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The Great Tech War Of 2012

118 points by ssclafani 15y ago

fleitz 15y ago
And while these 4 duke it out a new competitor will emerge and change the game completely.
- bergie 15y ago
  It looks like Microsoft is trying hard to pivot and be that competitor
- revorad 15y ago
  And that's the reason, reading story after story about the big 4 on HN is getting so boring to me. No doubt they make amazing products, but these are giant corporations now. Siri, G+, Timeline, Kindle Fire are all fascinating products, but they don't excite me nearly as much as a simple app made by a fledgling two person startup.
  - Apocryphon 15y ago
    I'm not even sure if characterizing this is a four horse race is accurate. The article acknowledges the existence of other giants such as Microsoft and HP, but state they are behind the times and struggling to catch up. But are there any other rising powerhouses out there besides the four horsemen? eBay?
algorithms 15y ago
Guess the launch of Android 4.0 in two days will show us where we're going. It basically decides the future for 3 major products: Smartphones Tablets Google TV (this could be a LARGE market if they find the right partners) Add to that the fact that big G will probably try to push Google+ even further with this new generation and this makes the event more important than any previous Google Keynote.
mikeryan 15y ago
I'm I the only one who doesn't place Facebook in the class as Amazon/Google/Apple? Maybe, someday, but not quite yet.
- johnyzee 15y ago
  Agreed. For all the hype, pre-IPO valuation and talent draining, Facebook has done surprisingly little worthy of attention for several years now.
  - brandnewlow 15y ago
    They have detailed personal information on 700m+ people. How is that not "worthy of attention"?
    - redthrowaway 15y ago
      They haven't figured out how to use it to make anywhere near the kind of money that would justify their valuation, and any attempts to exploit it in any meaningful and profitable manner would likely be met with a huge backlash.
  - Silhouette 15y ago
    For all the hype etc, I'm not sure how much any of these companies have really done that is worthy of positive attention for several years now. They obviously have a few big hits, but they all have at least as many failures and/or obvious competitive weaknesses. Apple have no doubt moved or effectively created entire markets and business models over the years. The iPod, iPhone and iPad have changed consumption patterns for a generation, and iTunes is right there in the background. But how much of the future is down to inertia now, even before you consider the impact of losing Steve Jobs? If the Big Four record labels suddenly got it and built their own on-line all-you-can-eat music service at a sensible price point, iTunes could be over in weeks. There are several hardware companies that are close enough to the level of Apple's mobile tech (or already better, in some aspects) that the "serious" segment could desert Apple within a mobile contract cycle (about 18-24 months here in the UK) leaving only the "style" segment. Finally, Apple's developer-hostile policies make them few friends, and I think it's only a matter of time before their business models based on exclusivity and taking huge cuts out of anything sold via their platform become unsustainable in the face of competition. Amazon have done very well to corner the market as the default on-line retailer, and are the only company on the list I definitely wouldn't be shorting if I were an investor in US stocks. They actually sell useful stuff and have an obvious and sustainable business model, and the barrier to entry for competitors is huge. I don't rate their chances of taking over any form of home-grown content production or becoming a heavyweight on-line media provider any time soon, though; they simply aren't good enough at this stuff or in a position to offer enough value in return for exclusive rights to establish a dominant position given the competition (and their position won't be defensible against that competition if they lean too hard on the kinds of small/independent outfit who could most benefit from working with them on such projects). Facebook have done incredibly well, but mostly driven by being in the right place at the right time to achieve critical mass in a way that no previous network ever did. That could be their Achilles' heel just as easily, though: the moment everyone has enough friends not on Facebook that they can't just use it as their default communications medium, Facebook is in trouble. And that could happen any time a viable competitor network begins to establish itself, just as Facebook once displaced a couple of formerly huge social networks rather efficiently itself. I don't think Google+ is likely to be that competitor in its current form, but there is