Apple vs Alphabet
Looking for the next battlefield
Yesterday we saw Apple briefly relinquish its long-held title as the world’s most valuable company. It will probably finish the week in second place to Alphabet, the company formerly known as Google.
Then today, on Richard Holway’s Tech Market View (one of the dailies that I read) a particular sentence caught my eye: “(Alphabet surpassing Apple) shows that, in tech, the baton has finally been passed from Hardware suppliers to the Services sector led by Google and Facebook.”
This got me thinking about the current tech cycle that we’re in. Before Microsoft’s ascendancy, there were a plethora of successful hardware makers. The hardware became commoditised and all of a sudden, the software and services became the more valuable part of the equation in the minds of consumers and businesses. That trend saw to Compaq, Gateway, etc.
During the mobile era there are certainly fewer important, consumer-facing hardware makers. Apple is pre-eminent, due to their business model, design and marketing, and likely managed to keep stoking the fires of sales growth beyond where one might expect given slowing advances in device performance. But I’d agree with Richard’s assessment of the situation here. Much of the consumer surplus of the smartphone has been eked out and it’s now the turn of software and services. Indeed advances here will likely drive the purchase cycles of hardware more so than Apple and Samsung marketing dollars. The pace of software advances will render more hardware obsolete more quickly.
That leads to the question of what’s next. The car is the commonly agreed upon new battleground. I can see more than one business making hay with SDCs. Personally, I’m looking forward to the genuinely pioneering fronts of tech MR/VR, quantum computing, AI advances, biochips, etc. where the avant-garde nature of the opportunity is likely to yield a next generation of behemoths…just like Google and Facebook.
