WEEK 3 (c)-APPLE, GOOGLE, AND MICROSOFT BATTLE FOR YOUR INTERNET EXPERIENCE

APPLE, GOOGLE, AND MICROSOFT BATTLE FOR YOUR INTERNET EXPERIENCE

INTRODUCTION

APPLE

Apple Inc. is an American multinational corporation headquartered in Cupertino, California, that designs, develops, and sells consumer electronics, computer software, and personal computers. Its best-known hardware products are the Mac line of computers, the iPod media player, the iPhone smartphone, and the iPad tablet computer. Its consumer software includes the OS X and iOS operating systems, the iTunes media browser, the Safari web browser, and the iLife and iWork creativity and productivity suites.

Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne on April 1, 1976, to develop and sell personal computers. It was incorporated as Apple Computer, Inc. on January 3, 1977, and was renamed as Apple Inc. on January 9, 2007, to reflect its shifted focus towards consumer electronics.

Apple is the world's second-largest information technology company by revenue after Samsung Electronics and the world's third-largest mobile phone maker after Samsung and Nokia. Fortune magazine named Apple the most admired company in the United States in 2008, and in the world from 2008 to 2012. On September 30, 2013, Apple surpassed Coca-Cola to become the world's most valuable brand in the Omnicom Group's "Best Global Brands" report. However, the company has received criticism for its contractors' labor practices, as well as for its own environmental and business practices.

As of May 2013, Apple maintains 408 retail stores in fourteen countries, as well as the online Apple Store and iTunes Store, the latter of which is the world's largest music retailer. Apple is the largest publicly traded corporation in the world by market capitalization, with an estimated market capitalization of $446 billion by January, 2014. As of September 29, 2012, the company had 72,800 permanent full-time employees and 3,300 temporary full-time employees worldwide. Its worldwide annual revenue in 2013 totalled $170 billion. As of Q1 2014, Apple's five-year growth average is 39% for top line growth and 45% for bottom line growth. In May 2013, Apple entered the top ten of the Fortune 500 list of companies for the first time, rising 11 places above its 2012 ranking to take the sixth position.

GOOGLE

Google is an American multinational corporation specializing in Internet-related services and products. These include online advertising technologies, search, cloud computing, and software. Most of its profits are derived from AdWords.

Google was founded by Larry Page and Sergey Brin while they were Ph.D. students at Stanford University. Together they own about 14 percent of its shares but control 56 of the stockholder voting power through super voting stock. They incorporated Google as a privately held company on September 4, 1998. An initial public offering followed on August 19, 2004. Its mission statement from the outset was "to organize the world's information and make it universally accessible and useful", and its unofficial slogan was "Don't be evil". In 2006 Google moved to headquarters in Mountain View, California, nicknamed the Googleplex.

Rapid growth since incorporation has triggered a chain of products, acquisitions and partnerships beyond Google's core search engine. It offers online productivity software including email (Gmail), an office suite (Google Drive), and social networking (Google+). Desktop products include applications for web browsing, organizing and editing photos, and instant messaging. The company leads the development of the Android mobile operating system and the browser-only Chrome OS for a netbook known as a Chromebook. Google has moved increasingly into communications hardware: it partners with major electronics manufacturers in production of its high-end Nexus devices and acquired Motorola Mobility in May 2012. In 2012, a fiber-optic infrastructure was installed in Kansas City to facilitate a Google Fiber broadband service.

The corporation has been estimated to run more than one million servers in data centers around the world (as of 2007) and to process over one billion search requests and about 24 petabytes of user-generated data each day (as of 2009). In December 2013 Alexa listed google.com as the most visited website in the world. Numerous Google sites in other languages figure in the top one hundred, as do several other Google-owned sites such as YouTube and Blogger. Its market dominance has led to prominent media coverage, including criticism of the company over issues such as copyright, censorship, and privacy.

MICROSOFT

Microsoft Corporation is an American multinational corporation headquartered in Redmond, Washington, that develops, manufactures, licenses, supports and sells computer software, consumer electronics and personal computers and services. Its best known software products are the Microsoft Windows line of operating systems, Microsoft Office office suite, and Internet Explorer web browser. Its flagship hardware products are Xbox game console and the Microsoft Surface series of tablets. It is the world's largest software maker measured by revenues. It is also one of the world's most valuable companies.

