Nobel laureate celebrity economist and journalist Paul Krugman wrote an interesting blog post in The New York Times on Saturday, inspired by the resignation of Microsoft CEO Steve Ballmer. Krugman is a macro-economist himself, and doesn’t often delve into corporate business as such, but now he felt like telling Apple off a bit.
While many consider Ballmer’s resignation (albeit it is unclear whether he was told to leave or just simply left) a failure, and the end of a three decade Microsoft era, Krugman claims the duel between the two giants is not over yet. The recurring element of the numerous articles analysing the situation is that Microsoft has been unable to produce anything of high quality (apart from Xbox) for years, and that Ballmer has failed to turn the software business into a consumer electronics company and Apple has been far more successful in this area.
Krugman reminds NY Times readers that Microsoft is actually an incredible success story, as it maintained its PC lock for decades and still maintains its position more or less today. In the same time, Apple’s similar lock isn’t nearly as secure, because it’s relying on the loyalty of individual customers. Microsoft relies on the loyalty of IT managers and device manufacturers, and they are much more conservative by nature.
Apple’s products no longer have the dramatic quality edge that would justify its premium prices, says Krugman, and this state of affairs cannot be maintained for much longer. Microsoft lags behind Apple on the mobile and tablet market for now, but Apple doesn’t have a secure technological advantage any more, and can be easily vanquished by the joint forces of Microsoft and Samsung for example.
Krugman, who is a Windows 7 user, carries on by complaining about the development attitude of Apple, based on the “Steve Jobs knows better what’s good for you“ philosophy. He is unable to organize his favourite iTunes videos into a folder on his tablet, but has to label them as the episodes of a non-existent TV show, which is “doable, but stupid” – says Krugman.