Apple is now doing so well that it has to explain to the American government why it’s so handily beating its opponents, while Microsoft is now so embarrassed at being surpassed in market cap that it has to explain to its shareholders what it plans to do to right the ship. But while the answer to how Apple managed to grow larger than Microsoft is fairly straightforward, it’s not the answer that immediately comes to mind: sure, Apple’s diversification into everything from music players to cellphones to music sales to tablets has given the company a wider revenue base upon which to capitalize. But Microsoft has also moved into every one of these markets and failed each time, so it’s not as simple as the fact that Apple has broadened its product line. Why is it that the iPod worked and the Zune didn’t? Is it because the iPod came first and cornered the market before the Zune got out the door? If so, then how does one explain the dominance of the iPhone over Windows Mobile phones, when the latter have been around longer? And how about the iPad? Microsoft has wanted to go there for what seems like a decade, and then newcomer Apple steps in and steals the whole market?
Microsoft’s original strategy in the eighties and the nineties, and a highly successful one at that, was to cater to the technology geeks who made the buying decisions on behalf of the non-geek majority. That meant making sure its products were suitable to the corporate IT geeks who not only directly influenced the buying decisions for their companies, but also indirectly influenced the home purchases of their non-geek coworkers who invariably turned to them for advice. And it meant catering to geek technology pundits, upon whom regular non-geek folks also relied upon for buying advice. And man did it ever work when it came to getting people to adopt not only Windows, which was a geek’s warped vision of what a consumer might want in an operating system, but also Office, which represented such a warped vision that it took the concept of typing words on a screen and hitting the print button, what should have been the simplest (and least expensive) task in all of computing, and instead turned word processing into something that cost hundreds of dollars and involved having nineteen toolbars on the screen. And yet the strategy worked so well that it even had non-geek regular people paying for PowerPoint slide show presentation software for their home computer, which they could not possibly ever have a home use for.
When Steve Jobs came back to Apple, he knew that he was never going to be able to change the geeks’ minds. So instead his strategy was to try to change the game by getting the non-geek majority to stop paying attention to the geeks altogether – and that strategy has taken a long, long time to pay off. Looking back over the years you can see the early incremental stages of it, whether it be something as subtle as offering all in one computers in a choice of colours to get consumers chewing on the possibility that buying a computer might be their decision to make and not that of the local resident geek aka me!, and releasing a portable music player in the iPod whose interface was so drop dead simple that even the most technology averse among the population couldn’t come up with a reason to be intimidated by it.
As consumers have grown to trust Apple to offer products that are actually aimed at them instead of the geeks, the company has grown progressively bolder in its moves by offering products like the iPhone, a smartphone which, while still being straightforward in its functionality, offered a far more sophisticated array of features. And because the public trusted that the product would be geared toward them instead of being geared toward the computer store salesmen of the world, they bought in.
Meanwhile Microsoft has continued to offer up one geek’s warped vision of a consumer product after another. While the Zune was a similar product to the iPod, the difference between the two was akin to someone who could speak the language vs. someone who was only capable of making gibberish noises which sort of sounded like the language; consumers saw the Zune for the faux-consumer product that it was and stayed away. The same goes for every new failed cellphone that Microsoft has launched in the hopes of staving off the mobile marketshare it’s been losing to the iPhone over the past three years. Ironically, Microsoft’s problem is that because the vast majority of consumers are current or former Windows users, they know first hand just how unsuitable Microsoft’s products are for consumers – and even if they’re still using Windows it’s only because they think they have to, and they’re not about to expand their reliance on Microsoft products one inch more than they absolutely must.
So now that a new sequel in the Apple vs. Microsoft saga is about to begin playing out after the current plotline ended with Apple catching up to Microsoft and becoming an equal sized company, there’s every reason to believe that the current trend will continue to play out in the next chapter of the two companies’ decades-long battle. For Microsoft to regain momentum it would have to suddenly gain an understanding of what consumers actually want and figure out how to speak that language, but that’s just not part of Microsoft’s DNA and never has been. They’d need a new outside CEO, for starters, but the problem is that there’s only ever been one CEO in the history of consumer technology who’s understood how to give consumers what they want and had the guts to do so at the expense of riling up the geeks, and he’s already running Apple. It’s no coincidence that the one and only market in which Microsoft is seeing growth is that of hard core gaming with its Xbox, one of the few consumer technology markets that’s still dominated by geeks, for the simple reason that most gamers are geeks.
While Microsoft is now left to its own devices to come up with a strategy for getting consumers enthusiastic about its offerings, the company surprisingly no longer has any momentum left on its side at all. Even the geeks have given up the Microsoft ghost – and no, the geeks haven’t turned to Apple, which they largely view as the devil for making technology “too easy” and taking all their power away; no, the geeks have turned to Google, whose unofficial mission statement now consists of trying to turn back the hands of time back to that era in which the geeks were calling all the shots. And while it’s incredibly unlikely that Google will be able to pull that off, at least the company has a strategy. Microsoft, on the other hand? The company recently announced that it’s now going to focus on products – which begs the question of just what it is that they’ve been focusing on for the past three decades.
In hindsight, while a quick surmising of the two companies’ histories will leave you scratching your head as to how Apple could now possibly be a larger company than Microsoft, a closer inspection is likely to leave one wondering how it is that it took Steve Jobs thirteen entire years to pull off, considering the competition. The real question now is whether Apple continues to keep its foot on the consumer-oriented gas pedal now that it’s won this stage of the battle.