no shortage of companies with the will and the funding to do it, and Facebook has to be lucky every time while the entire field of competitors only has to be lucky once. Also, Facebook's advertising seems a very shaky proposition for long-term revenue; I know plenty of people who have used it once or twice, but none who would use it again given how pathetically ineffective it seems to have been in every single case. Also also, before any of that happens, I think Facebook are going to cross the privacy line once too often in one too many countries, and the backlash is going to severely damage them in ways you can't fix just by spending more money. Google has a search engine, an e-mail service, a video sharing service, and a much more successful advertising model built around them. It also has a mobile OS and a browser to support the above. That at least gives it a strong business model that works, making it the other company here I wouldn't automatically short as a long-term investment. But then it has about 1,000,000 utter failures that would have sunk any other company years ago if it didn't have the Big Three to cover the losses. This situation has not changed for several years, except that the number of high profile failures has increased dramatically. None of those three positions is easily defensible in the face of determined competition, and I suspect it is more by luck (and inertia) than judgement that they have avoided this fate so far. And they are also vulnerable to a backlash against privacy. They're basically in the same position as Facebook, but much better at the good stuff and much less bad at the bad stuff. In other words, while all of the "Big Four" are no doubt keen to eat a piece of each other's pies, I don't think any of them is nearly as powerful as their reputation (and market caps/claimed valuations) suggest right now. They get a lot of press, but consider that, say, Netflix already make something like half the money that Facebook do, in a much more sustainable way and with obvious growth potential as Internet connections get faster and more content is consumed via different kinds of devices rather than the classic TV+(physical media) combination. A company like HTC moving into the tablet space could give Apple serious competition there. If a quiet giant like IBM or Microsoft decided to attack a consumer market again rather than focussing on big business, they have both the talent and the resources to challenge anyone. The high-tech world isn't nearly as small as the article suggests.
suivix 15y ago
Why is Steve Jobs's face in the first pic? Sorry if this is too insensitive, but he won't be involved in the 'Great Tech War of 2012'.
- SoftwareMaven 15y ago
  To be fair, he is still pretty iconic as the guy who really ramped up the war. I'll give them the benefit of that doubt.
  - hkmurakami 15y ago
    Furthermore, since Jobs is rumored to have stocked Apple's product pipeline for the coming years, Apple's product vision will in essence be lead by the specter of Steve Jobs.
- bergie 15y ago
  quite a bit of the article reads like it was written before his death, and then only hastily revised (mentions of Steve Jobs doing things in future tense, etc)
- hkmurakami 15y ago
  The publication explains here that these issues were printed before Jobs' death. http://www.fastcompany.com/1787260/the-legacy-of-steve-jobs-and-the-next-tech-war http://www.fastcompany.com/1787260/the-legacy-of-steve-jobs-...
SoftwareMaven 15y ago
Apple doesn't believe that niche exists [the 7" tablet], but you can bet it will if the Kindle Fire succeeds. I hear this a lot, and I always think it discredits the authors analysis of Apple. Apple doesn't think there is a product worth making at 7", which is far different than there not being a market. Apple also thought Netbooks weren't worth making (worst of both worlds). That didn't mean there wasn't a market or a niche, but that Apple doesn't rush to fill a void because other people have a product that is selling there. Apple doesn't think about marketing like other companies. And they don't create products to "counter" other products. They create the products that they think are perfect. That said, i do think there is a market. There are times I wish I had a 7" iPad. Not often, but occasionally. I would probably buy two of them to keep around the house for the kids to use.
- 0x12 15y ago
  > They create the products that they think are perfect. They create those products that they believe will make them the most money. No apple product ever built past or present was 'perfect' when it was released, but it was more than good enough and typically a notch or two above the competition with an associated price tag.
ethank 15y ago
More interesting than the holistic ecosystem/platform war is who among these four will join efforts to counter the other two?
- redthrowaway 15y ago
