Apple VS Microsoft

In the last few weeks, the tech industry's biggest players have shown off their newest software and hardware, all aiming to make big moves before the end of the year. Apple has iOS 6 and the new MacBook Pros, Microsoft unveiled the new Surface and is preparing Windows 8 for launch.

It should be much more exciting than last year. What did 2011 have? A spec bump on the iPhone and iPad, a slow warming to the Windows Phone ecosystem, and the lackluster launches of a social network and (failed) desktop platform by Google. By comparison, 2012 should be a battle royale.
Everything old is new again in technology. Apple arguably created the PC market with easy-to-use interfaces that made Microsoft's MS-DOS operating system look unnecessarily difficult. But everybody knows that it was only a matter of time before Microsoft out-maneuvered almost everybody and became the dominant force in PCs, nearly crushing Apple in the process.

Then about a decade ago it all started to change again. Leveraging the success of the iPod, Apple ultimately introduced the iPhone and iPad and in so doing significantly shifted the market once again, and left some asking if there was any need for a PC anymore. This put Microsoft in the unfamiliar position of being not only back on its heels, but perhaps not even relevant anymore - the bully from Redmond was seeing its once captive customers migrating to platforms where Windows not only didn't dominate, but could barely compete.

With the recently announced release of the Microsoft Surface tablet, it is worth asking whether or not Microsoft is riding Apple's coattails, or whether this is a case of the empire striking back and showing that it can adapt to what the market has clearly said it wants.

-Apple

Big changes are afoot this year: a truly new iPhone is expected, sure, but June's announcements already telegraphed their intentions: a return to the high end, and freezing out Google.

After aggressively pricing almost all their hardware via partnerships and ruthless negotiation with manufacturers, Apple has managed to push its products down from luxury to the mainstream. The iPhone is now considered a standard device, and the MacBook Air, once incredibly overpriced, is now setting the bar for PC laptops.

This has given Apple the market share to start selling extremely expensive things again, starting with the Retina MacBook Pro. Soon there will likely be a 13-inch version as well, and they will both sell like hotcakes — even at around $2,000 per unit. The cheapest new iPhone will probably still cost $200 to consumers, but only because Verizon and AT&T will have no choice but to subsidize it.

iOS 6 is on its way as well, and it's evident that Apple is using its mobile platform as both carrot and stick. Facebook, Twitter, Yelp, and more are getting the red carpet treatment, integrated right into the OS. But Google is getting the cold shoulder as Apple moves to its own maps and tries to get users to ask Siri instead of Google.

What could go wrong? If Google's Android OS was more mature and more evenly upgraded (that is, less "fragmented"), it could pose a threat to Apple's near-monopoly in the hugely profitable paid-apps ecosystem. And Apple is still lagging behind in cloud services, losing out on many fronts — including file sharing and storage, streaming media, email and Web apps — to Google, Microsoft, and smaller companies. Apple can only keep you attached to their services if those services are competitive, and the competition is moving faster than they are. And be honest: iOS and OS X are both starting to look a bit old.

-Microsoft

The year 2012 will be looked on as a watershed moment in the company's history: Windows 8 is the biggest change ever made to the world's most popular OS, and opinions are in no way unanimous on the new look and feel. But Microsoft hopes to build on their success in the living room and make Windows and Xbox an ecosystem families and friends can live in, not just a set of isolated products.

The Surface tablet is Microsoft's way of telling the world that it's ready to move on from the desktops and laptops that put the company where it is today. And Windows Phone 8 is Microsoft learning from its mobile OS mistakes and saying "this time for real." The next Xbox isn't ready, but you'd better believe it's being conceived as the third piece in this puzzle.

Connecting the TV, PC and mobile (the so-called "three screens" strategy) has ever been a hope of Microsoft's, but it's not until now that the company's had the presence on the TV, the credibility on mobile, and the audacity to actually change what constitutes a PC. This year and the next will be a crucible for the company as it is forced to abandon traditions and partners, but if it's going to remain a force in consumer tech, these are necessary steps.


Plenty could go awry, though, and if one piece fails, the others are weakened. Windows 8 could fail to gain traction as a replacement for Windows 7, to which many millions of people and companies have only recently switched. Leaving behind 10 or 20 years of applications and hardware isn't something small businesses and casual computer users are likely to do.

Similarly, Windows Phone 8 will have a lot to prove when it debuts, first because the platform may have lost the support of many early adopters by not fully upgrading devices currently running Windows Phone 7 and 7.5, and second because Microsoft may simply not have the superstar hardware that will be needed to take consumers' eyes off the next iPhone.