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iOS v. Windows and Immunity to Disruption

The pattern of Mac growth exceeding Windows PC growth (and overall PC growth which includes the Mac) is old news. It has been observed for at least 40 of the last 42 quarters.

Screen Shot 2015-07-10 at 12.47.04 PM

It’s a historically interesting contest, but the story of computing has moved on.  Starting with building computing, via floor computing, office computing and then to desktop computing and portable computing we are now in the era of mobile computing.[1]. The problem with observing mobility in general is that there are too many mobile computing options. Phones have a wide range of capabilities, tablets and various other form factors are positioned on differing jobs-to-be-done. Platforms and services are also scattered around jobs which have been carved from fixed computing or have been established with no fixed precedent.

So can we pinpoint with any accuracy the moment when the tipping point has been reached? We could point to all mobile phone shipments, or even the vaguely-defined smartphone shipments compared to all PC shipments. We could look at tablets alone. If we could get accurate measurements.

One measurement could be to look at operating systems alone. When comparing iOS shipments (iPhone, iPad and iPod touch) to Windows we can see that combined iOS shipments exceed all Windows PC shipments for all three previous quarters.

Screen Shot 2015-07-10 at 12.54.25 PM

 

Which reminds me. This week Microsoft wrote off the acquisition of Nokia’s mobile phone business. The growth of mobile as an alternative to desktop/laptop computing was foreseen by Microsoft a decade before the the data in the graphs above. It began in 1994 with Windows CE development, proceeded with a PDA operating system by 1998 and the Pocket PC brand in 2001 and Windows Mobile in 2004 and Windows Phone in 2009.

After anticipating, predicting and dedicating decades of work why didn’t Microsoft  participate in its own vision?

The curious thing about disruption is that predictability does not result in immunity. If the new trajectory threatens the current profit formula, the trajectory is not joined with enthusiasm. There is an uncanny unwillingness to self-disrupt.

The exceptions to this rule are so rare that they are seen as magical, enabled only by accident or catastrophe.

Notes:
  1. And as sure as the sun will rise tomorrow we will move beyond mobile computing []
  • Walt French

    “If the new trajectory threatens the current profit formula, the trajectory is not joined with enthusiasm. There is an uncanny unwillingness to self-disrupt.”

    Canny: having or showing shrewdness and good judgment.

    Maybe you should’ve written it as “un-canny.”

    But willingness needs to be deconstructed, too. Just a bullet point item is not enough; the available evidence is that an organization needs to build the processes/resources/etc to do so. And that seems a very hard problem, even for an organization with a 5- or 10-year horizon (which is itself a seemingly near-impossible challenge).

    Anyway, all this is to celebrate the vision & dedication of one Mr. Steven P Jobs to dragging us, kicking & screaming, into the 21st century.

    • airmanchairman

      Seriously insightful article and comment. This probably explains why so many analysts, bloggers and commenters frequently revert to phrases like “Karma” and “taste of their own medicine” when recounting tales of massively disrupted organizations – they probably preoccupied themselves with dishing out disruption to competitors with nary a thought about said disruption’s effect upon their own organisations further down the line…

    • r00fus

      Which comes to the point of what Steve thought his best invention was, and he said “Apple”. The company that knows how to reinvent itself, and produce amazing products.

  • Jeff G

    I love you, Horace!

  • Luis Alejandro Masanti

    “The exceptions to this rule are so rare that they are seen as magical, enabled only by accident or catastrophe.”

    Today’s quoth steve’s quote reads: “ If anybody is going to cannibalize us, I want it to be us. I don’t want it to be a competitor.”

    So, the exception to the rule seems magic but —at least at Apple— seems enabled by the company’s DNA.

    • r00fus

      DNA is an apt word. Our DNA has lots of history (inactive markers) that were useful 500M or 500k years ago when the environment was different.

      Apple’s environment is that they almost went under. They learned from that, grew hungry and stayed that way. Microsoft has never had that lesson. They might never be able to learn from that lesson.

      Satya has a tough time ahead. He’s got the right idea – reposition MSFT as a cloud-centric company, but it is indeed a huge ship, and it may not turn in time to avoid the rocky shoals ahead.

  • Samir Shah

    Apple Watch phone will disrupt iPhone.

    • http://www.asymco.com Horace Dediu

      Indeed that is what theory would suggest.

      • Sacto_Joe

        One of my favorite uses of my Watch is as a hands-free phone while driving. It’s note “perfect”, but with Siri it’s pretty darned useful!

    • Nate Bird

      As of today that sounds crazy but it probably will happen faster than we expect.

