One of the lessons we are seeing play out between the iPad and every other tablet on the market is that you bring to the battle the weapons that you have. I can’t imagine a fight where one army takes the field and the opposing general walks out and says, “Hey guys, we aren’t ready yet, we’ll be back in a year or so with better weapons and kick your butts then, I promise!” Oh wait, I can think of two and involving France and Microsoft (we’ll get to that shortly). I have seen battles where armies have been more focused on cost than execution, and that’s how a bunch of savages beat the crap out of the British Army and how Google is beating itself. You would think that folks with titles would know you can’t starve an army or call a time out, yet against the iPad Microsoft seems to be doing the latter, and Google the former, while Apple is laughing all the way to the bank.
Microsoft vs. Apple
When Apple announced the iPad, it declared war on the PC. Actually that isn’t entirely accurate, it initially declared war on the PC with the Mac vs. PC commercials several years back. However the iPad brought the battle to Microsoft in a sustainable fashion, because it almost immediately took 5-percent market share and cost Microsoft’s CEO half of his bonus. In any book, that is a decisive victory, and if we were talking a real war, the side attacked either mobilizes the army or gets its butt kicked. Microsoft basically said, “Oh crap, we’d better start building a response and in a couple of years we’ll have one with Windows 8!”
This was kind of what happened when Mozilla challenged Internet Explorer 6 with Firefox. In the meantime, Microsoft went from around 90-percent market share to around 50-percent market share, depending on metric.
The closest thing in war I can think of (someone else may have a better example) was the Maginot Line in the Second World War. The French tried to build an impenetrable line of forts, but the line was worthless in its incomplete state. It seemed as if the French thought the Germans would wait for them to finish, they didn’t, and Germany marched around the incomplete line of forts and took France. Rather than being omnipotent, the forts were worthless.
Now, recall that when Steve Jobs took over Apple, Apple’s products weren’t competitive, and the firm was almost bankrupt. Steve had been public about the Apple products at the time being crap prior to his return. He could have pulled everything from market or done nothing until he was able to get the hardware moved over to Intel years later, or OS X out the door. The outcome would have been no more Apple. Instead he marketed the hell out of what he did have. He found advantages in each offering, and while the company continued to struggle, it didn’t go under, and provided a foundation for the iPod which returned the company to profitability and success. In short, Jobs fought with the weapons he had, and that was enough to save the company. When he did get better weapons, he kicked some ass. But it does you no good to have better weapons if you’ve already lost.
Microsoft could finish and field Origami on tablets more quickly, or scale Windows Phone 7 up like Google initially did with Android to provide an interim alternative, and then market the result on advantages like full Flash support, better security, and better compatibility with more traditional applications. But, by not doing this, the battle may be over before Microsoft can field its alternative, as the iPad is now being integrated as standard in consumer electronics.
Now let’s look at Google.
Google vs. Apple
The news this week is that Motorola is thinking of building an OS and abandoning Android. Several other vendors are considering similar moves, and HP was the first to act on this problem when it bought Palm to avoid Android.
Those of us in the analyst community have been hearing an increasing number of complaints from those that build Android devices, and those that provide technology for them. The complaints come down to Google being unpredictable, unavailable, unresponsive, with the biggest complaint being that the related efforts aren’t profitable for anyone but Google. Even the application developers, with one exception, are saying they are losing money with Google, but not with Apple. Google’s soon to be ex-CEO Eric Schmidt seemed incredibly pleased that his Android group was profitable, but given this information, this is false profit. Google appears to be starving Android into obsolescence.
My favorite war story that exemplifies this problem is when the British Army, the best-equipped and most powerful army for the time, took on the Zulu nation in 1879 (they even made a decent movie of this battle). It seems that they were concerned about costs, and so they put in place controls that required forms to be filled out to get ammunition, then packaged that ammunition in tins similar to those that were used for sardines in order to keep the gunpowder dry. To open the cans, you needed a special key, and then you had to unwind the air-tight container slowly, or the key would break off and you couldn’t open the container.
Now imagine thousands of British soldiers being attacked by tens of thousands of pissed-off, screaming natives with spears, having to fill out forms to get ammunition, which then had to be opened by the single key the battalion pursers had, slowly and carefully. The British force was wiped out, and you’d likely not be surprised to find the pursers were found to have been generally shot by their own people, and a lot of broken containers.
Steve Jobs is known to be frugal, and he is a true pain to negotiate with, but Apple outspends the industry on marketing, and he not only goes after the best people, he makes sure they have the resources they need to get the job done. Frugal is not cheap, and Apple launches for critical products are well-staged, the audiences are stacked, products well-seeded, and the seeding programs well supported. When Apple underfunds, as they did with Apple TV, you see a sharp difference, and the product doesn’t do as well.
If Android loses, it won’t be because of Apple, it will be because Google starved it to death, Apple will just be the biggest beneficiary.
Wrapping Up
The two lessons here are that when in a fight, you fight with the weapons you have. There is no “time out” while you get ready, and you make sure your troops are adequately equipped. We are watching this play out between Microsoft, Google and Apple – Apple learned these lessons, and Microsoft and Google appear to be learning them in the most expensive way possible; through experience.
Excuse me for saying this entire article reeks of card stacking manipulation who's only purpose can be to push some form of social agenda. I say this because once again we have a writer using the "percentages to promote a lie" methodology.
