Tech blog

Tech blog

A reversal of fortune

The buzz around the post-PC era is one of those rare hypes, which is seeing the light of the day. The computing world is, indeed, in the middle of a dramatic shift from bulky offline PCs to a myriad of always-on nimble devices. If you are looking for evidence to singularly demonstrate this shift, here it is.

Blogger M G Siegler has drawn attention to the growing gap in the performance of Microsoft and Apple, which represent the two ends of the shift. As he points out, Apple's iphone business alone was larger than all Microsoft businesses put together in the December quarter.

Different Microsoft units, from software to gaming, together pulled in $21 billion in revenue. Apple’s iPhone business alone generated $24.4 billion. Analyst Hentry Blodget estimates that Apple may have made $9.3 billion in profit in that quarter from iPhones. The profit of the whole of Microsoft was only $8.2 billion.

Apple’s total revenue ($46 billion) and total profit ($17 billion) was more than double of Microsoft’s total revenue ($21 billion) and profit ($8 billion).

Ironically, as Blodget points put about 15 years ago Microsoft was deemed too powerful and monopolistic to be left in tact. The US government had launched a massive anti-trust trial to try to break it up into less threatening businesses. In contrast, Apple had begun a precarious pull back from near death. 

Apple’s come back effort luckily coincided with the emergence of Internet as a force with the potential to push the world to the post-PC era.  Riding on the wave Apple went on to invent new product categories, which further fast-tracked the shift to the post-PC world.

The situation of Microsoft was a polar opposite. With huge stakes in the PC era, it was instinctively wired to be wary of the Internet than see it as an opportunity. The anti-trust trial further distracted the management at a crucial time. Blodget says Microsoft has also been obsessed with a wrong competitor: Google.