Skip to main content

Corporate Game Theory: Apple vs Microsoft

It seems as though in the world of college students, Apple has a large growing base of customers.  They seem to have specifically targeted college students, a strategy that seems to quite beneficial.  No doubt the amount of students attending college is increasing with each school year, so in the game of computer sales this seems like a viable group to target.  Each summer Apple offers discounts such as a $100 gift card to iTunes / the app store, or throwing in a free iPod with the purchase of a new computer to target students buying laptops for college.  If I were to ask you, “Who would you say is their biggest competitor?” I believe it would be safe to say that Microsoft would come up frequently.  So why is it that Microsoft doesn’t seem to be taking such an outwardly student targeted approach?  Perhaps its because they know more about Game Theory than is readily obvious.

Firstly, in the 1990s Microsoft put large efforts into the development of the field:

Secondly, a quick search through Microsoft Research reveals that they have continued efforts in the development of game theory:

More intriguing, is that Microsoft funds research for articles such as how to optimize collusion in multi-unit auctions:

As I look around campus I see laptops everywhere, and more frequently I would say that it is a Mac or Macbook Pro.  But, consider all of the libraries, computer labs, workrooms, etc. on campus: Mac or PC?  The large majority are PC’s.  My conclusion is this: I found it intriguing that a company such as Microsoft wouldn’t put more effort into trying to expand their customer base among students, but I believe this is because we simply aren’t worth their time.

Microsoft still holds a large majority of the corporate venue, and even the institutions which all of these students are going to. Yes, there are a lot of students entering college each year, but Microsoft puts more effort into creating an operating system and variants of said operating system that they allow other companies to install with their own products.  So companies like Dell and Sony spend all of their time trying to get students to buy their computers, and Microsoft benefits from their hard work by selling them the license to use their operating system.

What Microsoft’s larger goals and motivations are I cannot be sure of.  I would say that although it seems to me as a college student that Mac is winning the battle, in the larger picture of how many companies and universities alone that Microsoft continually works with (for example, you as a Cornell student have access to – if you are in the right college – free Windows programs and even operating systems), their strategy seems to yield a greater profit for much less effort with regard to marketing.

Fact: it is illegal to install a Mac operating system on anything (hardware) other than something that was sold by Apple.  Yes, there are many reasons this is done – none of which I can say do not have cause, Mac produces a fantastic product – but if history should repeat itself Mac may be in trouble.

Remember those things called VHS?  Well, similar to the battle we recently experienced between HD DVD and BluRay, there was a battle between JVC’s VHS and Sony’s BetaMax.  Basically, Sony didn’t want to sell the rights to their technology, and JVC did so more companies produced VHS and as a result BetaMax became obsolete.  Ultimately, Sony learned form their mistakes with BluRay and won (speculation: Disney bought into BluRay not HD DVD).

Why is this important?  While both companies seem to be thriving, it is a dangerous game to not let any other companies use your product.  Windows 7 is available on a wide variety of computers in a large range of prices, Mac is available on a few and in an even more limited (and higher) price range.

Keeping in mind the extensive amount of research Microsoft pours into Game Theory, it would be foolish to underestimate Microsoft just because of a brushed metal alloy finish.  I speak not of the quality of either product, I have both Mac and PC and I love them both.  I only wish to demonstrate to those in the college student demographic that there is a (much larger) world outside of our own, and to express my interest in the drastically different yet both fulfilling tactics of the two companies.  The two have been at war since the 80s and before, and it will be interesting to see how the companies adapt their strategies and to see what demographic they target the most in the future.


Leave a Reply

Blogging Calendar

October 2011
« Sep   Nov »