These 4 companies started off doing very different things but more and more, they’ve decided to focus on having vertical integration. They now try to own the content, the software and even the hardware in order to complete the entire customer experience. It’s a fascinating thing to see:
-Apple: Perhaps the first to try to do this, Apple started off with devices (Mac’s and ipods and eventually with iPhones, iPads, etc), and its own operating system (iOS) and is gradually providing more and more content through iTunes, the app store where its acts as a powerful middle man. Apple has even started offering cloud computing through iCloud, making it possible for the consumer to basically get all of its entertainment through the formerly Steve Jobs ran company.
-Microsoft: Once the kind of software (you could argue that it still is), Microsoft has taken the lead in gaming through the xBox, continues to dominate the operating system space through Windows, has launched SkyDrive for cloud based data and just recently announced it would finally go for the next frontier as it will produce its own hardware, the Surface, This is a very significant step for Microsoft.
-Amazon: You probably thought that Amazon was an ecommerce store. It is that (the biggest by far) but it’s also a lot more. It now stands behind the most powerful distribution chain in the world in some regards, has been able to successfully launch tablets, to promote its products, is working on same day delivery, is arguable the leader in cloud computing as it provides the backbone for many of the top services in the world (Netflix, etc). Also, Amazon has increasing power over retailers, authors, etc
-Google: The company defined by search has quickly became a force to be reckoned with in terms of cloud-based software, email, now has its own operating system, Android, which rules the mobile phone world, has its own tablets, the most used browser (Chrome), etc, The company is working on many different products and services and is increasingly becoming the top internet play. It even set in place a beta named Google Fiber to be the actual internet provider.
Will There Be One Winner?
Clearly, these 4 companies are going after an insanely big and valuable market. I’m not sure if there will only be one winner as Apple and Google for example have clearly showed they could co-exist. That being said, I doubt that the 4 of them will remain “as relevant” so picking the right one could end up being an insanely valuable investment. Why? Because these companies are becoming so powerful that it’ll become nearly impossible for a new player to come in. Think about it. Even now, if a company decided to compete, they would need to start investing heavily in:
-hardware, patents, etc
-data, cloud infrastructure
-creating major alliances with content producers in a world where many have signed off exclusivity
Sure, you can try to do only one of those.. but think of companies that only do hardware (Dell, HP, Blackberry,etc), software (Yahoo, Facebook, etc) or even services (phone carriers,etc) and you’ll see that while some are doing well, the majority are struggling.
So who would you place your bet on?
I’d probably make a long term play on Google and Amazon at this point with Apple also being a strong play