    • mithlond

      Put another way, Watch will be hired for jobs iPhone is currently hired for

  • Matt

    I see many electric utilities sitting right where Microsoft was. They see distributed solar generation and battery power disrupting the business, but in most cases regulatory policies and legal restrictions prevent them from even participating in this future, leaving this market open for the SolarCities of the world to enter. With high overhead costs, powerful unions, and legacy assets, utilities are lame ducks with their hands tied. Unlike Microsoft however, here the disruption is happening at a much slower rate.

  • rational2

    Good point about the lead time Microsoft had on mobile. Similar story with Search. The first Internet Search service from Microsoft went live in 1998. Yet, it managed to let Google disrupt it.

    • r00fus

      Likely because they were positioning search as the yahoo/lycos-killer. Google disrupted everyone.

  • handleym

    “After anticipating, predicting and dedicating decades of work why didn’t Microsoft participate in its own vision?”
    The problem is something I’ve called “the tyranny of unity”.

    Microsoft CANNOT think of itself as a “tech” company or a “software” company; it thinks of itself as the WINDOWS company. And that narrow vision skews everything they do; most recently the insistence that “Windows” had to mean the SAME thing on all form factors, with the disastrous One Windows idea of Windows 8. It’s that same mental model that meant they couldn’t ditch the Win32 API even after they invented the replacement in .NET.

    Intel suffers from the same flaw. They cannot see themselves as a CPU company or a fab company; they see themselves as the x86 company; and their flaw is insisting of forcing x86 into their mobile CPUs, with everything that implied for much longer development times, and a constant terror that they can’t make the low-end too powerful because then it will cannibalize the mid-range. And they still haven’t learned — Quark is a useless piece of nonsense that will NEVER get a significant design win, even as bespoke mid-range ARM moves into watches and low-end M-class ARM moves into IoT.

    Apple and Google, on the other hand, have been remarkably good at NOT defining themselves as “the Mac company” or “the browser search company”…

    • demodave

      Interestingly (and in contrast to Microsoft, I think) IBM can see far enough to recognize that Apple is a good company to publicly do business with. Microsoft does business with Apple, but it isn’t as outspoken about it. (Google may be the same way.) I am hoping that my employer can also make sweet hay working with Apple, but I won’t name any names, just say that it is on the “home” side of Apple’s potentially burgeoning ecosystem.

    • Jerry Leichter

      You’re going a bit too far. Microsoft has pushed into a whole bunch of areas beyond Windows. They been willing to invest huge amounts of money on them for long periods of time. (Bing is probably the best example, but Xbox is certainly up there.) They just haven’t been good at at.

      Similarly, Intel has tried multiple times to move beyond the x86 line, from the 432, to the much bigger effort in Itanium, even to ARM for a while. Again, none of these efforts have paid off.

      It’s easy to say “oh, they just look at the world wrong”. But does it actually explain anything? Maybe Microsoft was limited by its “Windows everywhere” vision – but what should they have done instead? Try to imitate Apple? How would Intel have faired differently if they viewed themselves as a “CPU company”? Should they have run off after the CPU of the day? Become another ARM producer? Does the world need that?

      Strategies run their course. Technologies change, the world changes. No company lives forever. Both Microsoft and Intel had amazing runs – both with very broad visions. A computer on every desktop. Wow, did that ever sound crazy in 1990. If you’re going to say the Microsoft is failing because it sees itself as a Windows company, will you also criticize Apple for seeing itself as an iOS company? A hardware company? A company that only aims at the high end? Apple succeeds by focus. When you focus on the right things, you can do very well. If you follow some vague notion of breadth and non-focus like being “an operating system company”, you end up going nowhere.

      — Jerry

  • demodave

    “After anticipating, predicting and dedicating decades of work why didn’t Microsoft participate in its own vision?”

    I think there is a bit of a problem here with perceived dirty knees. Microsoft saw change as “messy”, and getting dirt on a pair of clean white pants was determined to be “bad”. Apple, continually acting as an “upstart” company (similar to start-up, but also decidedly different), has no fear of such “failure”. The iPhone or iPad is not fundamentally all that different than the Newton (or a Palm phone-cum-PDA). It’s just better timed based on technological capability and Zeitgeist.

    I’m so disappointed that I sold Apple shares after the 2005 split, but I feel better knowing that I still managed to buy back in at a maximum of $50, given the more recent split. Apple is a brightly colored dark horse. Arguably a rainbow-colored black swan, I suppose.

    • Sacto_Joe

      Upstart versus startup – I like it so much I may borrow it….

      • demodave

        My feelings won’t be hurt by that. 😉

  • blouwildebees

    The unwillingness, or perhaps more accurately, inability, to self-disrupt, is especially prevalent in highly regulated industries such as financial services, energy, telecoms, health care and, ultimately, government.

    • http://www.dosreis.de Daniel

      Agree. It creates a kind of non-neutral market and competitive environment through regulatory intervention (e.g. market structure in terms of players, erecting market entry barriers, price fixing) that protects the status quo and limits the pressure to adopt/change/transform/disrupt.

