How Apple and Google Dominate
Posted by Umair Haque on March 12, 2008 11:14 AM
Last week, I promised to discuss another source of advantage in decay. We're going to zoom out instead, in response to a flurry of announcements from Apple, Google, and would-be competitors – to have a richer discussion in the weeks going forward.
It's funny how flatfooted - how almost inept - everyone else in media, marketing, consumer electronics, mobile, a long and dangerously growing list of industries, seems compared to Apple and Google.
What gives? Why is that everyone that Google and Apple decide to take to the cleaners, well, gets taken to the cleaners?
After all, Apple and Google are radically different companies. Who, it appears, have already divided the next-gen media pie very neatly between them. Google, software. Apple, hardware. Google, search. Apple, conduit. Google, algorithm. Apple, human. Google, geeky, self-effacing ad-quants. Apple, a reality distortion field wearing jeans and a turtleneck.
That's a product market level view - the view from the core. When we invert our traditional vision, and look at them from the edge, Google and Apple are strikingly similar: less like a power couple for whom opposites attract, and more like long-lost siblings.
Much of their DNA is - at least superficially - different. Jobs runs a totalitarian state with equal amounts of fear and love. Sergey and Larry tune - not manage - an organization poised forever on the edge of chaos and anarchy, while Eric Schmidt (who does sit on Apple's board) keeps the gears of the business grinding away.
But many of the most vital components of their DNA are strikingly similar, and that's where the lines between them begin to blur.
The ends they're working towards are similar: Goople aspires to - with laserlike intensity - change the world for the better. And where most of their competitors will sell out everything they believe in for a few bucks and a latte, Goople is deeply, radically purposive: they won't compromise much, if anything, to achieve the goal of changing the world for the better. (One can argue that Google's policy of following local content-filtering policies in China is a notable exception.) You'll never see an ad on Google's homepage, or a Mac that's not a joy to use, even if Bill Gates, Gordon Gekko, and Lucifer held a fire sale, and mortgaged the world to Goople.
And that DNA opens new paths to strategy and advantage. Goople finds value chains and industries in deep strategy decay - where innovation and choice are stale, and consumers are besieged by lameness - like marketing, consumer electronics, TV, and perhaps the most troubled of all, mobile and music. Then Goople utterly eviscerates them: it reconstructs radical new ones - where friction has been vaporized, where complexity and variety explode - and so everyone really is better off. When Steve Jobs makes the iPhone carrier-neutral, kiss the traditional mobile value chain goodbye.
On the flipside, where would-be competitors release a handful of predictable, often crippled products and services a few times a year - hi Nokia, bye Yahoo - Goople floods market space with radical new value propositions, overloading the very circuitry of the industry - still driven by fear of cannibalization - and so short-circuiting the traditional dynamics of competition.
Think the Macbook Air's a crippled, compromised pile of junk? If the early numbers are anything to go by, Apple listened hard enough to understand exactly those features road warriors really need and use, ditched the rest - letting it craft a radical new value proposition, just like that. Funny - that's exactly the story of Google Search, AdWords, and increasingly, Google ads across media; a story competitors just can't seem to get right.
Media isn't just "content" and "pipes". Media is the stuff that stitches together the fabric of production and consumption: it's how producers and consumers interact. So it's likely, that as newspapers, radio stations, and TV networks did yesterday, whoever holds sway over media tomorrow will enjoy supernormal profits for decades, and be able to shape and influence the course of the rest of the economy.
What will that influence look like?
The key components of DNA Google and Apple share let them overthrow yesterday's stale approaches to strategy and advantage, and pursue entirely new ones with a vengeance. Goople does exactly the opposite of what orthodox strategy counsels: it makes peace where there was war, conquers through love instead of hate, listens to instead of shouts at consumers, perhaps most critically, takes huge risks to make the world better instead of avoiding risk to make it worse.
Goople is rewriting the rules of a very stale game: industrial-era strategy itself, which is really the prime mover behind the gathering economic storm on the horizon – but that’s another post.
That was a dense post – so let's kick-start some discussion.
Do you see some of the differences between core and edge more clearly? Can you see some of the similarities between Apple and Google’s DNA? The way the global economy is going, which do you think makes more sense -- core strategy, or edge strategy? How do you think the rest of the media industry can respond to Goople?
Directing traffic: IBM has developed silicon switches that can be used to control the flow of data in on-chip optical networks. Each of the eight switches above is made of five ring-shaped resonators. The image was taken with an optical microscope.
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