Category: AI, Computation, and Technology

WITH STEVEB GONE I HAVE MORE FAITH IN MSFT. BUT….(?)

Sure they’re just following Apple, but their hardware will always be cheaper, so over time it’s harder to justify the apple ‘cool’ premium if there is decreasing difference.

Microsoft has the game, technology and business market, and apple has the creative and status market. Microsoft’s market is larger, and always will be larger. And at some point it gets hard to pay a large premium for apple desktop style.

Microsoft owns the application space, and it’s very hard to see that advantage going away now. Apple would have to enter the app space to compete with Microsoft if the profitability of its phones slips.

Apple makes its money off it’s iphone (70% of profits), not its laptops and controls 20% of the smartphone market. Samsung competes in the phone space because it’s products are cheaper. Microsoft owns the business space because it’s products are cheaper. Apple’s record profits are not created by market share but because of the higher price it commands.

For the past few years I have been predicting that if the iPhone stops profitability that the only solution for apple is to directly attack Microsoft’s laptop and desktop base in the workforce.

This is fairly easily done, first by acquisition and in-window hosting of Microsoft apps, and secondly by developing its own cloud solution and own apps.

Now one might argue that the network effect is challenging, but I don’t really see Microsoft in an advantageous position. Drastically improving the document (Word) and spreadsheet (Excel) experience is something I know how to do, so someone else might need to also.

By leapfrogging Microsoft and casting them as the legacy brand it would be possible to undermine Microsoft’s revenue stream, eliminate their price negotiating with the licences that generate most of their revenue, and provide a long term sustained attack on the every aspect of their unnecessarily diverse and complex product line.

I assume that if I know how to do this someone else does. The problem for apple (or google) is not so much doing such a thing, but it’s having the incentive – which google’s ad revenue, and apple’s hardware revenue don’t yet provide.

Right now it’s a problem of INCENTIVES, not a problem of ABILITY to compete.

Now some people might realize that Oversing is a warning shot in this direction. But the fewer that recognize it, the longer I have to make it inevitable.