Both Apple and Microsoft are trying to get into new markets by buying existing companies.
Microsoft is now trying to find a way to connect its dominance inside the corporate world with the world of cellphones.
The problem is that Microsoft is a gigantic bureaucracy and there is no way to protect and guide an innovative start-up.
The best exception to this rule has been the Google purchase of YouTube. Google got YouTube at an early stage and had the right degree of innovative spirit at top management for YouTube to survive and currently to thrive.
Apple sees rapidly growing fields and wants to buy its way in. It is looking at Time Warner and other media companies so it can have a backlog of shows. It is also interested in Netflix in order to go directly into the new market of new media directly to the home.
Apple and Microsoft both have serious problems that will keep them from entering the dynamic new markets.
Apple believes in ‘proprietary’. It wants to own everything that connects to its product. An absolutely losing strategy as I have explained a dozen times. Apple is so blindly following this strategy that it has no idea why the iPhone was such a success. iPhone used an open app market which made it great. People use their phones for apps not just as old fashioned phones. The app market was everyone else… not Apple proprietary.
Microsoft had a brilliant strategy. Sell to businesses that are technically bound by their employees and whistle-blowers to pay user fees. Give the rest away free or cheap. They also tried to bundle their own little programs into their big programs. Microsoft is never an innovator, it always copies everyone else. So the bundle and copy approach works ‘alright’.
The trouble is, the market exploded outside their domain. The smartphone world grew outside the corporation and people brought their phones to work and self integrated them. Now the smartphone is the small portable computer for everyone, running on Android, and Microsoft is out in the cold.
Apple hasn’t a real chance in the new media world. Few companies do. One can sell old inventory for many years, which gave book publishers some market value.
The media world now has two channels. Channel one is the modern genius exemplified by ‘Breaking Bad’. Breaking Bad set a new standard which everyone else tries to achieve but rarely can. Like literature, a Lolita or a Harry Potter are hard to find. Visual media is equally hard. The bar is high and the chance of getting over it is low.
The second channel is international multi-country appeal. The American racism that insists on putting blacks in everything American means the global market is rapidly disappearing. Many cultures dislike black, especially Chinese.
Both Apple and Microsoft are giant bureaucracies. I don’t expect success unless it is pure luck like the App store for Apple. Google still seems to have a way around its gigantic size. Netflix and Amazon are still in growing and expanding markets.
Other tech giants have problems. IBM, HP are dying like Motorola, Nokia and Xerox.