The iPhone 5 vs. Windows 8

Posted by Rob Enderle

Comparing the iPhone and Windows 8 may seem somewhat odd. Nevertheless, it aptly showcases the vastly different strategies employed by Microsoft and Apple when it comes to promoting a flagship product.

For example, Apple seems to have intentionally limited the iPhone 5's evolution. Indeed, Cupertino likely believes that a radically different design and UI could theoretically push consumers to competing platforms.

iPhone 5 vs. Windows 8In contrast, Microsoft is making a massive and very innovative change with Windows 8 (including introducing their own Surface hardware) to stop what has been massive erosion by Apple and Android of its install base.   

The strategies have some contrasting side effects. To be sure, Apple’s iPhone 5 launch was seen as boring and lacking innovation. Meanwhile, Microsoft is being forced to deal with those who dislike the changes and question Redmond's direction.

Interestingly, analysts commenting on both industry heavyweights often cite either the lack of innovation or too much change when forecast respective decline. Then again, Apple is still selling out of its iPhones, while much of Microsoft’s business is now heavily tied to back office software, services, and long term contracts - rather than desktop revenue alone. But let’s talk about the problem this week.

We Like the Excitement but Not the Reality of Change

We love the drama and excitement of a new product, but hate the hassle of change or learning something new. Of course, there are exceptions to this rule, such as when Apple launched its flagship iPad which people flocked to because they saw it as something new, different, and yes, easy to learn. 

Of course, Apple also experienced the downside of all this when it initially brought out OS-X, prompting long-time fans to defer purchase of the new OS. Meanwhile, Microsoft debuted Windows 95 and folks got excited about the differences but were quickly singing a different tune when they were actually forced to experience them.

Similarly, the Windows Phone 7 product was both different and light years ahead of Windows Phone 6, yet buyers seemed to run screaming from that change as well. As you may recall, Microsoft has traditionally experienced more issues with change than Apple, but both companies have been frequently criticized for not innovating enough and for implementing too many changes too quickly. 

The long term problem? While a product may initially excite us with a change it becomes increasingly difficult for a vendor to significantly update the product - without turning change into a negative feature that locks customers down with the prior offering. To be sure, Microsoft has faced the problem of competing with old versions of their own software  for years as customers locked down on one version of Windows/Office and refused to upgrade.  

Lock In Vs. Competition

Once a customer is locked into a vendor, the vendor can moderate change. However, this process slows advancement significantly and can leave the vendor open to a competitor coming in from the outside - much like both Google and Apple did to Microsoft with Android and iOS.  And I think you could argue that the iPhone, which has a very solid lock on its users, is now falling significantly behind competitors.   

Wrapping Up: Bifurcation

I think the problem with both approaches is that vendors often believe they are mutually exclusive.  They’re not. With multiple lines you can create products that effectively chases new technology  - like the iPad initially did - and sell them alongside products that are more staid like Macs. 

Think about it - the iPad was on the cutting edge when it launched, while the Mac is more of a legacy product.  Essentially, Macs held their ground while iPads significantly expanded Apple’s market. So why can't a company market two phone lines: one that pushes the envelope and another which slowly implements change?  Or who says the Samsung Galaxy III S, a technology leading phone, and the lagging  iPhone 5 couldn’t (theoretically) originate  from the same vendor - much like the Chevy Volt (technology leading) and Chevy Impala (lagging) are manufactured by the same car vendor?

For Microsoft, it likely showcases why a major portion of their install base will stay with Windows 7 for years after Windows 8 ships. Clearly, we aren’t a "one size fits all" market. While small vendors can focus on a niche, largre vendors who forget this rule often sees most of their market shift to products that better meet their unique needs or don’t scare them as often.