Microsoft, Google, and Apple: Tech Wars

The story began in 1998, the year in which Microsoft first released its Windows98 system, Apple first introduced its iMac, and Google was founded by two Stanford students. Since then, along with the world-changing development of the internet and high technology, the three companies have entered into a series of battles, struggling for control over different digital areas. Though the mastery of light sabers is not required, the wars in the tech industry today are featuring equal intensity and uncertainty as those a long time ago in a galaxy far, far away, with technology and business strategy as their weapons.

The Phone Menace

                As smartphones change the way people find information, consume content and purchase apps, they have become the most coveted devices and the fastest growing market. In 2011, 487.7 million smartphones being sold, more than the number of PCs and tablets combined[1]. With distinguished operating system, the competition over market share can be divided among iPhone, Android and Windows phone, becoming the battle front of the three companies. Simple and consistent since 2007, iPhone’s seamless integration with other Apple devices in transferring data makes it easy for customers to understand. The abundance of iPhone apps market also provides users with more choices. Microsoft, on the other hand, is catching up with its advantage of owning both the smartphone operating system and the dominant PC operating system. Meanwhile for Google, its Android system has found its strength as an open-source operating system that any manufacturer can use, dominating smart phone market share.

Attacks of the Patent Owners

While busy with innovation, the companies are also at each other’s throat over intellectual property protection. According to a Stanford University analysis, $20 billion has been spent on patent litigation and patent purchases in the past two years, with Apple and Google spending more on patent lawsuits and purchases than on research and development of new products last year[2]. Because patents on software often grant ownership of concepts, vague algorithms or business methods, some patents are so broad that they allow for ownership of unrelated products to be claimed. Supporters of the suits usually consider them another strategy to defeat and profit from their competitors, at least keeping them from winning.

Revenge of the Old Friend

Though collaboration is common among tech companies, such business relationships usually prove to be fickle and tumultuous. When the iPhone was launched, Google integrated their map data and default search option as parts of the iPhone experience. This success in the bidding war with Microsoft for being the default iPhone search engine over Bing also helped Google to assert its dominance as revealed in a Senate Antitrust Hearing in 2011[3]. Between Apple and Google was a win-win relationship, however, when Google stepped into the mobile handset arena, the stakes changed. Apple’s former CEO Steve Jobs felt that Android was too similar to the iPhone, inciting him to declare that he would go to “thermonuclear war” with Google over it[4]. In the recent iOS6, Apple replaced Google Maps with their own Maps app, causing a lot of frustration to the users, as Apple’s replacement does not meet expectations. In addition, Apple’s new voice-activated personal assistant, Siri, poses another threat to exclude Google from Apple products, serving up answers to people on the go, allowing it to deliver query results directly to those asking for it[5]. While divorcing from Google, Apple contributed the lion’s share ($2.6 billion) to the consortium comprised of Microsoft, Apple, Ericsson, EMC, Sony and RIM, for purchasing about 6,000 patents from the bankrupt Nortel, once a strategic partner of Microsoft. This Apple-Microsoft collaboration was called anti-competitive by Google[6].

A New Hope

                Last fall, Apple launched iPhone 5 with its iOS6 system, and later the iPad Mini, new iPad4, and new desktops and laptops. In October, Microsoft launched Windows 8, its next-generation desktop platform and a departure from its legacy platforms, and new Surface tablet computer. Three days later, it launched Windows Phone 8, aiming at aligning its desktop and mobile platforms.  Later in November, Google also released its new Android 4.2, Jelly Bean, after the unveiling of its Nexus 7 tablet in October. The tech industry’s biggest players have shown off their newest software and hardware, all aiming to make big moves before the end of the year. Each company has invested in a new hope for its new products in the new year, hoping to win the battle in the next round.

Global Strategy Strikes back

While most analysis is based predominantly in the U.S., strategies in the global market do make a big difference. Though only the third in smartphone race with iPhones and Android, Windows Phone inherits Microsoft’s success in global coverage – its App Marketplace covers over 90% of the world’s population, higher than the other two. Though Google’s Play Store is available in 138 countries and 70% of the world’s population, Microsoft is available in only 115 countries yet 90% of world’s population[7]. This is because Microsoft’s marketplace is available in China while Google’s is not. If Google could have support for China, they would edge past Apple and get closer to Microsoft’s potential population reach. Apple also showed its increasing emphasis on global strategy, as CEO Tim Cook said he expects China to overtake the U.S. as Apple’s biggest market in two weeks ago[8].

Return of the Monopoly?

The word monopoly has been thrown around a lot recently. Microsoft, Apple, and Google – all have been called in that way by media or by each other during lawsuits. However, this term has been used more as an exaggeration of the company’s dominant position in one area than a strict economic characterization. Particularly, in recent situations, intense competition has led to the absence of a real monopoly. As Google owns Internet search, Microsoft owns operating systems and applications, and Apple owns high-end hardware and entertainment and media devices, each company has its own advantage. In 2012 we’ve seen significant developments begin to unfold from Microsoft, Google and Apple, and 2013 will be another pivotal year for all the major tech companies, with make-or-break decisions to be made by all. Will there be a return of the monopoly? That depends on whether the Force is strong with these companies’ future moves.

 


[1] http://www.dailyfinance.com/2012/07/28/smartphone-battle-apple-vs-google-vs-microsoft/

[2] http://www.nytimes.com/2012/10/08/technology/patent-wars-among-tech-giants-can-stifle-competition.html?pagewanted=all&_r=0

[3] http://thenextweb.com/apple/2011/11/06/how-apple-will-use-siri-maps-and-microsoft-to-divorce-itself-from-google/

[4] http://thenextweb.com/apple/2011/11/06/how-apple-will-use-siri-maps-and-microsoft-to-divorce-itself-from-google/

[5] http://www.economist.com/news/21567361-google-apple-facebook-and-amazon-are-each-others-throats-all-sorts-ways-another-game

[6] http://www.zdnet.com/blog/microsoft/google-calls-microsoft-apple-collaboration-on-nortel-patents-anti-competitive/10271

[7] http://www.macstories.net/stories/mapping-the-entertainment-ecosystems-of-apple-microsoft-google-amazon/

[8] http://www.3news.co.nz/China-to-become-Apples-biggest-market—CEO/tabid/421/articleID/282911/Default.aspx

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