Microsoft vs Apple: Monopolist vs Innovator (part 2)

3) Competition pattern between MSFT and AAPL

In the famous PC vs Mac Apple commercial, we laugh at the PC guy that makes a fool out of himself every time. While don't forget the fact, which is not even hidden, that these two dudes are friends. It would be too bold to claim that Microsoft and Apple are friends in the real world, but the relationship between these two is never like that between Intel and AMD.

One simple fact is that it is impossible for MSFT to control 100% of the OS market, and another one, there are always people looking for alternatives when something becomes too popular. These actually guaranteed Apple a niche but very stable market. As it is somewhat out of the reach of MSFT and is relatively small, there is no sign indicating that the OS monopolist is worried or taking serious measures to fight for it. The series of 'I am a PC' commercials from Microsoft, led by Bill Gates himself, reads to me more like taking a high road, focusing on cleaning its own name without initiating attacks to Apple. From the Apple side, it keeps its low-end laptop around $1000, a price tag of a medium/high end PC system, while it could have easily got into a much wider market by releasing laptops between the $600 and $900 price range. My opinion, Apple has three concerns here. The first is to maintain the good margin it has been enjoying all along. The second is to maintain Apple as a somewhat luxury image. And the third, maybe the most important one, Apple would like to increase its market share in a controlled manner, rather than an explosive manner. I believe Apple has the weapon to boost its market share significantly overnight (for example, licensing Mac OS), but I doubt even Apple itself thinks it is ready to handle the consequential issues.

It seems that there is some type of implicit agreements between these two. As long as AAPL doesn't openly license its OS, it will never seriously threaten MSFT. In acknowledgment of this, MSFT has no issues seeing Apple take away some customers who would like to pay a premium to be cool and happy. As a result, we see MSFT in firm control of the overall market, while Apple enjoys a 'care-free' operation environment, as well as good profit and growth opportunities even though it only has a smaller piece of the pie.

With all these said, I have a big NO for the question 'shall Apple license the Mac OS?' It is like Apple is to bet with EVERYTHING it has for something that is doubtful it can handle, and doubtful it wants. Think about the immediately intensified pressure from MSFT and the long-term internal/external pressures similar to that of MSFT (discussed in the previous post), I think Apple is far from being ready. (read the speculated scenario if Apple starts licensing its OS here).

One more topic to cover: MSFT's chance against Google in the search market.

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