Their Biggest Advantages

Posted on May 22, 2017 by Paul Thurrott in Android, Cloud, Hardware, iOS, Mobile, Office 365, Windows, Windows 10 with 24 Comments

Their Biggest Advantages

This is apparently a typical Apple Store event. More likely, these people all need iPhone screen repairs.

A recent report describes how Apple is overhauling its in-store learning initiatives this week, creating “modern-day town square”-type experiences for customers. And that gave me an interesting idea about what I believe to be Apple’s biggest advantage.

And that thought led me down an obvious path: What about the other personal technology giants? What are their biggest advantages?

Consider this a game of sorts, and not a definitive list. These choices come off the top of my head, for the most part, and all are certainly debatable regardless. You may make other choices.

Apple: Retail stores. When Steve Jobs took over Apple in the late 1990’s, he couldn’t convince stores to stock his company’s products, and even those that did, did so poorly. After the success of the “store within a store” concept at CompUSA, Apple struck out on its own. And today, the company has over 270 retail stores in the United States and almost 500 worldwide. This is clearly Apple’s biggest advantage, a local place you can go to get your iPhone’s screen fixed, or to troubleshoot a problem with any Apple product. And then browse among the most expensive impulse buys in the history of retail. What are you going to do when your Samsung’s screen cracks? Exactly. Start praying.

Microsoft: Enterprise customer base With very few exceptions—Xbox, Minecraft—Microsoft has never had any direct traction with consumers. Instead, Microsoft’s “success” with consumers was always about users getting the same tools they had at work—a PC, Windows, Office—at home. Now that such a thing no longer matters, and users have turned to mobile devices and online services, Microsoft is leveraging its biggest strength, its enterprise customer base, by bringing them along for the ride—sorry, the transition—to cloud computing. Microsoft is uniquely qualified to manage this transition, as they’re trusted by the enterprise and have the only viable hybrid solutions that bridge the on premises past at the cloud. And for the software giant, this is the ultimate new business. It’s like the music industry selling customers the same music on CD as formats change. Except that the business model is a subscription service, ensuring a steady income for years and years to come.

Google: It’s the Internet gateway. Everyone makes fun of Google because it’s really just an advertising company. But we’re lucky that the company’s founders are computer scientists who care about solving deep problems, and the company’s core end user product, Search, has made Google the Internet’s gateway keeper. So the firm has leveraged this huge audience base—5 billion people and counting—and is attracting them to other platforms, like Android (2 billion users), and Chrome, YouTube, Maps, Play Store, and Gmail, all of which have over one billion users. Look over that list, folks, because all of those products are excellent, and are market leaders. And then imagine how terrible it would be if they used their power for evil. (To the privacy-averse, I’ll just point out that the privacy concerns that everyone, including me, rails about isn’t evil to Google’s founders, and I bet they’re just confused by the complaints. Yes, they’re robots.)

Amazon: It can mix and match physical and digital rewards. Amazon is the world’s biggest retailer but what makes this company unique is that they’ve also created interesting ecosystems of devices and online services for consumers and, more recently, for businesses too. But the firm’s biggest strength is that it can combine the physical and the digital, and offer unique value to its customers. Case in point, the Amazon Prime subscription, which delivers free two-day shipping on most physical items for just $99 a year. But Amazon puts Prime over the top by bundling a bunch of digital goodies into the subscription too: Prime Video, Prime Music, Prime Photos, Kindle Owner’s Lending Library, Prime Reading, Kindle First, Audible Channels for Prime, Amazon Music Unlimited, Video Add-on Subscriptions, Twitch Prime, and much, much more. No other tech giant has this kind of versatility, and given Amazon’s customer service focus, this firm is utterly unique.

Facebook: Eyeballs. Loathed by many, Facebook is loved by even more people, and with almost 2 billion monthly active users, this company has created the most successful social network on earth. Which it has leveraged by creating offshoot services like WhatsApp (1.2 billion monthly active users), Facebook Messenger (messaging, over 1 billion users) and Instagram (photo sharing, over 700 million users). This is a captive audience that catches up on their friends’ meals, political views, family events, and stupid meme sharing rather than reading real news sites to find out what’s going on. And it’s working: All of Facebook’s services are growing at ever-faster rates.

On a related note, it might be fun to debate what these firm’s biggest disadvantages are.

For example, Microsoft has never understood consumers and is never considered cool (for good reason).

