Apple Mac was gaining market share from Windows-based PCs and laptops; according to Fortune, between 2006 and 2012, Apple’s U.S. market share in the PC market jumped from 4% to excess of 14%. But since 2012, Apple’s market share has fallen back to 12%, and has remained around that number for years. Interestingly, 2012 was also the time Microsoft started making Surface. Largely, the arrival of Surface blunted the momentum of Mac devices.
There is a big lesson: Microsoft had relied on partners like HP, Dell and Lenovo to make Windows laptops and computers. Unfortunately, these entities were not at the top of the games on the composite of cost, derivable value and product innovation, triggering the loss of market share `which Windows was experiencing between 2006 and 2012.
But Microsoft decided to enter the hardware business – to make hardware it believes Windows will happily live in. That did not only blunt the encroachment from Apple, it provided a solid platform for Microsoft to create a definitive product Windows-based OEMs (original equipment manufacturers) could use as a standard when making devices.
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This is how Microsoft CEO Satya Nadella explains it in an interview.
“In doing a great job with it, I think we are inspiring others to do also a great job and raise their game..If you look at the ecosystem today and the quality of the PCs coming out this holiday from everyone and you compare it to the pre-Surface era, that’s a marked difference.”
This is exactly the reason why Google continues to make Android mobile devices (the Pixel series). Simply, it wants to match iPhone quality and in the process help Android to be seen as an OS that can power great mobile devices of the future. Leaving that work alone to Android OEM partners could affect Android, in the long-term, if the partners fail on execution. Largely, if Google Pixel succeeds, the Pixel will become the benchmark for Android devices. Yes, Google does not need to make money from Pixel – merely inspiring the Android OEMs will be good enough!
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You get to a point where you realise that there are certain things you cannot outsource, if you want to tell stories that are consistent with your values…
Once you figure out that your partners cannot measure up with your level of innovation, you simply take over and show them how it should be done.
There’s no guarantee that you will be successful in the new domain, but if you eventually succeed, you become a reference point, the new benchmark!
“There’s no guarantee that you will be successful in the new domain, but if you eventually succeed, you become a reference point, the new benchmark!” That is indeed the summary. Microsoft may not thrive here but it has to do what it has to do