Linked by Thom Holwerda on Fri 12th Jun 2009 13:55 UTC
Internet Explorer Yesterday, Microsoft dropped a bomb by announcing that all versions of Windows 7 released in Europe would ship without Internet Explorer pre-installed. This was in answer to the EU antitrust investigation currently under way regarding possible illegal bundling of Internet Explorer with Windows. The first reactions to this news are coming in, with Opera and the EU both lamenting the move.
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RE[6]: This is almost perfect
by CaptainN- on Fri 12th Jun 2009 21:02 UTC in reply to "RE[5]: This is almost perfect"
CaptainN-
Member since:
2005-07-07

I think the distinction here (because I love distinctions :-) ) is in what kind of monopoly a company has. Apple has a vertically integrated monopoly, as apposed to Microsoft's horizontal monopoly.

Apple does control everything from the hardware right down to the sale - Walmart has been criticized for similar behavior in some markets. In general, in the US at least, these are not seen as a problem in the same way as a horizontal monopoly such as Microsoft has with Windows, because you can always find another supplier or device in the same market (such as going from Blackberry to Palm Pre to iPhone, to something else). So they are generally not regulated to as great an extent.

In the Microsoft Windows style monopoly, they do have near ubiquity when it comes to supplying any OEMs with an OS product, due to pressure on both ends - Microsoft dominating supply, and customers demanding compatibility, or even demanding Windows by name. Vertical integration, taking more control over the hardware and supply chain does have advantages. They could be the supplier of hardware and the company you go to for support, rather than the OEMs. They've done exactly that with the X-Box 360 and the Zune for example. I do think MS would get less grief if they had a vertical monopoly instead of a horizontal one (having both would be worse).

I think they are in a tough spot when it comes to converting their horizontal monopoly into a vertical one, when it comes to Windows, because they have business relationships to maintain - all those OEM clients they sell their OS to. It would be difficult to start to compete with OEMs with which you are making a value proposition to. That probably explains the great lengths which Microsoft went through to explain that the original X-Box could not be run as a desktop computer (even though there was not technical reason why not). Going the opposite direction is also tricky, and Apple is not doing that either.

When it comes to smart phones - most of the manufacturers have clearly chosen to vertically integrate rather than to attempt to create a software product that could be used horizontally across one level of the market (Google with Android and MS with Windows Mobile are competing here though - and seemingly getting stomped). I think that makes as much sense for smart phone makers as it would for smart PC makers. ;-)

To bring this back on topic - this move by MS makes them look much more like middleware, that can be customized by OEMs to get partway to the point where the OEMs are able to use Windows as a base system, and build in their own competitive advantages, rather than relying on MS for a complete package. I think that would be great for MS (though they will not see it that way) - it's too small a step to really make them competitive with what a motivated OEM could do with an open source operating system stack like Ubuntu or Android - or what Asus has already done with Xandros (poor choice IMO).

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