Microsoft and Google both want to build vertical businesses. They want to follow Apple and own a complete technology stack including hardware, core software and services like app stores and cloud storage.
Who is best placed to join Apple?
Let’s start by looking at the current state of the market for the three companies.
The chart at the top of the page shows the relative position of Apple, Microsoft and Google in the three key personal technology markets. I’ve simplified matters by identifying which company is market leader in each sector.
Microsoft leads the traditional PC market. Apple follows with roughly one tenth of Microsoft’s market share. Google lags in this space. Google’s market share isn’t even one tenth of Apple’s.
Apple is clear leader in tablets
Google’s Android OS commands a smaller market share while Microsoft trails. Things are similar in smartphones despite Android phones outselling iPhones. That’s partly because Apple owns hardware and software while Google’s brand has a lower profile.
Microsoft has its own tablet hardware, while Google has its own-brand phone and PC hardware.
Just to confuse matters, Microsoft earns licence revenue from Android sales. It is possible the company makes more money from Android phones than from Windows Phones.
At first sight it looks like Microsoft and Google are on level-pegging. Yet Microsoft is strongest in the declining traditional PC space while Google is ahead in the fast-growing mobile sectors. At this stage of the analysis it looks as if Google is better placed than Microsoft to build its own Apple-like vertical technology stack. However, there are other matters to consider. We’ll cover them in another post.