How people connect to the Internet
Golman Sachs produced a great graphic showing how the Internet is accessed and how this impacts Microsoft.
For five years at the start of the century Microsoft had a virtual monopoly on internet connected devices. Since 2005 Microsoft’s share of connected devices has slowly eroded and today stands at about 20% while Apple has risen from 5% to 24%.
Of course the strength of Windows Phone and the Windows tablets may change this, but not many think so.
Microsoft’s inability to make a smartphone people really love could be a deadly mistake. As people became comfortable with the Apple iPhone, they became open to the idea of the iPad. And as the iPad takes off, with sales passing 100 million, it is eroding PC sales. As people become comfortable with the iPad, they’re going to be more inclined to buy a Mac to stay in Apple’s ecosystem.
But what about corporations, you might say. Well, Goldman says that in 2000, 60% of computing purchases were from corporations. Today, it’s only 15%. That means Microsoft has to fight for consumer sales, which is not its strength.