There is a complete lack of saying "A percentage of what?". The iPad took 5% of what? A market the group the article is using as the subject had little to no presence in? Shouldn't that more be 100%? What market is that percentage even in comparison to? Overall computers? Handhelds? Are you counting phones in that, a market M$ has barely had a foothold in to begin with?
… and immediately in the next paragraph it's lather rinse, repeat with the "oh IE has gone from 90% to 50%" idiocy. WHY do I call it idiocy? Because during the timeframe where IE went from it's 2005's 90% to todays 50%, the number of Internet users has grown from 800 million to roughly 2 billion… 90% of 800 million is 720 million. 50% of 2 billion is 1 million. So while they've "lost" 40% market share they've GAINED 280 million users. That means Microsoft hasn't lost a blasted thing, and you're using percentages to lie.
That's one of the hardest concepts to grasp about "share" and why it's used to perpetuate these types of outright lies. It is entirely possible in a still expanding market to lose share and STILL HAVE GROWTH!!! That's why serious businessmen know "share" is often meaningless.
There are SO many questions you have to ask when these types of percentages are listed. How many people are being counted twice? It's like counting Droid users — I've got a droid tablet, a Symbian Phone running Opera mobile, Opera on my home desktop and Firefox at work — how often am I counted. Does my using Chrome on droid mean I'm not using Opera? Take a buddy of mine with his iPhone, but still uses IE8 on the desktop… How is he figured into this?
ALWAYS ask "a percentage of what?" — and if the pool size has changed, the groups sampled are different, or if unrelated items are for some reason lumped together, every conclusion the source is trying to push is called into question.
Basically people, don't allow percentages be used to LIE TO YOU!
oops, should say 1 billion, not 1 million there :D
Google's committed to ads, not apps. Android is only important as part of the zone of oblivion around Google that it firebombs with freebees, so that no real competion or growth can happen. So yes it starves hardware vendors, developers, and ultimately customers. It's aim is confusion, not solutions, anywhere outside it's area of influence and control–advertizing.
I suspect google made android simply to put ball bearings under Microsoft – deny ms the opportunity for license revenue for a mobile os.
I often wonder how much revenue Google is making from Android even in the form of ad clicks. Analysts seem to keep touting how Android is beating the pants off of Apple's iOS. You'd think as financial analysts whose interests should be tied to making money that Android must be making an awful lot of money for Google. To me, Android looks like a terrible business model. It doesn't seem to be making smartphone vendors rich, it doesn't seem to be making developers rich and it doesn't seem to be making carriers rich. It does seem to be making smartphone owners happy, though, through lowered costs, software features and varied hardware. To me, Android seems to be like some sort of charity organization since I don't hear about Google making lots of money from it.
I'd like to see more smartphone vendors abandon Android only to find out how long Android can sustain itself without high growth rates. It will be interesting to see how tablet vendors will fare using Honeycomb and without carrier subsidies.
It seems like no one is making money on Android. Are you sure google is making money on Android? How exactly?
Google is making alot of money from android via forcing alot of click-through ad revenue
by the way, Apple sort of blew it with the launch of the iPad 2, if they could build 10 million units in the first month, they would have sold every single one of them, while Xoom has trouble selling 200,000… the tab could only manage about this many too…. while their "shipped" number are still sitting on store shelves.
so while usually Apple does have the products well staged, with the iPad 2, they could have done far far more,
Agree with you. Apple could have done A LOT better with the iPad 2 launch. Apple TV is still a failure though in my book.
But they can't build iPad 2s as quickly as you want them to build them. Factories don't work like that. If just one component can't be made as fast as the rest, it slows down the whole assembly process. I don't think consumers will abandon buying iPads if they have to wait a bit longer. So many people are claiming that Apple is messing up or they didn't plan properly. How about if most consumers just ordered their iPad 2s over the internet and just waited for them to be delivered in due time? Then they wouldn't be complaining about how Apple made them wait on line unnecessarily. The impatient consumers are causing the problems, not Apple.
No one will die if they don't get an iPad 2 in the first month. Honestly. If you saw the recent London Regent Store iPad 2 waiting line, you'd have to realize that it isn't something normal or something Apple could anticipate for any product launch. I'm sorry, but I think armchair critics are being a bit too harsh to fully understand the logistics of the iPad 2 launch. 18 different iPad 2 versions and having to know which one's to stock the most. Please.
i have to take issue with your comment that Apple spends more on Marketing… this is false, especially with MSFT, and with Android manufacturers.
for instance there is not a single iPad 2 commercial that is being run, yet Apple can not build them fast enough, every 15 minutes there is a Xoom commercial, yet it's sales are miserable…
the same with the iPhone, yes, there are commercials here, but there are a dozen other Manufactures with a ton of marketing each, yet each individual big Manufacture, (save a chinese company pumping out Android clones for like $50, and NO MARKETING) have not been able to sell even a fraction of the units of iPhones… and again, Apple announced last quarter that they still could not build the iPhone fast enough for demand from new sources of distribution.
"i have to take issue with your comment that Apple spends more on Marketing… this is false, especially with MSFT, and with Android manufacturers. "
I can't remember seeing a single Zune ad on TV print or radio, but I see Apple advertisements everywhere. Same with Windows 7. So I do think Rob has some validity there.