Our Senior Readers have forged through Liebowitz and Margolis’s Winners, Losers, and Microsoft, so terms like “increasing returns,” “network effects,” “serial monopoly,” and “lock in” are now rolling off their tongues. I am very impressed with how the group has embraced the book and how fluid the discussions have been. I will count this one as a winner.
So, as a follow up, we have an absolutely remarkable data point from Business Insider (via Mark Perry) that the iPhone is now bigger than Microsoft. (See here for background to the big pies).
The iPhone.
Bigger than Microsoft.
That is remarkable.
Microsoft just plain missed these markets (iPhone and iPad). And Apple created them. And it turns out that, at least for now, they are much more valuable and lucrative markets than the ones Microsoft dominated.
The other mistake Microsoft made, one that ultimately could be far more devastating, is that it became obsessed with the wrong competitor.
For the past decade, Microsoft has obsessively targeted Google as Enemy No. 1, blowing more than $10 billion trying to compete with Google’s amazing search engine.
Plenty to chew on here.
One observation: This does not seem to be Bertrand or Cournot competition, does it?