This is just too easy. In barely five short years, Apple has clobbered their way into the leadership position of two very important market segments. Smart phones and tablets.
Apple’s offensive has left the landscape littered with the corpses of former industry leaders. Nokia. Motorola. HTC. RIM. Microsoft. Google’s offensive against Apple’s iPhone was a desperate move to stop the rise of apps.
Apps? Yes, that’s how search is conducted on the iPhone and iPad. Google may rule search on the desktop or in notebooks, but not where it counts in the future– mobile devices. Apps are king.
What to do?
Google spent billions of dollars and launched a cheaper, less sophisticated smart phone in Android OS and gave it away free to mobile device makers. There, that’ll show Apple, right? Wrong.
As it turns out, Android users don’t use many apps, don’t browse the web much, and still don’t use Google much for search. Hence, not much in the way of advertising dollars come to Google from mobile device users.
Even worse, Android became the poster child for orphaned mobile operating systems because the smart phone makers have no incentive to upgrade users to the latest and greatest. It’s called fragmentation and it’s killing Google’s efforts to make money on mobile devices.
What to do?
Google bought Motorola to compete against Apple’s iPhone and growing ecosystem. How do you suppose Google’s smart phone partners feel about that? Google is now competing against Samsung, HTC, and friends.
What about poor old Microsoft? First, they were caught flatfooted by Apple’s iPhone and it took years to get a new Windows Phone version out the door. Even then, it was still pretty much 2007-like, while Apple has moved on and launched the wildly successful iPad. Despite the smart phone’s promise, and a deal whereby the Windows maker paid Nokia to use Windows Phone, sales languished.
What to do?
Like Google, Microsoft was willing to stab their hardware partners in the back and launch their own tablet devices to compete with Apple and Google, or risk falling farther behind in the mobile device wars.
Microsoft was forced into such drastic action, as was Google, because their hardware partners couldn’t catch up to Apple’s growing mobile device dominance and risked losing the future, which nearly everyone says is mobile, not desktop.
That leaves Microsoft and Google hardware partners out in the cold with the stench of death everywhere around. Dell can’t figure out how to make money. HP wants out of the PC business. They’ve already tried and failed at smart phones and tablets and probably hate Microsoft even more. What else can they do except stuff Windows into a cheap box and hope for the best.
Google’s smart phone and tablet partners probably have similar emotions. They can’t make any money selling smart phones or tablets, even with a free Android OS stuffed inside. Where else can they go? Nowhere. Like Microsoft’s Windows PC partners, they’re stuck between the proverbial rock and a hard space.
To be fair, Microsoft and Google probably didn’t want to kill their hardware partners, but calculated they could get away with it by building their own hardware where their partners had failed.
Look for Microsoft to buy Nokia. Look for more fragmentation of Android OS (similar to Amazon’s Kindle Fire) as hardware makers decide to go it alone, devoid of Microsoft or Google. And, look for both to become more desperate to gain market share in the hopes it eventually translates into profit. So far, it hasn’t.