Who’s competing with whom?

In Sunday’s Lafayette Journal & Courier, the USA Today section included an article by Matt Krantz comparing Microsoft and Apple. He treats the two companies as arch rivals, comparing them to the Cola War participants and to the longstanding animosity between fans of Ford and Chevy pickups. And he wasn’t wrong 20 years ago, but he is now. The OS wars are, if not entirely over, at least in a state of permanent cease-fire. Microsoft has very clearly won in volume; Apple turns a handsome profit. With the move toward a browser-based world, the OS on desktops and laptops is becoming increasingly irrelevant to mainstream consumers.

Indeed, the desktop and laptop are becoming less relevant (though not irrelevant, despite the slower sales in recent years). Over half of Apple’s Q3 2014 revenue came from iPhone sales. Macs (and the attendant Mac OS X) were a mere 15% of revenue. Apple could completely abandon the PC market tomorrow and still be fine. They’re clearly in the mobile device (and services) business today. Sure, Microsoft has a mobile offering. I’ve used a recent Windows Phone and it was pretty nice. But Microsoft is competing with Apple in the mobile space the same way that Apple is competing with Microsoft in the desktop OS space. As a hint, it’s the same way that this blog competes with Ars Technica.

If Apple is a mobile company, then who are they competing with? The obvious answer is Google. While Google doesn’t really do devices, they control the Android ecosystem (although the degree of control is debatable). Steve Jobs was willing to declare “thermonuclear war” on Android. I’m not aware of him harboring a similar hatred for the Windows Mobile devices that existed many years before.

I mentioned this on Twitter, and Krantz argued that Google is an ad company, whereas Apple and Microsoft are “technology companies”. The distinction is lost on me. Technology is such a broad term that it is effectively meaningless. And while Google may derive most of its revenue from advertising, it’s only capable of generating that revenue because of the technology it produces and acquires.

There’s just not much meaningful competition between Apple and Microsoft these days. Both of these companies compete with Google, but in different spaces. The recently-announced partnership between Apple and IBM may bring Apple back into competition with Microsoft, but that remains to be seen.

So what are the lessons here? First: just because a guy has a money column in USA Today, that doesn’t mean he understands the technology (overly-broad term used intentionally) industry. Second: just because you were once bitter rivals with a company (or a person), you may not stay that way forever. Third: it is very important to be aware of who is in the space you want to be in so you can do it better than they do.


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