Thursday, September 20, 2012

OS Strategy Changes In The Post-PC World

In the older PC business, it made good sense for operating system providers such as Microsoft to avoid competing with its customers. 

So Microsoft did not build its own branded devices. That began to change with the first non-PC computing devices, such as MP3 players and game consoles. 

Some were therefore surprised when Google built its own Nexus smart phone, and then acquired Motorola, thereby becoming a device supplier in its own right. Some were surprised when both Microsoft and Google decided to build and sell their own tablets. 

So what ever happened to the "avoid channel conflict" model? Some would argue that Microsoft and Google want to encourage innovation, and avoid the hardware commoditization process seen in the PC business, where suppliers mostly tried to compete by driving prices lower, rather than by adding value. 

So one way of looking at the changed strategy is that both Microsoft and Google want their respective ecosystem partners to focus more on innovation than price cutting. 

"The message to their device manufacturers is abundantly clear: If you’re not building devices that surpass what we can do ourselves, you’re not adding value," says Tony Costa, Gartner analyst

That appears to be another difference between the ways OS suppliers conducted business during the PC era, compared to what they are doing in the post-PC era. 

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