Paul Krugman: Microsoft, Apple and the Decline of E-Empires!

Dear Commons Community,

New York Times columnist, has a piece today that examines the rise and fall of technology companies.  Using Microsoft and Apple as examples:

“The trouble for Microsoft came with the rise of new devices whose importance it famously failed to grasp. “There’s no chance,” declared CEO Steve Ballmer in 2007, “that the iPhone is going to get any significant market share.”

How could Microsoft have been so blind? [Krugman cites] Ibn Khaldun, a 14th-century Islamic philosopher who basically invented what we would now call the social sciences. And one insight he had, based on the history of his native North Africa, was that there was a rhythm to the rise and fall of dynasties.

Desert tribesmen, he argued, always have more courage and social cohesion than settled, civilized folk, so every once in a while they will sweep in and conquer lands whose rulers have become corrupt and complacent. They create a new dynasty — and, over time, become corrupt and complacent themselves, ready to be overrun by a new set of barbarians…

I don’t think it’s much of a stretch to apply this story to Microsoft, a company that did so well with its operating-system monopoly that it lost focus, while Apple — still wandering in the wilderness after all those years — was alert to new opportunities. And so the barbarians swept in from the desert…

Anyway, the funny thing is that Apple’s position in mobile devices now bears a strong resemblance to Microsoft’s former position in operating systems. True, Apple produces high-quality products. But they are, by most accounts, little if any better than those of rivals, while selling at premium prices.”

These are provocative comparison.  There are a number of other tech companies (IBM, Digital Equipment Corporation, Tandy Corporation, Atari) that once dominated a segment of the tech market and now are shells of their former selves.


One comment

  1. I belive it’s nothing more than marketing. There are many simmilar products, cheaper than Apple, but they also sell a story. I also think they are a steap ahead with the device design and software development…