Apple, Google, Microsoft and Amazon are locked in a battle for
control of our digital world. In addition to their heartland
businesses, they each now offer an ecosystem of mobile devices, apps
and cloud storage. And each appears hell bent on integrating all
the aspects of their offering to lock users into their own
little splinternet. Will one of these ecosystems win
the battle, or is there an alternative scenario?
Such is the rapid pace of technological advance that a lot can
happen in a relatively short time frame. Just consider the changes
that have taken place in the mobile phone market over the last 10
years. In 2003, according to BrandZ data, Nokia and Motorola
dominated the hearts and minds of handset users in the USA. Just 10
years later and they are mere shadows of their former selves (and
Motorola Mobility part of the Google empire). In the intervening
time frame, RIM's BlackBerry surged to the forefront only to be
supplanted by Apple's iPhone. Now there are indications that
Samsung and HTC are clawing their way into people's affections, and
the iPhone's grip is slipping.
Given the rapidity with which technology rises and falls in one
category, is it any wonder that the big players want to stabilize
their businesses by integrating their products across as many
products as possible?
Even if they cannot be winners in a category, they need to have
some presence in order to blunt a possible competitive threat. So
Apple's iPad is the dominant tablet, but that has not stopped
Amazon, Google and Microsoft from trying to undercut that franchise
with their own spin on the tablet. Each competitor has tried to
make its own pitch unique. Amazon's Fire most clearly leverages its
ecosystem, but both Google's Nexus 7 and Microsoft's upcoming
Surface run their own OS, and will no doubt tap into an extensive
array of apps.
Similarly, a few weeks ago Apple announced that it would dump Google Maps in favour of its own map
service as part of its new mobile operating system. This move
reduces Google's presence on Apple devices and denies Google access
to data and users. But while it might lock existing Apple users
into the system, I suspect it also means those of us who are
habituated to Google Maps may be one step further away from
switching to an Apple device. And, as noted in the New York Times article, making sure the
system lives up to expectations is going to place a significant
drain on Apple's resources, possibly as much as $1 billion a
year.
And surely that is where the risk lies in the battle of the
ecosystems. Each company now needs to fight on so many fronts, that
time and resources are committed to ongoing projects rather than
new ones. All four companies have deep pockets, but they are only
so deep. And locking consumers in or out of a technology
(particularly when they are forced to use sub-optimal products as a
result) is a risky one. So in answer to my own question, my
suspicion is that no one is going to win in the ecosystem battle.
Stalemate is the best that the incumbents can hope for, leaving the
way open for left-field competitors to exploit new
opportunities.
So what do you think? Stalemate or outright winner? Incumbent or
new player?
Source: Millward Brown