Microsoft was founded by Bill Gates and Paul Allen on April 4, 1975 to develop and sell BASIC interpreters for Altair 8800. It rose to dominate the personal computer operating system market with MS-DOS in the mid-1980s, followed by the Microsoft Windows. The company's 1986 initial public offering, and subsequent rise in its share price, created an estimated three billionaires and 12,000 millionaires from Microsoft employees. Since the 1990s, it has increasingly diversified from the operating system market and has made a number of corporate acquisitions. In May 2011, Microsoft acquired Skype Technologies for $8.5 billion in its largest acquisition to date.

As of 2013, Microsoft is market dominant in both the IBM PC-compatible operating system and office software suite markets (the latter with Microsoft Office). The company also produces a wide range of other software for desktops and servers, and is active in areas including Internet search (with Bing), the video game industry (with the Xbox, Xbox 360 and Xbox One consoles), the digital services market (through MSN), and mobile phones (via the Windows Phone OS). In June 2012, Microsoft entered the personal computer production market for the first time, with the launch of the Microsoft Surface, a line of tablet computers.

With the acquisition of Nokia's devices and services division to form Microsoft Mobile Oy, the company will re-enter the smart-phone hardware market, after its previous attempt, Microsoft Kin, which resulted from their acquisition of Danger Inc.

Microsoft Corporation is a software company based in Redmond, Washington. Microsoft's flagship product, the Windows operating system, is the single most popular operating system for home desktop use. Its other desktop products, namely Microsoft Office, Internet Explorer, and Windows Media Player, are either bundled directly with the Windows operating system, or are often sold together with Windows as pre-installed software on new computer systems. Additionally, the company manufactures and sells computer hardware such as keyboards and mice, and owns or possesses interest in several content-distribution channels such as MSNBC, the MSN Internet portal, and the Microsoft Encarta electronic encyclopedia.

The Microsoft Windows operating system started life as an optional addition to the MS-DOS operating system. The idea of a graphical user interface was pioneered by Apple Computer's Apple II and Macintosh. However, due to prior work with IBM, Microsoft successfully convinced the hardware giant to ship Microsoft Windows pre-installed on IBM personal computers. This monumental step had piggybacked Windows to be one of the most recognized software titles in history. The Microsoft Office suite of applications (Word, Excel, Powerpoint, and Access) began life as Microsoft Works, an Apple Macintosh application that provided the functions of a word processor, spreadsheet, and database all in one. Microsoft's popular Internet Explorer web browser was originally a rebranded version of Spyglass Mosaic.

Microsoft products have traditionally been plagued with security problems, leading to an entire malicious software industry today. Although all major operating systems and computer programs have been subject to attack at one time or another, Microsoft's latency at resolving issues, and the simple number of them, has tarnished the company's image. Microsoft has a policy of releasing patches to its software on the second Tuesday of every month via Microsoft Update, with no more than 10 major changes to its products at those times. Thus, exploits that are discovered around mid-month are not corrected for at least four weeks, and in many cases eight or twelve weeks can go by before a patch is released for a security issue. Microsoft Corporation has promised that its new Windows Vista operating system will be more secure than previous offerings such as Windows XP, however the ten patches a month policy has not been changed.

PROBLEM STATEMENT

•  What is the comparison of the business models and the areas of strength of Apple, Google, and Microsoft.
•  Why is mobile computing so important to these three firms? Evaluate the mobile platform offerings of each firm.
• What is the significance of mobile applications, app stores, and closed versus open app standards to the success or failure of mobile computing.
•  Which company and business model do you think will prevail in this epic struggle? Explain your answer.
• What difference would it make to a business or to an individual consumer if Apple, Google, or Microsoft dominated the Internet experience? Explain your answer.

SUGGESTION & ACTION

Question 1

Compare the business models and areas of strength of Apple, Google, and Microsoft.

Answer

Apple:  It has the basis of creating a very strong hardware base for the internet future and thus logically they play their role in this battle by laying emphasis on the hardware that facilitates mobile computing. Apple has gone into the stance that applications, one of the major earners for tablet and phone manufacturers, should be device restricted. For example, one application should be unique to the brand of the device and should be allowed to function in another device from another separate brand. They even stopped Google in its plans to allow Google applications to work on Apple products. Thus by doing this Apple is trying to capitalize on their loyal customer base and create a Apple weds Apple scenario. Its business model focuses on centralized control of almost all aspects of its hardware and software. It believes smart-phones and tablets should have proprietary standards and be tightly controlled. It only allows apps from its App store that have been vetted by the company, to be loaded to its products. Apple has a very loyal user base that has steadily grown and most likely will stay with Apple products in the future.

