh yeah, while OS X is a better system at the individual system level, Windows has some real advantages in terms of large networks of users. Its not sexy or cool to the user at the machine, but to the massive corporation it is essential.

    5. Michael T. says:

      "Most corporations use Windows because Windows was designed for corporate use"

      Actually, corporations are afraid of change - IBM gave PC's away with mainframe purchases. Those PC's ran DOS. Windows originally ran on top of DOS. Hence most corporations have used Windows since the early 90's. It wasn't necessarily because it was "designed" for it (well NT was, but came a little later). Regardless of the OS, if there is a market for an application or a feature, then it will be produced by someone.

      But on topic... As far as I'm concerned, Microsoft has never been great at creating anything. They make mediocre products that basically work good enough. When they're forced compete on a level playing field, they usually have a rough go of it. Their only saving grace is the boat load of cash from Windows and Office they can dip into to subsidize the other products. Vista will go on to take the largest chunk of the OS market in several years, which is par for the course. However, if Apple were to release OS X for non-Apple hardware, then Microsoft will really have something to worry about. I'd like to think that Leopard will the first step in making that happen, but given that Apple likes to keeps all things tightly integrated, it's doubtful it'll happen anytime in the near future. (Especially since they can boast about having the only computers in the world that can run the 3 most popular operating systems available; Windows XP, OS X, Linux.)

    6. But on topic: As far as I'm concerned, Microsoft has never been great at creating anything. They make mediocre products that basically work good enough. When they're forced compete on a level playing field, they usually have a rough go of it. Their only saving grace is the boat load of cash from Windows and Office they can dip into to subsidize the other products. Vista will go on to take the largest chunk of the OS market in several years, which is par for the course. However, if Apple were to release OS X for non-Apple hardware, then Microsoft will really have something to worry about. I'd like to think that Leopard will the first step in making that happen, but given that Apple likes to keeps all things tightly integrated, it's doubtful it'll happen anytime in the near future. (Especially since they can boast about having the only computers in the world that can run the 3 most popular operating systems available; Windows XP, OS X, Linux.)

      The argument about Apple licensing or opening up Mac OS X doesn't fly. Apple tried that sort of thing over a decade ago and it nearly killed the company. They make the majority of their money on hardware sales, folks. By keeping control over the software, and not licensing it into the wild, they are able to provide better compatibility. Indeed, one problem Microsoft faces is that it's near impossible to keep Windows compatible with thousands and thousands of possible hardware combos. That it does an adequate job is probably all you can expect.

      Peace,
      Gene

    7. mikey says:

      The argument about Apple licensing or opening up Mac OS X doesn't fly. Apple tried that sort of thing over a decade ago and it nearly killed the company.

      Actually, your argument does not fly. Apple's attempt to lisence its hardware came to late. Such that the economy of scale for that approach worked against them. They sold so little at the time and made things worse by competing against those they lisenced the OS / hardware to. So, you are right in that just becuase if Apple was to 'open their hardware / OS combo' it would be a sure thing. That is not the case.

      There is basically an economic threshold or economy of scale at work here. If Apple was to increase it's market share enough beyond a threshhold then it could survive as a company lisensing its OS / Hardware etc... I mean comon Windows does this and is succesful. So, there is no magic preventing Apple from doing the same as long as they adjust there 'economy of scale' situation.

    8. Actually, your argument does not fly. Apple's attempt to lisence its hardware came to late. Such that the economy of scale for that approach worked against them. They sold so little at the time and made things worse by competing against those they lisenced the OS / hardware to. So, you are right in that just becuase if Apple was to "open their hardware / OS combo" it would be a sure thing. That is not the case.

      There is basically an economic threshold or economy of scale at work here. If Apple was to increase it's market share enough beyond a threshhold then it could survive as a company lisensing its OS / Hardware etc… I mean comon Windows does this and is succesful. So, there is no magic preventing Apple from doing the same as long as they adjust there ‘economy of scale’ situation.

      Actually, it still wouldn't fly unless Apple could sell ten times more product than it does now, and even then it would create the same support nightmares you see on Windows now.

      Peace,
      Gene

    9. This may seem like a bad dream come true, but Microsoft said something about a Zune phone last year. But all is quiet on the Zune front right now, although it wasn't terribly noisy last year.

      Peace,
      Gene

    10. Ah, yes, the Datsun. I suppose they wanted to make everything conform to the actual corporate name worldwide, if my memory is accurate on that change. But Nissan has had lots of ups and downs through the years, and I don't think a name change represents the worst of all possible adversities. However, the newest Infinti "M" and "G" models do credit to any auto maker, not just Nissan.

      If you can afford them, of course :)

      Peace,
      Gene

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