timcook

Talking about Apple’s new Mac lineup yesterday, CEO Tim Cook had this to say about the unnamed “competition.”

“They’re confused,” Cook said, showing the slide above to represent Apple’s view of the competition’s direction. “They chased after netbooks. Now they’re trying to make PCs into tablets and tablets into PCs. Who knows what they will do next? Well, I can’t answer that question. But what I can tell you is we have a very clear direction, and a very ambitious goal. We still believe deeply in this category, and we’re not slowing down on our innovation.”

Later, Apple announced that it would be offering the latest version of OS X for free, and also giving away its iWork and iLife apps with the purchase of new Macs.

Those might seem like bold words and moves from a company with single-digit market share in traditional notebook and desktop computers. But increasingly it’s becoming outdated to think of “computers” in that way. The market is converging, blurring the lines between smartphones, tablets, notebooks and desktops, and creating a competitive free-for-all.

This new world was captured in these projections from Gartner this week, showing operating system shipments encompassing everything from smartphones to desktops.

The trend in combined iOS/Mac OS market share — fueled by the iPad — helps to explain why Cook is feeling his oats.

But the rapid growth in Android also shows that this new world is much more complex than the old Mac vs. PC battle. Google is also a major force here. And it’s not just Android. Last week, after Google beat Wall Street’s financial expectations, CEO Larry Page touted the fact that Chromebooks “are growing fast and defying the more general decline in laptops.”

HPChromebook11_StackedThis new era is fascinating in part because of the different business strategies from each company. Apple makes its money on hardware. Google makes its money on advertising.

And then there’s Amazon, with its strategy of selling devices at cost in hopes of making money on content.

“It’s very early days in the tablet arena,” said Amazon CEO Jeff Bezos in a recent interview about the new Kindle Fire HDX. “If it’s horses running, we haven’t even come around the first bend. It’s early.”

Microsoft CEO Steve Ballmer has his own way of looking at the competitive landscape. Apple is about being “fashionable,” Amazon is about being “cheap,” Google is about “knowing more,” but Microsoft is about “doing more,” he said during Microsoft’s recent company meeting, according to a Reuters report.

In his subsequent annual letter to shareholders, Ballmer said the company’s plan is to make money by “leading with devices and enterprise services.”

Which company’s approach will prevail? We’ll have lots of fun debating that, and watching what happens, but the latest developments leave little doubt that the market for “computers” has already changed radically.

Here’s another chart, also based on Gartner’s latest data, that sums things up.

 

Comments

  • Joanie Mann

    devices are driving content delivery systems – which includes applications. given that there still isn’t a clear path to “enabling” legacy apps and with no single clear winner in any app category, it’s no wonder that the market continues to look for solutions to a problem that hasn’t been fully defined yet.

    coopermann.com

  • Tony McNicholas

    Ten years ago the four horsemen were Sun, Oracle, Microsoft and Cisco. The only constant we’ve had is Moore’s law which keeps shifting the ground from under us. What happens if we see another 32 fold increase in the next ten years. How disruptive is that ? What happens to the competitive advantage of managing bespoke cluster farms in 20 years time if you have a 1024 fold increase. You could put your whole farm on a chip. What happens then ?

    • Guest

      EMC, not MS.

      • Tony McNicholas

        oops, also that should have been 16 and and 256 fold increases, 32 seemed high, but since the dot com boom we moved on 32 fold.

  • Guest

    I thought Cook’s competitive comments were embarrassingly actually. And Apple didn’t think it was confusing to use a desktop OS as the base for iPhone back in 2007, or later iPad. Indeed Jobs highlighted all the reasons that made sense. But now they say the opposite and the media amplifies the spin.

    If you had to call the race today, the long term winners look to be Google and Amazon. But history shows that predicting tomorrow’s winners in tech is a fool’s game.

  • fitz35

    It wasn’t too long ago Android was just starting out and barely had any market share. People were saying there was no way they could compete with BlackBerry and Apple who were dominating the smartphone market. That just shows no one knows where we will be a few years from now.

    • isitjustme

      Android is free and come in all price points and made by many manufacturers and yes many are forked too to leave out google.

      Yes android is winning but who is making the hard cash?

      Only Samsung.

      Apple have to thanks all the iHaters to keep them on their toes and without their discouragement I doubt Apple will do anything else to disrupt the market.

  • asdf

    Microsoft isn’t exactly going anywhere anytime soon, I mean that in a good way. I remember over a decade ago when people claimed Microsoft was dying due to the poor reception of Windows ME and Gates stepping down as CEO. Then out came the Xbox and Windows XP and Microsoft was again praised. Microsoft has always gone through phases, but always seems to come back out of nowhere and remind the world why they’re a tech behemoth.

    I will say Google is on a path that I admire, it’s a company basically being run by transhumanists. If Microsoft wasn’t tied so much to my life as a PC enthusiast and video gamer, I wouldn’t care if they lived or died, but I need Windows to continue to evolve and prove itself reliable and worth developing on as a platform, because I love PC gaming and I love my Xbox as well.

    Microsoft has stakes in more areas of the market than any other company, they kind of do everything right now and that’s their core strength. Other companies tend to do one or two things exceptionally well, Microsoft tends to do a bit of everything at “good” levels, but not great levels. Google is a search giant that made a mobile OS…that’s really about it. They have no hardcore loyal community like Microsoft does with desktops and servers, they also have no legacy software like Microsoft does.

    If you think about it, Google is constantly at risk of imploding on itself just as quickly as it came to power. Google is doing well IN THE NOW, but they have no support structure behind them, they’re still kind of flying by the seam of their pants. If something comes along that is just flat out better than Android, Google will quickly be kicked out of the mobile market. But show me ANYONE who could ever kick Microsoft out of the desktop/server/enterprise market? Microsoft will never lose those markets because of their legacy in them.

    So, in short, Google needs to maintain constant vigilance in search and mobile, but Microsoft is expanding to those while knowing its other markets are totally safe.

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