Analyst: Consumer electronics companies should fear Apple more than Microsoft

“For the past few years, conventional wisdom has been that the one company the consumer electronics (CE) industry needed to fear most was Microsoft. Bill Gates and his team have been eying the CE market for 15 years, and if you study their overall CE strategy, you see that it is to have some type of Windows environment on any and every digital device a consumer will use in the future. They have made major deals with cable companies, telecom vendors and even cell phone hand set makers like Motorola and HTC and are becoming even more aggressive in trying to make Windows based operating systems and user interfaces a key element of CE based products throughout the entire CE eco-system,” Tim Bajarin, Principal Analyst for Creative Strategies, writes for Technology Pundits.

“Indeed, all of their ‘consumer’ based products are aimed at bringing more and more people into the overall ‘Windows World’ and use that as a starting point for Microsoft to sell new CE based products and services in the future,” Bajarin writes. “While I do believe the CE folks need to have a healthy fear of Microsoft in order for them to compete on a somewhat even ground, the company they actually need to fear most is Apple Computer.”

“There is a very distinct difference in the way Microsoft and Apple are approaching the CE market. Microsoft’s way is to create a radical new platform, such as they did with the Media Center, and push it out to the market in a bold fashion in order to get people focused on the concept and then let the early adopters help them validate the platform. In the meantime, they keep working on evolving the actual Media Center platform and in typical Microsoft fashion, eventually get it right by the time they have version 4.0 or 5.0 on the market. On the other hand, Apple’s approach is very subtle and in a sense, delivers new features that help move consumers towards the Mac and related products in a more controlled and measured way, but with better results,” Bajarin writes. “Unlike Microsoft who developed the Media Center platform and thrust it on the market as a new concept that needed to be evangelized in order to get it accepted, Apple uses a more controlled approach by adding new features somewhat sporadically and gently brings the market along with them and before you know it, Apple has become a CE powerhouse in their own right.”

“By using this more subtle approach and gently moving the market towards a Mac world where everything is easy to use and works together seamlessly, Apple could become one of the most important, if not the most powerful CE company someday. And while Microsoft should still be feared by the CE folks, Apple could be the one company that gives them the most problems in the future,” Bajarin writes.

Full article here.

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33 Comments

  1. In other words, Apple has a vertically-integrated syste (hardware, software and services) that screams quality and simply works well. That’s what the consumers ultimately look for. M$ thinks it’s better by simply flooding the marketplace with inferior products when all it really cares about is the income generated through licensing. I think that ultimately the CE industry hs found the M$ way of doing things is the wrong way.

  2. I believe that having a better interface, that is that the product/service is easier to use and configure is becoming the most important factor for success in the CE Market.

    Examples of this is TiVo .vs. the VCR, the iPod & iTunes .vs. “the Killer ipods” even Philips new campaing which touts simplicity as an advantage.

    Given that Apple stands in a much better position than Microsoft, IMHO.

  3. <<and in typical Microsoft fashion, eventually get it right by the time they have version 4.0 or 5.0 on the market.>>

    In a sense, Apple may be following MSFT’s lead. Think of it this way; MSFT jumps into a market that isn’t ready, with a product that isn’t ready, hypes the hell out of the product, then sets about morphing it into what the market actually wants.

    Meanwhile, Apple watches with interest, all the while determining what it is that the market truly wants, then, without fanfare introduces pieces of the product (which all have hidden dual/triple functions) over an extended period of time, UNTIL….

    ..The market is ready to accept the new technology, at which time Apple brings all the pieces (each proven products) together as the new widget MSFT’s propaganda machine pumped 3 years earlier.

    The difference is that Apple goes to market with a product that not only does what the market wants, it just plain works.

    MSFT’s effort? After 3 or more years of beta testing MSFT’s “new, next great thing” consumers have tired of waiting for Redmond to deliver a viable solution, and flock to Apple’s “late” entry.

    Being first to market is only important if you are first, and it works. This is MSFT’s ‘innovation’ weakness. What it comes down to is that, MSFT’s development process is fatally flawed.

    Bill Gates is a smart kid with attention deficit disorder, and a cash cow that smooths over his lack of vision and focus. Unfortuantely, MSFT’s past mistakes have built up a huge backlog of consumer resentment.

  4. The other aspect that the CE industry should fear about Apple is that unlike Microsoft, who only market software solutions, Apple will market both the hardware and software. With MS the CE industry was still left with the hardware – with Apple, unless you’re a partner (like Motorola or HP (was)), you will be fighting a totally integrated solution.

  5. ” . . . unlike Microsoft, who only market software solutions, Apple will market both the hardware and software. With MS the CE industry was still left with the hardware – with Apple, unless you’re a partner (like Motorola or HP (was)), you will be fighting a totally integrated solution.”

    Great point. This is what makes Microsoft a problem and Apple a competitor. Apple is not a problem. Apple is a solution. A good competitor will also bring a solution to market.

    And to Mr. Business Analyst, the business market is deader than a door nail. Microsoft has seen to that. Why to you think CE is where ALL of the industry is looking?

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