Microsoft can't beat Apple (it's not because they can't)

Of course Microsoft can beat Apple – but not the direction it’s going: consumer electronics and entertainment. And it’s simple – Microsoft has a process model that does not permit the type of innovation that would allow it to compete in the consumer space.   To figure that out, you don’t have to look any further than the lack luster sales of Vista. 

Meaning – Vista has a big WOW factor (at least that’s what the marketing says), but consumers don’t see it that way or see the value. So – that’s the rub – while it might be worthwhile for Corporations (at some-point) to adopt Vista, Microsoft has not addressed a core need for the consumer. 

Now, there might be bigger forces and trends here – like migration away from desktop computing, but I don’t think so.  Microsoft has a very vested interest in maintaining control over the desktop computing environment and that’s where they focus their energy – incremental improvements with planned obsolescence for products. And when your consumer is locked into your product, that means a cash cow.  Protect the cash cow = lack of real innovation.

In Apple’s case, they have a process model based on design. No necessarily innovation, although that does fit in.  That means that they see the consumer as essentially design friendly and target their products that way. However, from an innovation standpoint they don’t really take the prize – the’re rarely first to market too (iTunes is no exception). That said, since I believe they have rightly identified the consumer as design friendly, and their model focuses on design, they’re in good shape.  I do think they will hit the cash cow syndrome (and you can start to see that with the iPods of late – not including the iPhone).

But what about an innovation model?  That one is tough since consumers are a fickle bunch in general. However, if the innovation is really good, and the design is really good, then you might have a winner (even if there is not necessarily an apparnet market need). 

The challenge with an innovation process focus is in not getting the cash cow syndrome. And that takes guts to be willing to throw out what you have to do something better.  And I don’t think Microsoft is willing or able to do that. 

Posted on February 13, 2007 in Competition, Market

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