Microsoft and Apple’s Diverging Bets on Their Future

As I watched the live video from the Microsoft device launch event earlier in the week, I could not help but be struck by the incredible divergence of OS strategies Apple and Microsoft have as they try and push their respective platforms into the market. Microsoft has clearly put all bets on Windows and, through Continuum, it now makes it possible for all of their devices to work together better and deliver across-the-board productivity to devices and services for potential users. As we found out multiple times during the Microsoft event, the primary focus of their strategy revolves around productivity.

On the other hand, Apple is always trying to make Mac OS X better and it seems the MacBook Pro, Mac Pro and perhaps even some MacBook Airs continue to gain ground in the enterprise and are moving upstream in terms of a solution for business power users. But if you look closer at recent Apple announcements and product introductions, Apple clearly seems to be placing more and more of their bets on iOS. We already know iOS is a great consumer operating system but, with the introduction of the iPad Pro, Apple is making an important statement about taking iOS well beyond the consumer market and positioning it as the everyday device for mainstream business users. And even though Apple now stresses productivity, it really pushes the “fun” and “creative” aspect of their apps to hook more people to their ecosystem.

At Apple’s recent event, Tim Cook stated an iPad Pro could do about 80% of what a PC could but is much more versatile. Like Microsoft, they have their own cross-device software called Continuity. They take this a bit further by making it work with two different operating systems even if they are based on the same root code. The iPad Pro may be thought of as something targeted at the Surface Pro and in many ways it is. But the use of iOS in the iPad Pro and how Apple will take this more consumer-focused OS into mainstream business is really where Microsoft and Apple diverge. More importantly, Apple appears to be betting the company on iOS being its OS for consumers and business and seems well positioned to take advantage of an iOS ecosystem of 1.5 million apps to support that position.

To date, Microsoft’s revenues for Surface Pro have been about $6.7 billion, which probably translates to about 8-10 million sold since release. It will not surprise me if Apple sells as many or perhaps a bit more iPad Pros during its first 12 months on the market. And the big thing that will help them create strong demand will be the app ecosystem that comes from the App Store. Apple even hedged their bets by working with IBM to port over 100 enterprise class mobile apps for iOS, thus bulking up their overall business app offerings. Even Microsoft has given Apple a boost in their quest to make iOS more attractive to a business and productivity audience by creating a full, and by the way, great version of Microsoft Office for iOS. I am not sure Microsoft would have done this if they had realized Apple would go after their core business customers with iOS. As I have written before, I believe Apple will eventually do an ultra thin laptop powered by iOS that would go after Microsoft’s new Surface Book, although I doubt it will be detachable.

I am very impressed with the new Surface Pro 4 and their stellar new Surface Book but it looks to me like Apple and Microsoft are now going after the same business customer but with very different operating systems. At the moment, Apple probably has the edge because of the iOS app ecosystem although, to be fair, most of the productivity apps needed for use in business already exist. But make no mistake, we have a new battle royale going on. Instead of the Mac vs Windows fight of the past, it is now iOS vs Windows that is becoming the new battlefront.

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Tim Bajarin

Tim Bajarin is the President of Creative Strategies, Inc. He is recognized as one of the leading industry consultants, analysts and futurists covering the field of personal computers and consumer technology. Mr. Bajarin has been with Creative Strategies since 1981 and has served as a consultant to most of the leading hardware and software vendors in the industry including IBM, Apple, Xerox, Compaq, Dell, AT&T, Microsoft, Polaroid, Lotus, Epson, Toshiba and numerous others.

6 thoughts on “Microsoft and Apple’s Diverging Bets on Their Future”

  1. I think that it is very important to make a clear distinction between Windows desktop and UWP (Windows Universal Platform/WinRT/Windows touch apps). At this point in time, UWP does not have good productivity apps, and they lag behind both iOS and even Android. Also without UWP apps, Continuum doesn’t work.

    Microsoft’s strategy is indeed much better than it was a while ago. However, without good adoption of UWP, it is still a pipe dream. And the new Surface devices don’t particularly push UWP because they also run Windows desktop.

    I think the next year will be the one to watch. Can Microsoft move its whole productivity suite to UWP with feature parity? Can it persuade other developers to follow? How will UWP run the legacy apps that hobble corporate IT (virtualisation maybe)?

    I am reminded of how Apple got developers to move to Cocoa. First the had Classic which was basically OS-9 running inside OS X, much like how desktop Windows and UWP coexist today. Then they had Carbon, which allowed OS-9 apps to run directly on OS X. Will UWP do this or something similar? Do they need to?

    This will be fascinating to watch.

    1. I think the new product announcement from MSFT was a very successful one. For the first time I am impressed with the products. Having said that and also after observing what GOOG is also doing in the PC arena it makes me wonder: Apple is being valued at 13 times P/E as it is consider a consumer goods company while both MSFT and GOOG are valued around 30. Seeing MSFT and GOOG aspiring to be in the consumer goods space, Do they aspire to be valued at 13 times earnings?

      1. It was successful in terms of generating a lot of buzz and hype, that’s for sure. Whether it achieves the same success in the marketplace remains to be seen. I remember when WP was first announced a few years ago, it generated a lot of buzz but it has achieved at best, 3% to 4% share of smartphones. So, we’ll see.

    2. This, to me, is exactly what their strategy is.Are they betting on UWP, but keeping desktop for the transition period?”

      This, to me, is exactly what their strategy is.

      1. Apple, in the early 2000s clearly said that the Classic Mac OS was not going to be supported long term, and that Carbon/Cocoa was the future. Even then, the largest DTP software vendor Quark, dragged its feet.

        I don’t know the Windows APIs, but I imagine that moving from desktop Windows to UWP will be harder than Classic to Carbon was.

        I think Microsoft has two challenges for next year. It has to communicate that UWP is the future and their legacy desktop OS is on its way out. It also has to work harder on the technical side to ease the transition. It has to work hard to escape the catch-22.

        Which also reminds me of the Bondi Blue iMac. Like the new Surface devices, it brought back excitement to the Mac platform, even though it did not provide a direct answer to the legacy OS problem. Likewise the Surface brings back excitement to Windows although it doesn’t solve their problems on mobile. The iMac may be the best way to understand the new Surface in the context of how Microsoft could be saved.

  2. Strikes me that MS’s approach treats desktop, laptop, tablet and phone more equitably. That is, as computers. The single code base is a big deal, as long as the “Apps” don’t dumb down the “Applications”.

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