  Outside of possibly Amazon-Google, I don't see anyone joining up. Google hates Facebook, Apple hates Google, neither has integrated facebook into their mobile OS, and everyone seems content to ignore Amazon. We'll see how that changes with the introduction of the Fire, but I can't see facebook moving beyond their niche, and there's too much direct competition between Apple-Google and Apple-Amazon to allow for a partnership between anyone other than Google and Amazon.
- Apocryphon 15y ago
  I think more interesting is what outside major players will jump in. Facebook and Microsoft have some good ties.
exit 15y ago
> Zuckerberg is even maturing into a capable presenter. Compared to Bezos, Cook, and Page, he's most adept at mimicking Jobs's singular skills, and comes off as infectiously visionary when unveiling a new product. really?
- redthrowaway 15y ago
  I had the same reaction, but you have to keep in mind the company he's in. Cook's iPhone presentation struck me as fine but uninspiring, I've never seen Bezos give a presentation, and Larry's... not good in public. I still can't stand Zuck, but at least he hasn't had any more "hoody moments".
  - mediaman 15y ago
    I watched Bezos unveil the Fire, and I wasn't really impressed with his presentation skills. Not nearly as good a story teller as Jobs.
- ihateSJCS 15y ago
  Like it or not, Zuckerberg is a better presenter than Steve Jobs.
YetAnotherAlias 15y ago
I guess it is not surprising anymore, but I couldn't help wondering about Microsoft being left out of consideration. Would love to here thoughts about how, and if, MS will compete among these companies.
- FilterJoe 15y ago
  Agreed. While clearly not leaders in hardware, Microsoft's entrenched position in the enterprise means you can never count them out. They have a history of arriving very late to a game, getting it wrong a few times, but finally getting it right to gain the #1 position. I guess it's just hard to see now given some of the recent high profile failures like Zune and the meager gains in Bing market share after spending so many billions. But what about expanding upon their strong foothold in the living room with Xbox and Kinect?
- tsotha 15y ago
  The xbox puts Microsoft in a better position than Apple for control of the television. I don't think you can count them out at all.
- Apocryphon 15y ago
  MS is definitely a competitor, but the article seems to be saying that they lack the energy and freshness of these four.
reemrevnivek 15y ago
The vertical control of Apple (most notably) as well as Amazon and Google is almost complete. The author noted that they don't have: 1. Billing/banking control - Purchases on all three go through credit cards, where a portion gets siphoned off. 2. Internet access control - Apple has a lot of clout, and can do basically whatever they want, but they're still limited by the ISPs and telecos. I really hope to see these companies compete in these industries. However, he left off one more space where they don't compete: at the bottom of the stack, selling silicon. Companies like Samsung and Toshiba can build their own SoCs for the devices they manufacture. If those manufacturers start doing more internally, we might see some impressive and competitive new devices.
- cube13 15y ago
  I don't think that any of the three are willing to try to integrate billing directly instead of relying on Paypal, Visa, etc. It's a regulatory minefield between all the world governments, and the % that the payment processors take is probably very much worth the costs that would otherwise be taken from keeping such a system working. I'm sure Apple and Google have explored it, but in the end, found that the current payment processors provide both a level of service(Visa's payment backend, as far as I can tell, has never suffered non-scheduled downtime) and help avoid all the regulatory pitfalls that it's worth the price.
evanjacobs 15y ago
I'm really surprised that there was almost no mention about the competition between these companies for hiring engineers. If there is indeed a "tech war" coming (and I believe there is) then the company with the biggest and best army of engineers will win and there is a fierce competition among these companies to build those armies.
chris_dcosta 15y ago
Most of what Facebook and Google do is thanks to advertising revenue, with variations on the theme. If something comes along to take that away, a start-up with a new business model, then data becomes the thing that has value for them. Here, privacy issues get racked up so both Google and Facebook would start to look shaky if that happened too, and there are signs. That's where Amazon and Apple are both superior. They've never been based solely based on an advertising business model, if they get revenue with iAds it's a bonus. It's the fact that they control their market places which is important. And they have what people want to buy.

