What good is a lead over competitors in the rapidly changing personal technology industry? Ask Microsoft. The Windows and Office maker jumped out to an early lead in PCs back in the 1980s, and cemented the lead while crushing former foe Apple in the 1990s.
Microsoft built an insurmountable lead over all comers, Apple and IBM included (remember OS/2?). Since then, Microsoft has struggled mightily to repeat the performance, failing and flailing badly in search, advertising, games, portable music players, and smart phones, but riding along profitably on a rich endowment from the cash cows, Windows and Office.
What about Apple? Apple’s penalty for losing the OS and PC wars to Microsoft and PC manufacturers was to become the most adored and profitable PC line in the world. Unlike Microsoft, Apple did not rest on past laurels and continued to blaze new trails in portable media players, online media sales, the smart phone, and personal tablets.
I watched a video of analyst Bryan Ma from IDC in which he discussed smart phones and tablets. Ma says Apple’s lead in tablets is insurmountable.
Nothing is insurmountable, but I understand the sentiment.
Apple is clearly the most profitable among all technology companies that have ventured into media players, media sales, smart phones, and tablets. Apple may not go for complete unit market share domination, as did Microsoft back in the day, but Apple recognizes the value in profit and revenue market share. Apple’s efforts are essentially starving most competitors, including Google, Motorola, Microsoft, RIM/Blackberry, Nokia, and nearly everyone else except the feisty and delusional bit copier, Samsung.
The real question is, “Can Apple keep the lead?”
That’s easier said, than done, but Apple continues to do one thing that competitors do not do well at all. Apple creates an emotional bond between customers and company, and customer and product. That bond is not easily or quickly broken by competition.
To overcome Apple’s so-called insurmountable lead, a competitor will need to match all that Apple does at a lower price point. Who can do that? Who does that? Or, a competitor must provide great value and a better user experience at the same price point? Who can do that? Who does that?
My answer? For now, nobody. Insurmountable is a cliche, of course, and an absolute (plenty of danger there, right?) which often are not absolutes at all. If a company is to defeat Apple or overcome Apple’s profitable lead in smart phones and tablets, who will it be and how will they do it?