Google: Google is the believer in the concept that in the future the devices used to run the applications and other internet options should be a fraction of what they are being charged now and instead the revenues generated should be from the in-app advertisements. Google even bought AdMob, an application advertisements development company, to work on such a concept. This future, Google and Microsoft have tried their hand at going hardware friendly but they still do not put the same emphasis on the hardware as Apple. Its business model has always focused on the Internet and the Web. It began as one of many search engines. It quickly ran away from the pack with its copyrighted Page-Rank search algorithm which returns superior search results for Web users. It also has developed extensive online advertising services for businesses of all sizes. Google provides value to the user by using an inexpensive, flexible infrastructure to speed up Web searches and provide its users with a vast array of Web-based services and software tools.

Microsoft: Microsoft has laid its bet on the operating system on which the mobile computing devices shall run. Microsoft also has announced plans to develop the hardware for mobile computing, something it has not done so far, and thus has entered into the field of both Google and Apple. By integrating the hardware and software deal Microsoft has actually change the dynamics of the whole market. And this can be problem some for Google and Apple as they shall have to change their own perspective and outlook towards the level of competition that they shall have to face in the coming years in mobile computing. : Its business model originally focused on the desktop computer running the Windows operating system and Office desktop productivity applications. The company and its products are staples for businesses and consumers looking to improve their productivity with computer-based tasks. While it is trying to expand its presence on the Internet, it still must try to keep customers bound to the desktop computer.

Question 2

Why is mobile computing so important to these three firms? Evaluate the mobile platform offerings of each firm.

Answer

Mobile computing is basically doing the activities which involve internet without being fixed to a particular place. The importance of mobile computing for all the three mentioned firms which is Apple , Google and Microsoft as it is the future of the internet technology and for these firms to  flourish and expand they need to be very effective with mobile computing.

APPLE: 

The mobile platform that Apple provides with its products is “iOS” (Kevin K, 2012). This mobile platform is the closed platform that is it is applicable for apple products and only apple apps could work on this. Some of the remarkable features amongst them are:

• There is an option over which you can reply later on the calls which you can’t take immediately.

•  Integration with the facebook over which you can share all you iphone activities

•  There is a passbook app through which you can use you iphone as a credit card.

•  There is also an up-gradation of the apple maps app which is very impressive.

GOOGLE: 

The mobile platform that Google provides is “Android”. This mobile platform is a universal platform or you can say it’s an open platform when compared to the mobile platform offered by Apple. The latest version provided by the Android software is the version 4.1 “jelly bean” (Android, 2012). Some of the notable features of this version are:

•   A simple screen swipe would provide you with search results related to Google.

•   The voice recognition tool in this version would rub offline.

•    Another of the new feature is GOOGLE NOW in which the preferences are chosen based on the data like the time location and personal history and over this the search results are provided.

MICROSOFT

Microsoft is entering this market recently by launching the tablet named “Surface tablet”. The mobile platform that Microsoft is offering is the Windows Phone 8 (Kevin K, 2012). This operating system will be compatible with the laptops and the desktops.

Some of the unique features of this operating system are:

•          Support dual core chips

•          Support multiple screen resolution

•          Provides advanced map technology

•          Offers Passbook wallet.

  

Question 3

What is the significance of mobile application, app stores, and closed versus open app standards to the success or failure of mobile computing?

Answer

Any computer software that performs specific tasks is called Applications (Bovee 2012, p 256). Apps greatly enrich the experience of using a mobile device, and without them, the predictions for the future of mobile Internet would not be nearly as bright. They can range from large business computer programs such as “Sun Systems” for processing large accounting problems to a simple program that can be used to order something as simple as a pizza, in today’s world applications have become a part and parcel of the day today.

Today’s mobile and tablet users are becoming more and more inclined towards a product which has more number of application than the other product option. Although it can be said that such a thing has happened because of the fact that the devices today have become so specified that a certain range of products shall have the same specs regardless of their make. This change can be determined as a major shift in the consumer psyche and even the big three have not underestimated this change.

The development of applications and software’s to match these expectations is a task that all the companies in the fray to be the leader in the mobile computing market, wither it be Apple, Google, Microsoft or any other new player, shall have to look into great detail and precision.