118 points by ssclafani 15y ago

fleitz 15y ago

And while these 4 duke it out a new competitor will emerge and change the game completely.

bergie 15y ago
It looks like Microsoft is trying hard to pivot and be that competitor
revorad 15y ago
And that's the reason, reading story after story about the big 4 on HN is getting so boring to me. No doubt they make amazing products, but these are giant corporations now. Siri, G+, Timeline, Kindle Fire are all fascinating products, but they don't excite me nearly as much as a simple app made by a fledgling two person startup.
- Apocryphon 15y ago
  I'm not even sure if characterizing this is a four horse race is accurate. The article acknowledges the existence of other giants such as Microsoft and HP, but state they are behind the times and struggling to catch up. But are there any other rising powerhouses out there besides the four horsemen? eBay?

algorithms 15y ago

Guess the launch of Android 4.0 in two days will show us where we're going. It basically decides the future for 3 major products: Smartphones Tablets Google TV (this could be a LARGE market if they find the right partners) Add to that the fact that big G will probably try to push Google+ even further with this new generation and this makes the event more important than any previous Google Keynote.

mikeryan 15y ago

I'm I the only one who doesn't place Facebook in the class as Amazon/Google/Apple? Maybe, someday, but not quite yet.

johnyzee 15y ago
Agreed. For all the hype, pre-IPO valuation and talent draining, Facebook has done surprisingly little worthy of attention for several years now.
- brandnewlow 15y ago
  They have detailed personal information on 700m+ people. How is that not "worthy of attention"?
  - redthrowaway 15y ago
    They haven't figured out how to use it to make anywhere near the kind of money that would justify their valuation, and any attempts to exploit it in any meaningful and profitable manner would likely be met with a huge backlash.
- Silhouette 15y ago
  For all the hype etc, I'm not sure how much any of these companies have really done that is worthy of positive attention for several years now. They obviously have a few big hits, but they all have at least as many failures and/or obvious competitive weaknesses. Apple have no doubt moved or effectively created entire markets and business models over the years. The iPod, iPhone and iPad have changed consumption patterns for a generation, and iTunes is right there in the background. But how much of the future is down to inertia now, even before you consider the impact of losing Steve Jobs? If the Big Four record labels suddenly got it and built their own on-line all-you-can-eat music service at a sensible price point, iTunes could be over in weeks. There are several hardware companies that are close enough to the level of Apple's mobile tech (or already better, in some aspects) that the "serious" segment could desert Apple within a mobile contract cycle (about 18-24 months here in the UK) leaving only the "style" segment. Finally, Apple's developer-hostile policies make them few friends, and I think it's only a matter of time before their business models based on exclusivity and taking huge cuts out of anything sold via their platform become unsustainable in the face of competition. Amazon have done very well to corner the market as the default on-line retailer, and are the only company on the list I definitely wouldn't be shorting if I were an investor in US stocks. They actually sell useful stuff and have an obvious and sustainable business model, and the barrier to entry for competitors is huge. I don't rate their chances of taking over any form of home-grown content production or becoming a heavyweight on-line media provider any time soon, though; they simply aren't good enough at this stuff or in a position to offer enough value in return for exclusive rights to establish a dominant position given the competition (and their position won't be defensible against that competition if they lean too hard on the kinds of small/independent outfit who could most benefit from working with them on such projects). Facebook have done incredibly well, but mostly driven by being in the right place at the right time to achieve critical mass in a way that no previous network ever did. That could be their Achilles' heel just as easily, though: the moment everyone has enough friends not on Facebook that they can't just use it as their default communications medium, Facebook is in trouble. And that could happen any time a viable competitor network begins to establish itself, just as Facebook once displaced a couple of formerly huge social networks rather efficiently itself. I don't think Google+ is likely to be that competitor in its current form, but there is no shortage of companies with the will and the funding to do it, and Facebook has to be lucky every time while the entire field of competitors only has to be lucky once. Also, Facebook's advertising seems a very shaky proposition for long-term revenue; I know plenty of people who have used it once or twice, but none who would use it again given how pathetically ineffective it seems to have been in every single case. Also also, before any of that happens, I think Facebook are going to cross the privacy line once too often in one too many countries, and the backlash is going to severely damage them in ways you can't fix just by spending more money. Google has a search engine, an e-mail service, a video sharing service, and a much more successful advertising model built around them. It also has a mobile OS and a browser to support the above. That at least gives it a strong business model that works, making it the other company here I wouldn't automatically short as a long-term investment. But then it has about 1,000,000 utter failures that would have sunk any other company years ago if it didn't have the Big Three to cover the losses. This situation has not changed for several years, except that the number of high profile failures has increased dramatically. None of those three positions is easily defensible in the face of determined competition, and I suspect it is more by luck (and inertia) than judgement that they have avoided this fate so far. And they are also vulnerable to a backlash against privacy. They're basically in the same position as Facebook, but much better at the good stuff and much less bad at the bad stuff. In other words, while all of the "Big Four" are no doubt keen to eat a piece of each other's pies, I don't think any of them is nearly as powerful as their reputation (and market caps/claimed valuations) suggest right now. They get a lot of press, but consider that, say, Netflix already make something like half the money that Facebook do, in a much more sustainable way and with obvious growth potential as Internet connections get faster and more content is consumed via different kinds of devices rather than the classic TV+(physical media) combination. A company like HTC moving into the tablet space could give Apple serious competition there. If a quiet giant like IBM or Microsoft decided to attack a consumer market again rather than focussing on big business, they have both the talent and the resources to challenge anyone. The high-tech world isn't nearly as small as the article suggests.

