Given the four modern technology driving forces outlined in Part 1, I will take this opportunity to study the approaches taken by each of the four titans to increase revenue and maintain high profit margins. Whenever one of these companies succeeds in garnering interest in a technology evolution, nearly every competitor and supplier stands to benefit.
Apple - A company with a well-recognized brand that began the personal computing revolution and continues to remain relevant over 30 years after it was founded. System engineering is Apple's specialty; although they are not necessarily the first to market or the original creators of the technology that they use, the implementation genius of Steve Wozniak and the testing rigor of Steve Jobs lives on in the very essence of the company. As a computer company, Apple found itself as a niche manufacturer, using software and industrial design to differentiate their hardware from other PC manufacturers.
There was a period of time (during the late 80s and early 90s) that the company attempted to compete at a larger scale with the PC, but once Steve Jobs returned to the company he set a course for the company to become an innovator in consumer computer products. The innovations in many cases are not advanced relative to the rest of the industry, but the focus on proper implementation and testing led to products that general consumers find simple and fun to use.
Apple adds value to their hardware by leveraging fashionable and practical industrial implementations, but the move from niche to mainstream in consumer electronics was achieved by distributing software to manage their simple yet elegant mobile computers, formally known as iTunes for Windows. Apple's investment in software engineering and development is anecdotal; iTunes is given away for free to sell more iPods, and the development cost of Mac OS X is a hardware tax. As popular a BSD Unix platform as Mac OS X has become for power users, to the dissatisfaction of many *nix users Mac OS X will not be sold devoid of hardware, because the only reason it exists to the extent that it does today is to sell more iPhones/iPods and Macs. No matter how much money Apple collects through iTunes sales, hardware sold at premium prices is what makes Apple one of the largest technology companies in the world.
Microsoft - The software doesn't necessarily have to be original or good as long as it works, is everywhere, and is open to all interested software developers and hardware vendors. Certainly Windows 7 has come a long way from Windows 1.0, but the key to Microsoft's success was OEM bundling of their operating system on nearly all IBM-compatible PCs. The software is proprietary, but Microsoft has the resources to make it work on anyone's hardware, and it was far cheaper (prior to Linux) for a PC manufacturer to add Windows to the BOM than try to design the software in-house. Apple must sell their hardware at a premium or sell more hardware that re-uses the software they devote a large amount of engineering resources to, but a PC manufacturer takes on substantially less risk by adopting another company's highly available platform.
Microsoft is the only company that every computer user has most likely directly or indirectly purchased software from, and is one of only a few consumer software companies that can charge several hundreds of dollars for a license. To replicate its success in areas outside of Windows and Office, Microsoft has attempted to grow into online services and consumer devices. Initially, these investments were made with the primary purpose of selling more copies of Windows and to keep users in the Microsoft ecosystem, but more recently the company has returned to its roots by focusing on ways to charge the Microsoft tax on consumer devices by regaining control of the hardware platform. Microsoft's gains in the PC-era were thanks to a hardware platform defined by IBM and Intel that many manufacturers adopted. By creating a gaming platform, Microsoft was able to leverage its success with DirectX on Windows to sell games specifically made for the Xbox, each garnering a Microsoft tax. The Xbox 360 has also become a development platform that has led the way to improved user interfaces, performance and efficiency, and innovations such as Kinect.
Microsoft's latest push is in mobile with Windows Phone 7. Windows Mobile became too fragmented, which to Microsoft means too much time spent engineering their operating system for different hardware and less time focused on user experience and speed. The Zune allowed Microsoft to focus on a high-end platform for media consumption and mobile gaming. Windows Phone 7 is a culmination of Windows Mobile, Zune, and Sidekick; by setting the SOC to Snapdragon, Microsoft can focus on innovating on software while selling the OS via third-party hardware sales. As long as Microsoft can continue to draw attention to their software efforts and collect money directly from most businesses and indirectly from most consumers, Microsoft will continue to be a dominant technology player.
