Scotch Blend

This post is in response to The Apple Killer? on Calculated Exuberance.

So it seems like with the introduction of Chrome, Google’s going for the jugular in the war against that other tech firm that controls your life. By decoupling the web-user's online experience from the OS, pretty soon you'll be able to do just fine with a copy of Chrome strapped onto a barebones Linux OS. Why would you ever want to shell out cash for a bloated Windows system? And why would Macs still even be in the picture?

Well, there is a reason why Macs are still around and doing better than ever. After being thoroughly crushed by Microsoft in the '90s, Apple used a neat trick to bounce back that differentiated its products from competitors, sent profit margins soaring, and virtually inoculated it from future market share erosion: building a brand based on image. Both consumers and Wall Street approved. In a highly competitive, commoditized market, Apple found a way to thrive (or at least survive) by promoting something as intangible and unassailable as coolness/hipsterishness rather than pure performance, price, etc. Of course, that didn't quite top Microsoft's even niftier trick—establishing a monopoly—but it helps explain why destitute college students who fret about their college loans continue to empty their bank accounts (or take out more loans) for outlandishly overpriced MacBook Pros. In the end, Mac-lovers, like religious fundamentalists, base their devotion on something far beyond the realms of reason and basic economics.

Microsoft’s story, on the other hand, is a bit different. In fact, it’s the opposite. Microsoft has to force itself onto users rather than reeling them in with glitz and glamour like Apple. The Microsoft brand is practically a liability, especially the brand of their latest OS, and the company is soberly aware of this as evidenced by their recent Mojave Experiment ad campaign. While users continue to flock to pricey Macs, Microsoft’s iron grip on the world is slowly being pried loose—first by international lawsuits, and then by the introduction of pre-installed Linux PCs. True, specialists may still prefer a powerful OS that can support complex computer-based software, but the vast majority of users just want something simple to get online, check email, and watch that guy dancing on YouTube.

Maybe the time isn’t quite right for Google to flush out Microsoft for good—online apps are still primitive, Microsoft’s monopoly is still very real, and most people still cling to an “If it ain’t broke…” mentality. But it’s nice to see Google make a move and become the change it wishes to see in the tech world (my sincerest apologies to Gandhi). Plus, Google’s not doing too shabby with this whole brand thing either, which is always a nice piece of extra leverage.

In conclusion, Google: buy; Microsoft: sell; Apple: hold.