For its part, Apple will never field a truly awesome online service let alone a digital assistant that works well because it refuses to disrespect your privacy, a high-minded policy that limits the effectiveness of such things.

Google can’t stop copying other companies in order to enter new markets, a character trait that makes it second rate in the eyes of many. It’s never seen an idea too good to not steal.

Amazon isn’t cool in any way, shape, or form, which will limit the successes of its consumer-focused hardware, software, and services offerings. I suspect that most Prime customers never take advantage of most of its freely bundled digital services.

And Facebook spreads fake news and people are already growing tired of all the whining on the service, and would have left already if only there were a viable alternative. That wasn’t owned by Instagram.

And so on. Maybe this is too easy.

 

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Comments (24)

24 responses to “Their Biggest Advantages”

  1. glenn8878

    Microsoft needs a Samsung equivalent to sell it's products. It could be HP, but HP is more Enterprise than Consumer. The problem with Microsoft's products is it isn't sufficiently tailored to the consumer market. They just don't know how much of a miss Metro is. How many years wasted?

    • johnbaxter

      In reply to glenn8878:

      Since 2013 HP has been two companies with (increasingly) different sets of shareholders. The HP most of us deal with is the PC and printer company selling to consumers and small(ish) business. HP Enterprise does the enterprise stuff.


      This split seems to have led HP Inc to make quite good PCs, as this business was put into a sink or swim position, and so far, rather to the surprise of many observers, they are swimming rather well. (Being able to swim in pools of printer ink has helped.)

  2. Roger Ramjet

    In no particular order:

    Amazon's biggest advantage is actually Jeff Bezos. It is only the rarest of human beings (Elon Musk is also one, Jobs failed in his first try, and the second time wasn't as hard since Apple wasn't iffy on an investment basis), who could gain the confidence of both the investor and technology communities for so long (many others can do it for a short time of a few years) that they postpone forever showing investors the money on an iffy business, stratospherically valued, while they cast about for what might truly work. Bezos found it eventually with Cloud, not sure Musk will be so lucky (he might get a big break if any of the various new battery techs reported in the news pan out or something similar happens). But in any case, any person that can gain the reputation to do this has the one ring.

    Apple/Google: The biggest advantage of these two companies (at least when speaking in a relative sense, to the few other companies that can be considered their peers)  is the same: they are the most important local companies in the Silicon Valley, the place that tells the world what to think when it comes to tech (its sort of like the media is based in NYC). They have used this advantage in their struggles vs. Microsoft to great effect, especially when playing home team in FUD skirmishes.

    Microsoft: agree, its their legacy enterprise presence & network effects, but also the hoard of technology IP, both formal and informal, they have from the time they dominated like no other. These are what gave them the staying power to survive, at scale, two big whiffs in mobile and the new store centric ecosystems that both Apple and Google got with their mobile wins.

    Facebook: probably that Bill Gates advised Zuckerberg not to make the same mistake he did ;-)



  3. Chris Lindloff

    I have a love/hate relationship with Google.


    I love Chrome, Google Photos and Google Maps. Great products that I use every day. I also use Youtube (not to upload) but more because it is basically the only game in town when you need video content of its kind of nature. Apple and Microsoft use Youtube to show off their products.


    The on the hate side I still don't fully trust them with privacy. All you have to do is look at their revenue and see that 88% of their mission in life is to get all the data they can so they can sell targeted ads. For this reason I will never use Drive/Apps that hold my most private information.


    They have a bad past reputation of killing off stuff that people still actively use. I worry about stuff like Google Photo's, their third attempt at photos, just closing shop one day.


    I am an iPhone user that keeps looking at moving to Android. I would go with the Pixel to have the best updates. However Android seems like a mess and Google does not help it. What is the messaging strategy for Android??? Hangouts, Allo, android messenger? How about email Gmail or Inbox??? Speaking of Gmail, I simply never liked the UI. I want folders, replies at the top and simple sorting features like by name, etc. I know you can use tags/search to get most of it, but I ditched Gmail after trying to like it for more than a year. It now forwards to my outlook.com account.

