Microsoft tries to match Apple’s vertical approach

“When Microsoft launches its Zune to compete with Apple’s iPod, it won’t just be reversing its own strategies, but going against two decades of received wisdom. This could indicate a sea-change that will help more people get what they want. But it could also lead to users being increasingly locked into whichever systems they happen to buy – and ultimately paying higher prices,” Jack Schofield writes for The Guardian.

Schofield writes, “According to Ted Schadler, an industry analyst and vice-president of US-based Forrester Research, that’s the new trend. ‘Consumers hate complex things,’ he says. ‘They want to be handed a working solution.’ Last December, Forrester published a research note: “Sell digital experiences, not products.” It points out that consumers buy products but often don’t buy the content and accessories they need to get all the benefits. For example, half the US consumers with high-definition TV sets don’t subscribe to HDTV programming.”

“The idea’s poster boy is Apple’s iPod system, which includes the online iTunes Music Store and iTunes software on personal computers. Analysts believe that this vertical integration of online store, PC and portable player enabled Apple to deliver the ease of use that helped it overwhelm the [market],” Schofield writes.

Schofield writes, “Apple’s vertical approach to the music market matches its vertical approach to personal computers, where it maintains control of both hardware and software, its own online service and even its own shops. Microsoft’s [PlaysForSure] horizontal approach matches the one it took with its DOS and Windows operating systems: it licensed them as widely as possible. For Microsoft to try the vertical approach is out of character, and means it will be competing against itself and its own partners in PlaysForSure.”

“Vertical integration may now be making a comeback because consumers are facing the problems businesses faced before: integrating a wide array of products that they barely understand. These include PCs, printers and webcams, smartphones, portable media players, digital cameras, set-top boxes and digital video recorders, games consoles, internet phones and home networking,” Schofield writes.

There is much more in the full article here.
First off, Microsoft’s Zune is a rehashed, rebranded Toshiba Gigabeat with Microsoft software, so it’s not a true vertical solution. Microsoft can’t help having too many cooks in the kitchen, even when they know it’s counterproductive.

Apple’s Mac was once vertical-only, but now, with Mac OS X’s compatibility with Linux and Windows along with the Mac itself able to run Linux and Windows natively, the Mac platform is both vertical and horizontal. The Mac, and only the Mac, is now the universal personal computer: it runs the most software, it also runs the best software, and it’s fully compatible with everything. If Apple can get the message (Macs run Windows and Mac OS X, you get the best of both worlds!) out to the general public (and Apple has a long, long way to go with that task) then the Mac will make explosive gains on the PC hardware market. As people get Macs, even if they intend to run Windows mainly, they will be exposed to Mac OS X, iLife, and many other Mac-only applications. Over time, they will see what Mac users already know and find themselves using Windows less and less. Microsoft should be worried. PC box assemblers like Dell, HP, Gateway, Lenovo, etc. should be scared zuneless.

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  1. Let’s hope for the rumored fast user switching between Mac OS X and Windows to get even more people to give Mac a try. THAT would be the ultimate “show off” feature. Once they see the Mac OS X difference, the only times they will switch over to Windows will be to run some Windows-only app they need for work.

    I realize that Parallels Desktop does the concurrent stuff now, but having the screen rotate over to Windows and then rotate back to Mac OS X seems even more intuitive. And there would not be the additional cost.

  2. Schofield writes, “According to Ted Schadler, an industry analyst and vice-president of US-based Forrester Research, that’s the new trend. ‘Consumers hate complex things,’ he says. ‘They want to be handed a working solution.’

    It took research to figure that out? I think cunsumers have always wanted a working solution. Unfortunately, nobody else ever figured that out until Apple came along.

  3. Hahahaha….I remember a couple of years ago when everybody was saying “Vertical markets are doomed! Apple is a relic! They should dump the Mac! The iPod will be killed once Microsoft’s ‘ecosystem’ gets out! Nyah nyah nyah!”

    Hint: vertical markets are great if done well. Apple does them well. End of story.


  4. I attended a business networking lunch on Tuesday where the iPod Product Marketing Manager from Apple presented on iPods, iTunes Store and Podcasting. It was a very impressive presentation particularly when he demonstrated how easy it was to create a Podcast with GarageBand, iPhoto and iTunes using just one hand (he was holding a microphone in the other) then uploading it onto a website for later publication through iTunes Store.

    He delivered the best line in the whole session during the Q&A session in response to a grey haired ‘business leader’ who asked how much GarageBand cost and if it was available on WinDOS:

    “It costs just a few hundred dollars but the best part is that it comes with a free Mac Mini! Oh, and you can run Windoze on it… if you have to…”

    Therein lies the opportunity for Apple – use stealth mode to sneak a Mac back into the office! Actually, while I’m here, Mr J should check his ego at the door and… well, pick up the Newton and deliver it back to the world as a truly advanced piece of ‘personal computing’.

