History repeats itself. What Volkswagen can learn from Microsoft’s fail on the smartphone market.
Microsoft's historical loss
There is an interesting interview with Microsoft founder Bill Gates, where he reveals how he really thinks about losing the competition on the smartphone market. Being the most dominant OS vendor for desktop and laptop PCs, I guess that everybody would have expected, Microsoft is also going to dominate the smartphone OS market. But reality is, that Windows Phone & OS is history. Microsoft failed hard. A couple of times.
“Microsoft should have been Apple's challenger in mobile”
says Bill Gates. “In the software world, particularly for platforms, these are winner-take-all markets" Gates told in an interview.
Even though Microsoft has launched Windows Mobile in 2003, years before Google and Apple started their mobile operating systems, it couldn’t manage to gain significant market share.
"It really is winner take all," he said. "If you're there with half as many apps or 90% as many apps, you're on your way to complete doom. There's room for exactly one non-Apple operating system and what's that worth? $400 billion that would be transferred from company G to company M", according to Bill Gates.
When it comes to mobile devices, I remember a video from 2007 where Steve Ballmer, CEO of Microsoft said:
“500 Dollars? Fully subsidized with a plan? I said: Man, that is the most expensive phone in the world, and it doesn’t appeal to business customers, because it doesn’t have a keyboard, which makes it not a very good email machine.?
When the "big guy" underestimates the "small guy"
In my experience, history repeats itself. And in this case, this can be very dangerous for Volkswagen.
I just recently saw a video from Volkswagen CEO Matthias Müller saying:
“...there are companies that sell 80,000 cars a year with difficulty - Volkswagen sells 11 million a year - then there are companies like Volkswagen, they make a profit of 13-14 billion euros per year, and if I am correctly informed, Tesla destroys a three-digit million sum per quarter…”
Pretty similar to the case of Microsoft, the “big guy” Volkswagen is underestimating the “smaller guy” Tesla.
Be aware of true innovation
One thing I know for sure, if a product has a vision and the whole business model innovation is a game changer, like the App Store for iOS or Tesla’s battery technology, the pricing of the product or the initial sales numbers are secondary. I would definitely never underestimate this kind of competition.
Let’s see, if history repeats itself this time.
#innovation
Time Magazine Person of the Year 2006
5 年Are we talking about the same company?? Microsoft market cap: < $1 trillion Apple market cap: > $900 billion Comparing it to VW makes imho no sense at all. You can build a smartphone from scratch in Shenzhen in some 30 days. Try to do the same with a car!
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5 年As we all did laugh about the Chinese copying everything... ??