suivix 15y ago

Why is Steve Jobs's face in the first pic? Sorry if this is too insensitive, but he won't be involved in the 'Great Tech War of 2012'.

SoftwareMaven 15y ago
To be fair, he is still pretty iconic as the guy who really ramped up the war. I'll give them the benefit of that doubt.
- hkmurakami 15y ago
  Furthermore, since Jobs is rumored to have stocked Apple's product pipeline for the coming years, Apple's product vision will in essence be lead by the specter of Steve Jobs.
bergie 15y ago
quite a bit of the article reads like it was written before his death, and then only hastily revised (mentions of Steve Jobs doing things in future tense, etc)
hkmurakami 15y ago
The publication explains here that these issues were printed before Jobs' death. http://www.fastcompany.com/1787260/the-legacy-of-steve-jobs-and-the-next-tech-war http://www.fastcompany.com/1787260/the-legacy-of-steve-jobs-...

SoftwareMaven 15y ago

Apple doesn't believe that niche exists [the 7" tablet], but you can bet it will if the Kindle Fire succeeds. I hear this a lot, and I always think it discredits the authors analysis of Apple. Apple doesn't think there is a product worth making at 7", which is far different than there not being a market. Apple also thought Netbooks weren't worth making (worst of both worlds). That didn't mean there wasn't a market or a niche, but that Apple doesn't rush to fill a void because other people have a product that is selling there. Apple doesn't think about marketing like other companies. And they don't create products to "counter" other products. They create the products that they think are perfect. That said, i do think there is a market. There are times I wish I had a 7" iPad. Not often, but occasionally. I would probably buy two of them to keep around the house for the kids to use.

