Apple and Microsoft in dead heat
Katie bar the door! A fresh headline from the venerable New York Times captures an important moment — “New King of Technology: Apple Overtakes Microsoft”
Don’t get too excited, we’re dealing in Monopoly money here as the article makes clear:
“In intraday trading in the afternoon session, Apple shares rose 1.8 percent, which gave the company a value of $227.1 billion. Shares of Microsoft declined about 1 percent, giving the company a market capitalization of $226.3 billion.”
Still, the only company worth more in the known universe is Exxon Mobile valued by the market at $282 billion.
So, that’s a lot of money and a significant coup for a company (Apple) that once nearly bought the farm until Microsoft gave it life support in the form of a loan. Still the crossing is significant.
In recent years, Apple could do almost no wrong with product introductions like the iPod and recently the iPad and more importantly, the retailization of technology. I own Apple TV which is not a hit that I can tell though it is a very nice product. The glitch that I can see is that Apple TV doesn’t have a lower case “i” in front of it so blame product marketing.
I don’t know what you think but it seems like Microsoft hasn’t done much right since Gates went into philanthropy. The company isn’t exactly an idea or product generator like Apple and the products they do bring out seem inept. Many people bought Apple products in reaction to product quality issues with Windows. And while Apple went for hands-on selling in its stores, Microsoft left it all to the big partners that pride themselves on how efficient they are at specking out a system and mailing it to you. Where Apple updates your software automagically, Windows users have to find a web site and figure out what to get (full truth, my last experience with Windows was XP and I bought a bushel of macs rather than chance Vista).
But the two companies are not simply mirror images. Apple makes no software save its wonderful OS and some funky utilities and an office suite, and Microsoft makes very few hardware products. Perhaps software is inherently more difficult? Maybe. But, importantly, in a world where you’d think all the hardware niches are full, Apple manages to find and exploit new ones. In the same world where you’d think the sky is still the limit in software, Microsoft finds it necessary to push the same rock up a hill by periodically re-writing its OS and we get headlines about security breaches.
We could look at the parity in market value as a good thing, as Apple catching up, but we also have to say that Microsoft slowed down. Why?
Apple Software, Inc.
When Apple changed its name by dropping the “Computer” word we all thought that the reason was the phenomenal success it has had in consumer electronics. Sure, the company kicks booty with its computers thanks to great design and a stable operating system, but the success of the iPod seemed to point the company in a new direction.
Apple’s success has been three fold — near flawless manufacturing, customer service and software. More than anything it has been the software that seems to make you almost forget there’s a device involved as some of those who played with the iPad yesterday seemed to indicate.
Yes, Apple unveiled its long rumored slate computer, the iPad, yesterday but what I saw was release three or four of the software that runs the modern iPod and iPhone. Apple’s success comes from being able to repurpose and add on to a core piece of software that runs its consumer devices.
For example, start with the iPod Touch and you have, an iPod with applications and a nice user interface. If you add a camera for stills and video plus phone capability you get the iPhone. That was a nice trick but not so revolutionary as it was evolutionary — at least from that angle. But now take the iPod software and put it on a bigger device and then plug that device into your HD TV — in the presence of a high speed wireless network — and that device is called Apple TV. In that vein, yesterday’s iPad announcement is really not much more than iPod in a different form factor and with some tweaks to the software including more applications.
Ok, now there are some significant differences in look, feel, purpose — what is iPad’s purpose? — and the applications that run on each gizmo but the fundamental software appears to be common to all these devices. And it needs to be said that all of these devices also have in common the ability to connect with the mother ship (not you, Apple!) to download content for a price.
One of yesterday’s announced uses of the iPad will be for downloading and reading newspapers, starting with the New York Times, and books. In fact a whole new (?) store format for book content will feed the iPad, but let’s face it, that sounds like a repurposing and modification of iTunes.
Now, I am not complaining about any of this. Downloading digital content — especially the kind that you read and that has heavy-duty information — has been a missing factor in our digital lives and I, for one, am glad to see this evolution. If iPad can help to save the newspaper industry, I am all for it. But I am most impressed with the vision and the execution on that vision. Apple built sophisticated software for iTunes and the iPod and then contemplated the number of ways they could leverage it to invent not only a number of useful devices, but also categories. That’s genius, if you ask me.
Perhaps the next game we all play on the web will be asking and answering the question, What will Apple do next with its software? I think it’s worth pondering.
