In The World of Finance it was big news when Apple (AAPL) surpassed Microsoft's (MSFT) market cap. It then took me back to the late 90's and early turn of the century when the proverbial user-end competition would argue The Mac is better than the PC. Of course both companies have taken advantage of this controversial argument in their marketing campaigns with the personification of both systems using human actors representing each system. Not many would argue against these marketing campaigns due to the user-community's mirroring attitude and perception; truthfully, comparing these companies is really comparing apples to oranges (pun intended).
There are many that would agree historically that the strongest argument Microsoft (PC) enthusiast could bring is that Microsoft controlled 97% of the user-end Operating System market leaving the rest to Apple and an assortment of others (i.e. multiple flavors of UNIX and Linux). While this sounds impressive, we must take into consideration first and foremost that Microsoft's business model primarily is licensing. Microsoft's manufacturing costs for the Windows operating systems are primarily software developer costs and all associated cost within the Software development Life-Cycle (SDLC). Apparently Microsoft has continued efforts to compete with other products in the array of electronic devices from the consumer stream including Video Game Consoles (Xbox) and portable media players (Zune); however, these are not the cash cow products of Microsoft as is the Windows operating systems. The manufacturing of the PC was left up to IBM, Dell, HP, Gateway, Compaq etc. while Microsoft was able to kickback and count units from manufactures and enjoy licensing profits as a major player in every PC manufactures supply chain.
Meanwhile, where was Apple? Apple's model was manufacturing hardware parallel to the development of its operating systems. At the time, great numbers of data processing enthusiasts would argue that this was a costly-mistake given that Apple did not take the same licensing business model of Microsoft. Now it's a new day, the world can take a new look at Apple given the news of the organization surpassing Big Bad Bill Gates and the Goliath Microsoft. In retrospect, Apple apparently was not in the business of developing the world's greatest operating system; they obviously had the goal of building the world's greatest computer. In the context of Apple, the hardware and the operating system were two-halves-of-a-whole to be developed and designed under one roof. Apple would maintain its attitude in regard to its products from genesis to present day.
Not long after Windows 95 began the World Domination campaign for Microsoft, the MP3 codec was born. Napster became the best friend of the MP3 "file sharing" junkie given the MP3's quality-to-file-size ratio, a new phenomenon was catching on. It's difficult to disagree that the PC soon became this oversized stereo system that would only allow music portability from burning your MP3 downloads to a CD and off you go to the car or with your portable CD player.
Going back in time it is obvious that the solution to this was to build a tiny battery-operated PC that could hold thousands of these tiny high quality files and allow users to take music along without the time consuming effort of creating a CD or being limited to what your CD would allow for you to burn. Voila! The iPod was born. Why was Apple the perfect business model to develop such a product? Unlike Microsoft, Apple was not multi-tasking its enterprise, Apple was continuing its mission to build the world's greatest computer. For this device to revolutionize the world it had to emerge from an organization that understood what it would take to develop a stable, reliable, user-friendly, and swanky device from A to Z. With all due respect, the Macintosh was the iPod in its prehistoric form (I know it's a stretch but stay with me here). Like its predecessor the Macintosh, Apple built the iPod as a sleek device with a small operating system parallel to the hardware development of the device which as said before is the ancient recipe for Apple's success. While Apple's products are not cheap or inexpensive, this recipe of success renders quality products of which is Apple's reputation, and the costs of these products have reflected this discipline. Judging from the theme of this article this approach has paid off: On May 26, 2000, Apple was trading at $21.59 per share; as of May 28, 2010, Apple is trading at $256.88 a share. This growth has occurred all while staying steady on course with an obvious mantra: build excellent computers.
The exciting aspect of the iPod is that it was the beginning of a new era in computing. The iPod has embarked Apple on a journey which took them from the simple iPod, then bridging the iPod technology with network connectivity in the iPhone. Although Microsoft is not foreign to the cell phone market, their involvement with the cell phone mirrors their relationship to the PC, license the operating system. Similar to the PC model the hardware on Windows cell phones are not native to the Microsoft Operating system, thus mixed results with the deployment of these devices on various cell phone manufacturer's products typically result. Apple's iPhone from top-to-bottom Apple hardware built parallel to the Apple operating system and the consumers of this product would agree: quality, quality, and quality.
Then came April 3, 2010: the historical date for the debut of the Apple iPad. Is it a notebook, a laptop, or a tablet? I am not certain, but what one can be certain of is it's an iPad. Some critics have remarked it is an overgrown iPhone. It has the touch screen, its battery powered, has network connectivity, can run most common applications and is light-weight and thin. When first experiencing the use of an iPad I got a retro nostalgic feeling from this modern device, it reminded me of the old Star Trek movies depicting the technology of our future. Bones walking around with this one tablet that could handle all of his communication, informational and documentation needs.
Since the release of Windows95 the world has been marveled and awed by Microsoft's dominance and the wealth that Bill Gates has amassed. Not that the Bill Gate's story is not a great one, it is definitely worth admiration. However, Steve Jobs and Apple is an extremely inspirational one, as the Apple organization has been a minority in not being distracted by Microsoft's fortune (with the Exception of Microsoft bailing out Apple in 1997 with a $150 million cash infusion-some would say the generous move was a public relations campaign to divert the thoughts of Microsoft's anti-trust practices). Apple accepted the opportunity and put its head down, kept the nose to the grindstone in building a legacy of superior products and never looked back.
Basically, we can progress our inappropriate argument beyond which is better (Mac or PC), in their natural existence the two empires are both in the technology sector; however, Apple is in hardware while Microsoft is primarily in the software sector. Microsoft, due to its marketing position with name brand PC manufacturers, is still the dominant presence of operating systems in desktop computers. This is irrelevant in large part because Apple goes beyond the operating system, Apple is the complete product; a leading manufacturer of computers that have their own proprietary operating systems. This is not news to Bill Gates or Steve Jobs, they both understand where they are in their niche which is probably why it was a no brainer for Microsoft to help Apple back in Apple's troubled times of 1997.
My statement of non-comparison here is more than a point; it is a celebration of ingenuity and creativity not only in the area of technology but also in the area of business. Kudos to Apple for finally going above and beyond the GUI technology that both Apple and Microsoft borrowed from Xerox and bringing a reinvention of personal data processing that is an improved ergonomic fit into our new millennial culture from those desktop clunkers that kept us handcuffed to a desk or laptops that kept us close to an electrical power source. Yes, those were the orange days; now its time to move on to the Apple days.
No comments:
Post a Comment