    • http://www.jlist.com Peter Payne

      Yes, remember when Apple killed it’s own then bestselling iPod mini with an iPod nano? No company ever does that. It was amazing.

    • Panos

      “…fundamentally the innovation process is chaotic. It’s very similar to the process of artistic creation….Nobody likes chaos but everybody wants innovation. Unfortunately they are concurrent things.”

      Unwillingness? Inability? or something else?
      Do you/we really want to live in a society that favors chaos over stability?
      And what about the losers? And who will take the responsibility to disrupt/innovate with public money?

      Is the role of a government to innovate/self-disrupt? or even to favor/support innovation in the society?

      Or is the innovator’s responsibility to prove it’s value in harsh environments?

      Even if it demands a patricide !!

    • http://www.magnumphotos.com/ Andre Friedmann

      Self-disruption is hard, even in less-regulated industries.
      FWIW, by 1975 the Dow component Eastman Kodak Company started inventing much of the intellectual property needed for digital photography. Rochester’s “Great Yellow Father” felt its profit formula in analog photography threatened, and refused to join digital’s trajectory.

    • David Gonzales

      The only monopolistic organizations actively trying every year to self-disrupt are movie studios and sports teams. Guess it pays to treat your “customers” as “fans.”

  • http://www.blenderking.com Dan Robbins

    Bill Gates was right – cellphones would emerge as the best music player (vs an iPod as referenced in this article)

    http://www.macobserver.com/tmo/article/Bill_Gates_Cell_Phones_Will_Overtake_MP3_Players_Calls_iPod_Unsustainable

    So yes, Microsoft had the right idea, but was married to the software “Start” button, hard keyboard, carrier control, OEM design, etc. They were so disconnected from what users wanted, just like the rest.

  • Walt French

    “After anticipating, predicting and dedicating decades of work why didn’t Microsoft participate in its own vision?”

    Methinks it’s not just profits, but customers, too. Maybe, customers first.

    Microsoft’s IT clientele—as close to actual end-user customers that they talk to—is heavily invested in a conservative, don’t-rock-the-boat worldview, thanks to their investments in systems based, by definition, in previous years’ tech. These are the organizations that try to avoid every obsolescence, every change in processes, every new networking approach that might be problematic.

    Apple is OK with first requiring a separate app to run older Airport devices, then not allowing the app to run on new OS’s. Apple is OK with network changes like discoveryd that can stop working after a couple days in a mixed network, letting it go a whole year.

    You don’t make omelettes without cracking a few eggs; I get that. Mostly, I’m loving the omelettes. But we shouldn’t laugh at those people whose job it is to make sure the wheels keep turning.

    Not TOO hard, anyway.

    • Fran_Kostella

      Coming in a bit late, but I think you’re on to something. My take is that they had to get Gates out of the picture because of the anti-trust issue (caused by pissing off Jim Clark) and replaced him with Balmer, who clearly wasn’t able to ride herd on the production of a massive software project like a Windows OS release. How many times did they mess that up under Balmer? Add in stack ranking on a huge number of super smart and ambitious people and you have a perfect storm for losing your way, or fiddling while Rome burns. Balmer seems like the right guy to ride herd on salesmen, but I can’t see him doing a good job with techs, much wilier than salespeople and more perverse.

      I wonder if Gates might have had another of those “the Internet is very important” moments where he changed the direction of the company?

  • Walt French

    There’s another aspect to the immunity to self-disruption: simple failure of imagination.

    Today’s claim chowder is a 2007 Bloomberg opinion piece that includes, “The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant.”

    This hapless writer had no profits at stake in the industry; he even went so far as to say the mobile industry needed a shake-up but that maybe some startup, clearly not Apple, would be the one to do it.

    There seems to be a contingent of people aghast at the idea that Apple will be the one dragging us into the 21st century. If that’s the reason, we’re left with the question of why so many pundits, whose currency is in seeing how the future is arriving, willingly turn a blind eye.

    Perhaps there’s something more fundamental than cannibalization, than profits. Perhaps it’s that Apple aims at a different level, and understands that even tho a mouse+menus is SLOWER than command-line or even command-key equivalents, people choose it for the lower mental conflict with performing the actual writing etc. (The same is true for the tradeoff between a physical keyboard and overall smaller screen: the BB model works great if you are optimizing for writing, which most of us do 5% of the time, versus reading, which we do 95% of the time.

    If this is true, Apple just realized there was a JTBD that was quite separate from those JTBDs that Microsoft and BlackBerry had tackled. And was willing to take a bold gamble that the JTBD was big enough to make it worth a major effort, a bold gamble that turns out to have been merely correct with the iPhone, and is inevitable (if only “eventually”) with wearables.