Google, Amazon and Microsoft Prepare to Battle Apple

Authors: Jim Lundy, Mike Anderson
Date: September 28, 2012
Topics: Mobile, Tablets
Research Note Number: 2012-37

Issues: What are the best practices for harnessing the power of mobile computing?

What are the trends impacting mobile computing?

Summary: After more than two years of record sales for the Apple iPad, Amazon, Google and Microsoft are preparing new tablet and related offerings that they hope will take share from Apple. The iPad ushered in a new era of end-user computing marked by surging demand from consumers, business and education. The strength of each vendor’s mobile ecosystem will help determine the victors.

In just 24 months, we have moved from the 30-year PC era to a new tablet era, and tablets are already moving beyond traditional laptop or desktop roles. Many vendors tried to overcome Apple’s dominant iPad in 2010 and 2011, but none were successful, due largely to their inability to deliver comprehensive mobile ecosystems for their platforms. This note discusses the new tablet war that is about to take place.

The tablet war is largely being waged among the mobile ecosystem providers.  Today those vendors include Amazon, Apple, Google and Microsoft. There are strategic shifts occurring as well; for example, Research In Motion (RIM) has gone from being a leader to being a troubled vendor that is exploring a possible sale of part or all of the company.

Many devices use the existing mobile ecosystems, but most manufacturers have pulled back and are waiting to see which one can be most successfully leveraged. As a result, competitive efforts within the mobile domain continue to focus on the ecosystems.

Competing with a mobile ecosystem requires a focus on five essential elements:

  • Multi-device operating system (MDOS)
  • Microapps (‘apps’)
  • App stores
  • Content and content stores
  • Platform

Mobile technology is young, and changes are coming fast. Not all ecosystem components have to be controlled by the ecosystem vendor, but the rules are tightening. Both Microsoft and Google have recognized the need for tighter integration between their OS and the devices that run it, and are bringing their own hardware to market. Form factor demands are also changing.

The success of the smaller tablet is putting pressure on Apple, and we expect successful ecosystems to support multiple form factors or see erosion of their influence. Amazon, although dependent on Android for its OS, has taken steps in both its content and device strategy to shore up its ecosystem. Amazon is strengthening its music service, and expanding the reach of its video-on-demand service. Having a phone to complement the tablet is a key ingredient, so Amazon will likely bring its own phone into the competition.

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