0x12 15y ago
> They create the products that they think are perfect. They create those products that they believe will make them the most money. No apple product ever built past or present was 'perfect' when it was released, but it was more than good enough and typically a notch or two above the competition with an associated price tag.

ethank 15y ago

More interesting than the holistic ecosystem/platform war is who among these four will join efforts to counter the other two?

redthrowaway 15y ago
Outside of possibly Amazon-Google, I don't see anyone joining up. Google hates Facebook, Apple hates Google, neither has integrated facebook into their mobile OS, and everyone seems content to ignore Amazon. We'll see how that changes with the introduction of the Fire, but I can't see facebook moving beyond their niche, and there's too much direct competition between Apple-Google and Apple-Amazon to allow for a partnership between anyone other than Google and Amazon.
Apocryphon 15y ago
I think more interesting is what outside major players will jump in. Facebook and Microsoft have some good ties.

exit 15y ago

> Zuckerberg is even maturing into a capable presenter. Compared to Bezos, Cook, and Page, he's most adept at mimicking Jobs's singular skills, and comes off as infectiously visionary when unveiling a new product. really?

redthrowaway 15y ago
I had the same reaction, but you have to keep in mind the company he's in. Cook's iPhone presentation struck me as fine but uninspiring, I've never seen Bezos give a presentation, and Larry's... not good in public. I still can't stand Zuck, but at least he hasn't had any more "hoody moments".
- mediaman 15y ago
  I watched Bezos unveil the Fire, and I wasn't really impressed with his presentation skills. Not nearly as good a story teller as Jobs.
ihateSJCS 15y ago
Like it or not, Zuckerberg is a better presenter than Steve Jobs.

YetAnotherAlias 15y ago

I guess it is not surprising anymore, but I couldn't help wondering about Microsoft being left out of consideration. Would love to here thoughts about how, and if, MS will compete among these companies.

FilterJoe 15y ago
Agreed. While clearly not leaders in hardware, Microsoft's entrenched position in the enterprise means you can never count them out. They have a history of arriving very late to a game, getting it wrong a few times, but finally getting it right to gain the #1 position. I guess it's just hard to see now given some of the recent high profile failures like Zune and the meager gains in Bing market share after spending so many billions. But what about expanding upon their strong foothold in the living room with Xbox and Kinect?
tsotha 15y ago
The xbox puts Microsoft in a better position than Apple for control of the television. I don't think you can count them out at all.
Apocryphon 15y ago
MS is definitely a competitor, but the article seems to be saying that they lack the energy and freshness of these four.

reemrevnivek 15y ago

The vertical control of Apple (most notably) as well as Amazon and Google is almost complete. The author noted that they don't have: 1. Billing/banking control - Purchases on all three go through credit cards, where a portion gets siphoned off. 2. Internet access control - Apple has a lot of clout, and can do basically whatever they want, but they're still limited by the ISPs and telecos. I really hope to see these companies compete in these industries. However, he left off one more space where they don't compete: at the bottom of the stack, selling silicon. Companies like Samsung and Toshiba can build their own SoCs for the devices they manufacture. If those manufacturers start doing more internally, we might see some impressive and competitive new devices.

cube13 15y ago
I don't think that any of the three are willing to try to integrate billing directly instead of relying on Paypal, Visa, etc. It's a regulatory minefield between all the world governments, and the % that the payment processors take is probably very much worth the costs that would otherwise be taken from keeping such a system working. I'm sure Apple and Google have explored it, but in the end, found that the current payment processors provide both a level of service(Visa's payment backend, as far as I can tell, has never suffered non-scheduled downtime) and help avoid all the regulatory pitfalls that it's worth the price.

evanjacobs 15y ago

I'm really surprised that there was almost no mention about the competition between these companies for hiring engineers. If there is indeed a "tech war" coming (and I believe there is) then the company with the biggest and best army of engineers will win and there is a fierce competition among these companies to build those armies.

chris_dcosta 15y ago

Most of what Facebook and Google do is thanks to advertising revenue, with variations on the theme. If something comes along to take that away, a start-up with a new business model, then data becomes the thing that has value for them. Here, privacy issues get racked up so both Google and Facebook would start to look shaky if that happened too, and there are signs. That's where Amazon and Apple are both superior. They've never been based solely based on an advertising business model, if they get revenue with iAds it's a bonus. It's the fact that they control their market places which is important. And they have what people want to buy.