Five companies are slugging it out in what may be the most competitive and unique business battle of all time. It is larger in scale with more at stake than battles in other industries including transportation, energy, and finance.
More remarkable is how different the combatants are from one another. Instead of similar companies competing (Toyota versus General Motors, for example), these companies hail from different business bases: an electronics manufacturer, a lifestyle computing company, an online retailer, a search engine, and a social network. In order: Samsung, Apple, Amazon, Google, and Facebook. I call them the Fabulous Five.
What are they fighting for? They are fighting for the right to define what they are fighting for. It is a category yet to emerge. The battle is about who can get the largest numbers of customers that generate deep and meaningful insights. Each company wants a massive following of human beings using their products and services in a way that generates monetizable information twenty four hours a day, seven days a week. Each of the Fabulous Five has a strong and growing foothold to do exactly that.
What about traditional powerhouses like Microsoft? Microsoft fell behind and is trying desperately to catch up with acquisitions (think $8.5 billion for Skype). Microsoft will regress into a word processing, server, and gaming company. Blackberry? RIM lost one million customers in the last three months of 2012. Motorola? Sony? HP? Yahoo? They are watching the battle from the sidelines. PC’s are becoming irrelevant as the tablet and smartphone takes hold.
That said, there are some potential challengers to the Fabulous Five. Twitter, for example, has an impressive subscriber base generating 500 million tweets a day that are being archived by the US Library of Congress. Despite the enormity of Twitter, it has a serious gap. Twitter (the company) lacks a way to own the insights being generated. Twitter is just an advertising portal. More concerning is the Fabulous Five can encroach this space fairly easily. Some already have.
Which of the Fabulous Five will win is not a matter of financial resources. What matters is their core competencies and their ability to stretch those into other domains. More important is what each company learns about consumers to stretch further.
Who has the advantage? Let’s look at sheer size and scope of each.
Google averages nearly five billion searches per day. Insights about keywords used to search the Internet are extremely valuable. Google learns what it takes to make websites search engine friendly. It sells that to companies who want their websites optimized. Google’s Droid operating system gives it presence in smartphones. Now they seek ways to stretch into consumer electronics.
Amazon leads the nearly $300 billion online retail space. It had nearly 8 million unique visitors on one day (Black Friday). Amazon learns how people shop, how they compare, and what they are willing to pay across a wide range of consumer products. It is stretching itself into the smartphone arena. Amazon will continue to make bold moves.
Facebook has over one billion users. Despite all the criticism about its privacy policies, Facebook has an enormous advantage in learning how people socialize, communicate, and visualize their relationships. But it lacks a smartphone, entertainment platform, and shopping presence that others have.
Samsung leads in technology development the way that Apple leads in design. Samsung is well managed and aggressive. It has massive resources to put hundreds of millions of handheld units into any region of the world. The question is what they do with it – how much of the information stream will come from the unit versus the operating system within that unit. Samsung knows it needs its own smartphone operating system to compete with Google.
Apple is the most valuable company on the planet with a fiercely loyal base of customers across every demographic. It wins on design, integration, and service. More than the other combatants, Apple cuts across a wider swath of a person’s daily life. Its next strategic move will likely set the tone for the next wave of battles. Fierce patent skirmishes with Samsung and others will subside so they can all focus on with the real battle – earning loyalty and staying relevant.
The common theme for all five is innovation – the ability to stretch into other domains and create new value systematically. The choices they make to compete will be topics of future blog posts here. 2013 is sure to be a milestone for this epic battle.
Wait! Before you go…
Choose how you want the latest innovation content delivered to you:
- Daily — RSS Feed — Email — Twitter — Facebook — Linkedin Today
- Weekly — Email Newsletter — Free Magazine — Linkedin Group
Drew Boyd is Assistant Professor of Marketing and Innovation at the University of Cincinnati and Executive Director of the MS-Marketing program. Follow him at www.innovationinpractice.com and at https://twitter.com/drewboyd