    Make it an appealing device (like, as appealing as an iPod is today) with high ‘utility’ value for the white collar masses in the world of business. A Newton on 21st Century steroids. IT departments of the future will not have estates of PCs in their businesses as workers will arrive at work with their own computing devices that simply recognise and set their context based on whether the user is at home near a domestic Airport signal or in the office near a corporate network. A friend of mine already takes his personal laptop (with wireless broadband) to work, in addition to having a PC provided by his employer, simply to deal with his personal life as it develops: he uses his personal machine to check personal emails, trade shares, on-line banking etc After all, employers certainly don’t own all the cars their staff drive to work in, so why the desktop? The guys over at Apple Matters have a great wish list going if some good ideas on what this device should contain are required:

    I’ve been using Macs since 1984 and having had to live on WinDOS for a few dark years, I am now OS ambidextrous. Today I run my own consulting firm and that is Mac based. I’d just hate to go back to WinDOS.

  5. With all the ignorance Jack Schofield has shown us in the past it seems a shame to give him much credit for this one, so I don’t.

    He’s an ignorant hack andI regret to say I’d probably flatten him if I ever met him face to face!

  6. @ken1w

    Parallels Desktop already allows you to do something like that. If you are running Windows (or whatever…) with Parallels in a window you can switch to fullscreen mode and back with the rotating cube “Fast User Switch” effect. Very cool and it totally blows people’s minds when they see it.

    Of course, it would be taking it to the next level to do it the way you are saying.

  7. ” ‘Consumers hate complex things,’ he says.”

    That’s right. Stupid consumers, and I’m proud to say I’m not a stupid consumer.

    Every time I start my car I make sure the hand brake is set, turn on the choke, yell “contact” and flip on the magneto, retard the spark and pull out the hand throttle. Only then do I go to the front of the car and crank it. What’s so complex about that?

    I built my own color TV, too. I have a Du Mont with a 12 inch screen, and put an electric fan in front of it. I replaced the blades with colored transparent plastic, and can set the fan’s speed with a rheostat. When I match the spinning blades’ rotation with the flicker rate, sometimes the picture looks like it’s in color!

    I don’t like computers. They’re too complex, and I’d die before allowing anything in my house I don’t understand. My computer runs on kerosene.

  8. I personally really like the Gigabeat S. I’ve been using it for six months with no complaints. One thing that would help is some accessories to the Gigabeat. A company called M-edge ( is helping somewhat by making a case for the Gigabeat, but an iPod style line-up of accessories would be great.

  9. Reality Check time, guys.

    Apple is a prime example of a vertical market. They make the OS, they “make” the hardware, and they make enough of the software that you don’t really need much more than their software delivered with your new system – and they make some of that extra. Ditto with the iPod – they design it and have it built, they sell it in their stores, they can sell you most of the content you could possibly want.

    OK, neither MS nor Apple actually builds their own hardware. Does it matter that the first version of the Zune is a rehash of an existing product? Depends on who designs the second iteration. Doesn’t matter a fig who builds it. As for Macs being “compatible” with Linux and Windows … that is a mere vague possibility for the vast majority of Mac users. Like saying “you can run AutoCAD on Windows” – it may be true, but how many Windows users know, care, do?

  10. DL,

    Re: “As for Macs being “compatible” with Linux and Windows…,” it’s not that it’s “a mere vague possibility for the vast majority of Mac users,” it’s that it is a reality for potential new computer buyers that can influence their buying decision. Provided they do a bit of research. Which any intelligent consumer should do when making any purchase.

    Multi-platform tools (iTunes, iPods, Macs, and soon iTV) give people a lot of options they don’t have with tools restricted to single platforms (Windows OS and non-cross platform software, and OS-dependent hardware makers such as Dell, HP, Gateway, etc.)

    Every multi-platform environment that now exists (and there are a lot more than most people suspect) now only needs to buy a single type of computer. No need to waste money buying and supporting multiple platforms.

  11. DL,

    It’s not about manufacturing, but design.

    Apple designs its products – both hardware and software are designed together as a synergistic system.

    The Gigabeat/Zune’s hardware and lowest-level software was designed by Toshiba. Microsoft is adding their software and presumably some input regarding hardware changes.

    The Apple way and the MS Zune way are not yet the same. If MS adds expertise in hardware design for its next iteration of the Zune (assuming there is such a thing), then maybe they’ll come closer to the Apple way.

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