  4. davidblouin

    Reading this article reminds me of that drawing where each Microsoft division point gun at each others. I think we finally have a winner (or survivor) to this mexican stand-off

  5. PincasX

    It isn't the stores that are the advantage it's owning the customer experince from start to finish. They make the device, they make the software, they make the services, largely own the purchasing process (retail and online) and they own the support. That allows them to provide a quality experience at all points. It is also the weakness. If misfire on backing the wrong technology or don't support a popular third party service is can bite them in the ass. They completely missed the MP3 boat at that the start and had to play catch up with that with iTunes and adding writable drives, they bungled the current Mac Pro by betting on people wanting two video cards rather than having run that runs hotter. There are other examples out there as well. The end to end also ultimately limits the customer base. With the exception of the iPod Apple has never really dominated a market they are in but has always managed to carve out a solid niche.


    • Chris Lindloff

      In reply to PincasX:


      I own a iPhone 7, iPad Air 2 and I get a Macbook through work to support Mac users, mostly executives. I also have a few Windows PC's through work (desktop, laptop) and a gaming desktop at home that I do other stuff on.


      The iPhone is good with the biggest factor keeping me there is timely updates. The iPad is nothing but a consumption device, mostly video content and books. I will probably never buy a iPad again. The Mac is really nice hardware in terms of fit and finish, amazing track pad and great battery life, but if I did not need to support the Mac users I would not buy one personally. They simply cost too much and a $500-800 Windows laptop would be just and good to me.


      Apple's software IMHO is simply horrible. Pages/Numbers/Keynote are a complete and utter joke. The iLife products have been ruined, dumbed down and they have lost all advantage they used to have with things like Google Photos etc showing Apple how it is done.


      The iWatch is a joke.....nuff said. Apple music is the same price as all the others (Google, Amazon, Spotify) but with horrible software both with iTunes and the iOS apps. They are totally confusing UI's compared to the others.


      iCloud is now better but it is still slow, and pricing is the worst compared to the others. Not to mention iCloud is not on Android and barely on Windows.


      Siri sucks bad. I put it .....Google Assistant, Cortana, Alexa, the 5th grader down the street.......Siri in terms of AI ability. Apple is so far behind in the AI/Cloud world it is kind of funny considering how much money they have. God help them if the iPhone falls out of favor.


  6. ponsaelius

    There is are two Apple Stores in my locality. One at Eldon Square in Newcastle and the other in the Metrocentre in Gateshead.

    Both do what Apple do well - they are decent shopping experiences for consumers. We also have a Samsung store too. Sells all the Samsung mobile gear and Samsung PCs.


    There are no Microsoft retail places in the UK and the experience is fairly average at PC-World superstores. I did try the Microsoft retail store in San Francisco when I was on holiday 2 years ago. I bought a couple of tablets which came with an office subscription and gift cards worth more than the value of the tablet when I translated dollars to pounds. The buying experience was excellent.

    However Microsoft has a "US Only" policy for a lot of it's offer so almost no one outside the USA even knows they have a retail offer.

  7. red.radar

    The stock photo lacks age diversity. Apparently the Apple store events is a Millennial only affair. Which is odd because when I am in the apple store its always Baby-Boomers getting tutorials on how to use their products.


    /sarcasm.

  8. Bats

    WOW...another hit on Google calling it an "advertising company," when they are really a data management company.

    Calling Google an Advertising Company is just plains stupid. An advertising company focuses on one thing: creating commercials and other forms of advertising. Google doesn't do that. To call Google and Advertising Company is like calling CBS, NBC, ABC, FOX, ESPN...advertising companies. 

    LOL...why Paul continues to purposely misunderstand OR purposely mislead people is beyond me.

    Also, who exactly makes fun of Google? Lol....huh? 

  9. dcdevito

    I would add the following:

    ADVANTAGES

    1. Apple - hardware, user experience, supply chain
    2. Microsoft - Productivity software
    3. Google - Smartest features, education market
    4. Amazon - Cloud platform (IaaS)


    DISADVANTAGES

    1. Apple - Cloud services, AI, closed ecosystem
    2. Microsoft - Mobile platform, consumer services and apps
    3. Google - ADHD, supppy chain, retail experience and presence
    4. Amazon - bad products and apps
    5. Facebook - weak enterprise presence
  10. Waethorn

    "Case in point, the Amazon Prime subscription, which delivers free two-day shipping on most physical items for just $99 a year. But Amazon puts Prime over the top by bundling a bunch of digital goodies into the subscription too"


    Seriously, when are people going to get it through their thick skull that Amazon online services are mainly just a US thing. In that regards, they're not the world's biggest retailer at all. In fact, I'd say that Alibaba's numerous endeavours are far more reaching than Amazon, since Amazon longs for being even a bit-player in China, and Alibaba's B2C stores reach the majority of the billions of consumers in China and India, which is far greater than the US.