Amazon.com - The pinnacle of direct sales, the website that began with a dial-up accessible book order site now sells everything from toilet paper to food and televisions that are delivered straight to your door overnight if you so choose. The company is still a teenager yet has sold millions of Kindle e-readers, a hardware platform designed by Amazon.com with the sole intent of selling e-books. In fact, e-book sales have now surpassed both paperbook and hardcover sales, accounting for over 40% of book sales on Amazon.com. Apple has just entered the e-book market following the introduction of the iPad last year, but the price of the iPad and its tablet design makes it more difficult for Apple to compete. Even though Barnes and Noble and other brick-and-mortar stores have been selling Sony's e-reader product for years before Amazon.com started selling the Kindle, their success has been so limited that all of Amazon's peers started making their own e-reader devices to compete.
Hardware is only one area that Amazon.com has been successful at using to sell more goods. Their website is a popular destination for social networking and product research, and their intelligent product search and recommendation algorithms leads to more sales. The marketplace is open to competitors and allows small and large resellers to sell used and new items, all grouped under the respective product listing. The company has also been successful at providing other retailers (such as Target and Toys 'R Us) an online presence using a similar site layout and leveraging Amazon's search algorithm and order processing. Amazon.com is also a leading cloud computing provider, providing APIs for storage and processing that can help all businesses small or large.
Unlike Apple and Microsoft, who leverage their ecosystems to sell hardware and software, respectively, Amazon.com does not limit platform support to their own devices. The Kindle software application is available for iOS, Android, and WebOS, they use the universal mp3 format for music, and they make their movies and TV shows available online (using Flash) and offline on devices compatible with Microsoft's DRM. Amazon.com on-demand movies and TV shows are also available for TVs and the Roku. By proliferating their services and products to almost all Internet-connected devices, Amazon.com can sell you goods and services no matter where you are on Earth. (No Internet connection, no problem! Kindle came with free 3G in the U.S. from the get-go.)
Google.com - "Don't Be Evil", the mantra of a company who's goal is to connect you to the rest of the world (with ads). What began as a PhD research project at Stanford became the brand most people associate with Internet search as Kleenix is to tissues. Google was just a site crawler with an intelligent search algorithm on the back-end, with a simple text front-end that remains mostly intact today.
Google is much more than a text search page in 2011. While the majority of Google's revenue still comes from keyword advertisements on top of Google sites and many third-party websites, the company is trying to grow into video and image advertisements through acquisitions of Youtube and Doubleclick, respectively. Google acquired Keyhole in 2004 for their global map satellite presence, on which they've fostered the most popular location service, Google Maps. Subsequently, Google purchased Android in 2005, which is quickly becoming the defacto mobile operating system akin to Microsoft Windows in the 90s. Following the purchase of AdMob in 2009, Google can add mobile application advertising to the list of marketing services it provides, giving it access to iOS and WebOS users along with Android.
To Google, the more time someone spends using its services and software, the more opportunities the company has to display an advertisement, whether it be text, image, or video. The information system that is Google also provides for analytics and, more importantly, targeted advertising. It is to the company's advantage to provide services and software for free in exchange for the user's attention, and as with any marketing company, the more positive the experience, the more likely the user will continue using the company's services and pay attention to advertisements.
Google contributes a lot to open-source, and funds many independent software projects of its own and throughout the world. Apple has and give-and-take relationship with open-source, but Google tends to give more than take, helping the technology industry evolve quickly. Google's APIs tend to be open to any software, but Android has changed the company's focus to developing software for its mobile platform only. This is a safe gamble since Android is quickly proliferating to tens if not hundreds of mobile devices, but that is contrary to their vision of being everywhere. Ultimately, Google will be where they want to be with Android because of the amount of information that passes through a mobile device and will achieve their goal of being everywhere the user is.
Wrap-Up - Each of the four technology titans bases its business on a single driving force (hardware, software, direct sales, advertising), but modern computing is converging at a fast rate, resulting in more competition and technical evolution. Other technology companies aspire to be like Apple, Microsoft, Amazon, and Google, but the lack of focus on a single driving force has caused them be second-tier. Despite this, there is still a lot of room in the industry for companies to grow and compete, and the leaders of each force will change based on who can garner the popular attention, but ultimately technology prevails. Now if only we can gain full control of our planet and start exploring other planets for minerals and facility...