When Deloitte Global looked at what devices millennials prefer to use, its survey found that they spend most of their time on smartphones, but PCs are where they do their work; tablets only get occasional use (full survey here). When it comes to getting things done, they prefer a PC and browser over anything else. This is a far cry from the “PC is Dead” mantra we’ve been hearing for some time.
You can read the survey results yourself. For right now, let’s talk about why Apple’s success with the iPod and iPhone didn’t lead to another digital revolution with the iPad, which was the device that caused all this false uproar.
The iPod Success
What made the iPod a success over all of the other MP3 players was that Apple was the only vendor that really didn’t care about DRM (digital rights management) and instead focused on ease of use. Sony, which had dominated with the Walkman, had acquired a lot of content and was so concerned about content theft that it locked up its MP3 player with DRM, making it impossible to rip music. Microsoft’s Play for Sure platform didn’t play for sure and was too difficult to use reliably. So by focusing like a laser on what people were going to do anyway, rip CDs, and making it easy, the iPod fueled what was Apple’s impressive turnaround.
Microsoft had a strategy to displace the iPod by coming up with a product that was more robust and technology to easily migrate playlists and songs between the two devices. It didn’t execute and exited the market. It was soooo close.
The iPhone Success
Realizing that in a smartphone, music could be a feature that could cannibalize the iPod, Steve Jobs moved aggressively to cannibalize it himself. The first iPhone was basically an iPod with phone capability and it caused the demise of the iPod, eventually, once he got it to work as a viable phone. The formula was to take something that was successful, add one key feature that defined an adjacent market, and then move to dominate that market. And given that the cell phone market was vastly larger than the MP3 market, by combining the two, Jobs drove the firm to even greater heights.
The iPad was basically a larger iPod Touch, so it looked like the same kind of thing that Apple had done to smartphones, which is add a feature and then go after an adjacent market: in this case, PCs. But the problems were three-fold with this move. First, the iPod had been weakened by the iPhone, making it a far weaker launch platform; Apple didn’t want to cannibalize its PCs so never allowed it to fully embrace what the MacOS did; and the product didn’t do telephony so Apple couldn’t cannibalize its smartphone position, which was far stronger. So rather than repeating the iPhone success, it effectively launched an additional product and once again showcased that people generally don’t like to carry three devices. The iPad did make a nice consumption product but, given that most mobile games were on smartphones and games drove performance, after consumers bought one tablet, most tended to stop buying. Then smartphones started to grow to phablet sizes and instead of the iPad taking over for the smartphone, we got a reverse revolution: The smartphone started to displace the tablet, and PCs were pretty much left alone.
Microsoft did have a better idea with Continuum, which was to do what Apple should have done: embrace the PC with the smartphone. Several smartphones sort of provide this function today. However, because Intel was never able to be successful with smartphones, or get into a Microsoft phone, and Microsoft never was competitive with mobile apps, the result hasn’t risen to its potential. The HP Elite X3 is the closest to this ideal in market but because it uses an ARM processor, its Windows capability is very limited and HP Inc. rightly targets this at a business market where it does have some potential. Rumors said a Dell product running an Intel processor was in the works but allegedly has been cancelled, but the issue would still be mobile apps and whether the phone could also embrace the Android marketplace (something that the Kindle does, but not perfectly, largely by forking Android). But emulators are possible, Android apps tend to be written to run on older phones, and Microsoft has allegedly been working on this since 2014.
The best strategy might be to wait until Google is hit by an anti-trust action out of the UK before launching this feature, and then use that as a lever to help assure not only that apps will initially work but that Google won’t work to break compatibility once it is in place. Currently, Google, like Microsoft unsuccessfully did in the 1990s, is fighting the EU charges.
Wrapping Up: Microsoft Is So Close
The recipe for success that the iPhone showcased was to embrace and then cannibalize a market where Apple was both dominant and successful. The iPad needed to cannibalize the iPhone and the Mac, but it didn’t do either, even though that was the initial promise. That promise did hurt the PC market but because of consumers’ unwillingness to carry three devices, particularly when, as smartphones increased in size, they could actually better cannibalize tablets, a reverse trend emerged. Now the bigger risk is that smartphones eventually cannibalize PCs. Microsoft has the best elements of a plan in place but it still needs to execute. The elements of success are Windows phones that can run a full selection of Windows and Android apps, and this may hinge on what the EU eventually does to Google.
For now, the PC isn’t going anyplace, largely because it appears that no one, including Apple, is yet willing to put all of the elements together to dislodge it. But Microsoft is again soooo close.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+