    • fbman

      In reply to Waethorn:


      But The US think they are the entire world.. like with chrome books, that is a US success story, the rest of the world never really took to them. But site still say, chromebooks are taking over the world.


      Sometimes I wish Microsoft would realize this as most of there services dont work outside the US.

  11. cybrtitan

    I think between your article and this one of a similar nature that I read just the other day shows the importance of surface to Microsoft https://www.theverge.com/circuitbreaker/2017/5/21/15672046/tech-hardware-physical-love

  12. SvenJ

    Does anyone recall that Apple had stores in the late 80's. Don't think they were company stores, but they only sold Apple products, Apple II, Apple IIc, Macs. They also sold Apple merchandise, hats, scarves, sweaters, generally with the old colorful apple on them. One feature of all these stores, even back then, was the authorized service center with Apple trained techs. They were all about customer service and experience even back then.

    One anecdote from the time. My Apple IIc supported only 5.25 floppy disks. Apple released a 3.5" drive (single sided) and my IIc revision didn't support it. I took my IIc to the Apple store, bought a 3.5" drive, and walked over to the service window, and handed the pair to the tech. Yes you actually talked to the tech back then. I noted that the drive didn't work with my IIc. He said, yup, hang on a minute. I watched as he put my IIc on the bench and cracked it open. He pulled my motherboard, pulled a box off a shelf, took the brand new motherboard out of the box and slapped it in my IIc case. Buttoned it up, handed it back and said, 'it works with it now". I paid for the new drive, that's all. Making it work with my equipment was just a part of the deal.

    Over the years, my experience with Apple has always been pretty much just like that. They do their best to make sure you are happy. You read about different experiences, but often it seems there are people you just can't make happy, no matter what you do.

    So, besides stores, I think the customer focused attitude of Apples customer interface is unmatched.

    MS itself seems to do well, but the consumer doesn't often deal with MS, they deal with Dell, HP, Best Buy, etc. The experience can vary greatly, but often reflects on MS.

  13. chrisrut

    Spot on Paul.

    I think "corporate self-awareness" - knowledge of their actual strengths and weaknesses - varies among the companies as well.

    What's your take on that?

  14. Narg

    I've seen Apple's recent iPhone picture/video learning on YouTube. Impressive, but not really. Seems geared for the beginner, never touched a smartphone type beginner. Not very helpful, but still well done. Something tells me the Apple Store initiative will be the same. Too simple, but well done. Kind of like everything Apple does. :/

    Microsoft has had some success with the Surface line.

    Google isn't quite "just an advertising" company anymore, is it?

    Cool? While neat to be cool, it doesn't draw my dollars any more than "DOES IT WORK!"

    P.S. seems school age kids are finding Google exceptionally cool these days...

    • Vuppe

      In reply to Narg:

      "Cool" is the reason Apple is a success.

      "Cool" is the reason Samsung is a success.

      Look at all the fantastic hardware out there that's not a success. HTC, LG, Sony (less PlayStation), HP, Dell. They're not cool, so they're not huge successes. Sure, some limp along or even do pretty well – but they're not Apple or Samsung.

      "Cool" may not get your money, but cool gets youth and youth drive the market. Surface is cool enough, but it's still not Apple cool.

    • geschinger

      In reply to Narg:

      While Google does a lot of interesting things it is still primarily just an advertising company in the end. They haven't been able to convert any of the numerous other interesting things they dip their hands in into reliable revenue sources. I think in 2016 the percentage of their revenue coming from advertising was still > 90%.

      • Mark from CO

        In reply to geschinger:
        I think many people, including Paul, miss the point about Google's strategy.  Yes most of it's revenues is advertising.  But that's not the point.  It's like saying Microsoft wants most of its revenues to flow from a subscription base.  In either case, it is a different way for consumers to pay for the technology services they consume.  Google's approach is indirect (consumers pay nothing directly for the technology they consume, but indirectly through the advertising); Microsoft is direct (consumers pay directly for the technology).  But none of us should be confused, Google is as much a technology company as is Microsoft.  And unfortunately, the last 5 years at least, Google has been out technologing (new word!) Microsoft.
        Mark from CO


  15. conan007

    Apple Stores are like temple to religion followers - they need a place to worship.

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