Microsoft: The "Bootleg Apple" Strategy and Why It Will Fail
The Bootleg Beatles
I think it was about 6 years ago that I went to “A Lark in the Park” in Hyde Park in London – a show that was an extension of the “Last Night of the Proms” via a huge screen, but also included a live performance in the park by none other than the Bootleg Beatles. The Bootleg Beatles, perhaps the best known of all tribute groups, provide a passable impersonation of the Beatles and their music. One of them looks like John, one looks like Paul, one looks like George and, let’s face it, nobody looks like Ringo. Their live performance sounds very close to the original Beatles sound and they are genuinely entertaining. They don’t come even close to the real thing, but that surprises nobody.
Blue Screens and Viruses
In the past decade Apple’s competitive strategy against Microsoft has been to remove the obstacles to using Apple computers. Apple did not go on an out-and-out orgy of innovation that humbled the PC and convinced people that they really should switch vendors. This is what happened:
- After the acquisition of NeXT, Apple improved the NeXT OS (OS X) incorporating many of the features of the old Apple OS (Mac OS) and then switched the two. Mac OS was then gradually phased and OS X was gradually improved. OS X is really a GUI layer sitting on Free BSD Unix, with the Mach kernel underneath. Unix with the Mach kernel provides a very stable foundation for an OS.
- Microsoft never saw the Apple Mac as a threat until a few years ago, even though Windows users were becoming dissatisfied. That’s because the main Windows problems were (and to some extent still are) defined by the words: Blue Screens and Viruses. They were fixable.
- Microsoft had many competitive advantages over the Mac: The Mac was niche, many computer users had never even seen a Mac, the Mac was relatively expensive, it didn’t use the x86 chip, a good deal of important applications didn’t run on the Mac, the Mac required you to learn a new user interface, very few people used Macs at work and that wasn’t about to change. Microsoft simply continued with its “drag along” monopoly strategy, dragging its users behind it.
- In early 2001 Apple opened its first two Apple stores. Microsoft never took much notice. Many commentators declared it an initiative that was doomed to fail. But Apple understood that many people didn’t buy Macs because they never got to touch them or play with them. As Apple stores proliferated, Mac sales rose.
- In late 2001, Apple’s iPod was released. As time past this unassuming device shifted the goalposts, but Microsoft never recognized the danger. Apple set up iTunes to sell music for the iPod and Microsoft still didn’t see it as competition. In time iTunes became the fastest growing software product on the PC. Millions of PC users were now running an Apple application. iPod user began to buy Macs
- Apples OS incrementally improved with each release. Soon people were comparing the iMac “look and feel” favorably to the Windows look and feel. And this coincided with the time that Microsoft allowed the Longhorn project slip for years. These were lost years for Microsoft.
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Wow, this is quite an analysis. It definitely points out the difficulties associated with a lack of innovation, as in “Why should we innovate? We have a much larger market share!”
On the last point about the Microsoft store, though, I have to differ. My first thought on hearing about this was, “What in the world are they going to sell? Zunes? Mice? Other people’s computers?”
But I also think that opening stores in such a down economy where online selling is so much more effective is also an opportunity to innovate. I have no idea what shape that innovation might take but opening up retail stores is an opportunity to wipe the slate clean and try something really different.
True, your litany of anti-innovation is sobering and suggests that Microsoft just doesn’t “get it.” But I wouldn’t count them out of the game just yet. There area lot of creative people out there and they just might find the right mix. And, frankly, I would like them to succeed through innovation; we’ll all benefit from that.
While your conclusions are solid, many of your talking points are simply more Mac-centric myth-making. For anyone who’s seen both sides of these issues, they weaken your argument rather than strengthening it.
For example, Microsoft’s Surface initiative is genuinely innovative, and owes roughly zilch to the iPhone. It’s a very different technology, and a very different application. Comparisons are pointless and misleading.
Your assertion that “iPod users began to buy Macs” is baseless. Windows has continued to dominate even in the iPod era, and your suggestion merely detracts from Apple’s real achievement in forging a new market category (albeit one truly opened up by the likes of Creative Labs and others) and making its own software near-ubiquitous on Windows.
Most wildly incorrect is your assertion regarding Blue Screens. This type of crash ceased to be an issue with the release of Windows NT, way back in the mid-1990s, at a time when Apple was still running a far more primitive, far more crash-prone OS. With the near-universal adoption of Windows XP, protected-mode operation became the rule in the PC world; most Windows users haven’t seen a BSD crash in this century. Again, Microsoft was WAY ahead of Apple on this one.
On the other hand, yes, Vista is a total disaster, and you are clearly quite right in noting that Microsoft has now totally abandoned innovation in exchange for a fruitless strategy of chasing Apple. Idiotic, to be sure… but only a symptom of Microsoft’s deeper ills. The main problem is that Microsoft has lost its original vision of relentless technical advancement, and become mired in bean-counting marketing initiatives.
For now, this means gains for Apple. But Apple is far from immune to this form of corporate dementia. When (not if) Apple loses Steve Jobs, you’ll see it go exactly the same route. So all these partisan Mac-vs-Windows arguments are really losing their relevance in a hurry. In the five-to-ten-year term, we’ve all got to start looking to free and open-source alternatives, or face a steadily deteriorating computing environment.
Apple continues to make great products that appeal to a wide range of ages.
The one thing that people failed to see is that Apple is set up differently from all other technology companies. It is a powerful software house and a very innovative and sexy hardware company and every phases of it’s product cycle are controlled in house, thus producing an extremely well integrated product that is a pleasure to use. Microsoft and Google are software giants, Dells and all the hardware makers are dependent upon the other two for their OSes. The end result is that everybody is competing amongst themselves in offering the cheapest hardware in order to achieve great market share. Apple is not so pressured and can afford to roll out boxes that are well designed, at a price which does not threaten it’s margin. It is a business model to kill for but out of reach to the other technology companies.
I think we’d all like Microsoft to do something truly innovative – whether they do it through an app store or real stores or something completely unexpected. When life got desperate for IBM in the early 1990s they managed to pull a few rabbits out of the hat, so maybe Microsoft can do the same. Maybe they need to be in trouble to provoke that. It remains to be seen.
I’m in agreement about Microsoft innovation. They can do it and now they really need to and if they pull out the stops nearly everyone will be pleased by it. It’s very difficult to hate an innovator no matter what your grievance.
Microsoft’s Surface is, I agree, not an imitation of the iPhone, just an example of Microsoft failing to get to market first with the touch interface. However they now have such an interface on Windows Mobile. My assertion that iPod users began to buy Macs was known as the “Halo Effect” on Wall St. The financial analysts didn’t seem to think it was an illusion, as you seem to think. They invented the term to describe the uptick in Mac sales that accompanied the growth of iPod sales, because there was a correlation.
As a Windows user up to 2005, I managed to get BSODs on XP pretty much all the time. Admittedly the blue screen didn’t show up directly, Microsoft having realized that having the computer just hang was “better marketing.” However technically it was exactly the same – dead PC. You could pretty much ensure a dead PC, if you just ran more than 3 or 4 applications. Memory leaks would gradually fell your PC after a while. Friends of mine still using Windows also see this same behavior on Windows, which seems to have avoided you. I only run Windows XP under VMware occasionally and only to run the browser. With a single application running it’s very stable.
As for Apple and corporate dementia, I agree entirely. The whole Sculley episode looked like corporate dementia to me and without iron fist of Steve Jobs in control, there’s no telling what will happen in the longer term. I’m inclined to believe that if Apple goes into decline then Google will move into the market with Android, but it’s too early to speculate on that.