The importance of mobile applications can be justified on this basis itself that Google has based their future growth prediction on the very same. Mobile applications have such a great scope of growth in the future that they can one day eclipse the sales of the hardware part of mobile computing and form a major market themselves here players like Google and apple shall have tough competition even from small fray players if a common platform for application usage is formed, the very same reason why Apple is resisting Google’s repeated efforts for a common mobile platform.

According to experts (Kevin, Timothy et.al) mobile applications are even today a big part of the on the go access market. Finish mobile giant Nokia too has a say in the application future as it still has the lion’s share in the applications that are used in its mobile phones, which in spite of the recent drop are a very big number. Applications and app stores are also being viewed as a source of major entertainment by many users of mobile computing devices, with games like angry birds and temple run taking the market by storm it is very evident that applications and app stores are a thing for the future.

Lastly it can be said that although all three firms have great opportunity in the market which is still young and in its infancy, the first mover shall have very definitive advantage to take control of this veritable goldmine.

Question 4

Which company and business model do you think will prevail in this epic struggle? Explain your answer.

Answer

Google:  

The search engine giant has a lot of positives going for it rather than the negatives. The clear positives that can make it a winner are:

• A well-established name is something which not a lot of players can boast of but Google is one of them, although Apple and Microsoft have chartered territories of their own but Google can fight them out both as an equal if not better.
• The Company has entered into all the three basic markets of mobile computing including hardware, operating system and the application stores. Their hardware is something which a few competitors can best , however the Android operating system has taken the market by storm and the app store which comes with it is a mean bully in itself (Android 2012)
• Google has also bet on of the most time relevant feature of the mobile computing market, the App store, and this is the biggest advantage which the Google business model gives it and makes it the prime contender for the number one position. With hundreds of applications already online and hundreds more in the development stage Google has started to take a sort of lead on the other players in the race to be number one. And this may not be decisive right now but with Google’s recent acquisition of application developers and their heavy R&D expenditure on the same, it is just a matter of time before it will take out companies like Apple and Microsoft. (Android 2012)
• Although the Google bandwagon is on its way there are certain roadblocks that it can face that can halt its march and some of them are:
• The Google brand is big but it still lacks the appeal of an Apple product and this many say is one of the most major difference between the two.
• The Android system although perfected to a large extent still has a few errors in the new versions that can hamper the growth of the operating system and this where a competitor like Microsoft can prevail over the Company
• Lastly it can be said that Google’s move towards a common mobile application platform can itself backfire and could increase competition from local app players which can affect the overall profitability from this step.

Thus it can be said that Google does have a lot of positives that can help it in the market and if it can take care of the negatives and maybe tweak the one platform stance, it can just pull ahead of Apple and Microsoft in this battle of the behemoths.

Question 5

What difference would it make to a business or to an individual consumer if Apple, Google, or Microsoft dominated the Internet experience? Explain your answer.

Answer

Consumers would be forced to buy only one product and use only one service. They would create a monopoly and the positive would be they would create a standard. This would affect quality; prices would be as high as possible because they would have no competition. No competition means nobody could force a monopolist from the outside to improve products, diversify rang or products and lower price. Right now it is too early to tell who would dominate the internet experience but it is good to have competition than just one market leader. 

Right now Apple leads Google in the number of apps available to users. That gap is closing quickly thanks to Google’s improvements of the Android operating system and its encouragement to app developers. Open, non-proprietary systems historically have beat closed, proprietary systems because developers and users have a wider range of choices. Business managers must try to forecast which platform will provide the right choices for employees. Consumers must choose which platform will best fulfil their personal needs for the next two to three years. Switching costs play into both scenarios, not just in terms of phone purchases but the price of apps. Once a user purchases and adjusts to using a certain platform it’s difficult and expensive to switch to a whole different system.

CONCLUSION

By the year 2000, the Internet has already become a multibillion dollar industry with Apple, Google and Microsoft being its major player. By this time, the direction of Internet’s further development has also already been set. The internet was showing signs of becoming the melting pot of media and entertainment, business and workforce collaboration, telecommunication, knowledge and other market. Apple, Google and Microsoft were the first most successful in taking action to integrate massive service in their product worlds. In the year 2000, when stock price of Internet showing down, they found themselves as strong survivors within a deeply distressed industry. This situation offers a rich menu of opportunities. The various IT firms were for sale or willing to cooperate under more favourable conditions. By this opportunities, Apple, Google and Microsoft set out to adjust positioning and capabilities in preparation of the inevitable recovery of the Internet.