If You Define the Market Narrowly Enough, Monopolies Are Everywhere
from the fun-with-definitions dept
It's almost become a cliche to note the decline of Microsoft as a competitive force in the software industry. True, it's still a large and profitable company, but it's been consistently unsuccessful in its attempts to dominate new markets the way it did in the 1990s. The XBox and Zune are fine products, but they're not market leaders. Neither are its software offerings. Microsoft's mobile OS is getting clobbered by Symbian and faces more stiff competition from Blackberries, iPhones, and soon Google phones. Its online offerings often run in third place behind Google and Yahoo. Internet Explorer is still the leading browser, but competition from Firefox and Safari have brought its market share down from 95 percent in 2004 to 82 percent today. This sure looks to me like a vigorously competitive market.However, in recent filings, ten states and the District of Columbia argued that Microsoft is still a monopoly facing no serious competition from Google, Mozilla, or other firms. They're seeking to have federal monitoring of Microsoft's business practices under antitrust law extended until 2012. To make their case, they've stuck to the narrow definition of the relevant market they adopted in the 1990s, arguing that Microsoft has a monopoly for "Intel-compatible PC operating systems." I'm not sure that definition made sense in the 1990s, but it certainly doesn't make sense now. Microsoft's smartest competitors haven't attempted to launch a frontal assault on the company's operating system business. Instead, they've focused on beating Microsoft in related markets, including search engines, mobile phones, music players, and consoles. Companies like Apple and Google now enjoy commanding market shares in those markets, and their dominant position in those markets gives them considerable leverage and customer loyalty. If Microsoft forced its customers to choose between Windows or iTunes, or between Windows or Google, a lot of them would choose the latter. There's no longer any serious reason to worry that Microsoft's large Windows market share will allow it to squelch innovation in the technology industry, because Microsoft now faces a lot more competition on a lot more fronts than it did in 1998. The rise of web-based applications has made it far easier for companies to get their products into consumers hands, and the rapidly-growing mobile market gives companies some new platforms to target that aren't controlled by Microsoft. Most of this competition is outside of the "Intel-compatible PC operating system" market, but that definition of the market was always somewhat arbitrary, and it looks ludicrously narrow now.
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Filed Under: monopolies
Companies: microsoft
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I agree with Tim.
Vista is punishment enough for Microsoft.
Ouch.
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Not having research statistics handy I'm sure AD & Exchange are still market leaders, and whether or not IE is gaining or losing ground, it's still the leader. Odly enough Netcraft is reporting that Apache is steadily losing ground and IIS is gaining. It's not THAT hard to see them as a monopoly in a lot of areas.
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Re:
With the wii, Nintendo has gained marketshare that it hadn't seen even in the 80s, and the PS2 was a far more successful system than the gamecube and the xbox. Microsoft hasn't hurt any of the vg system manufacturers you mentioned
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Is everyone gunning for Microsoft?
The reason I'm such a positive hater is that M$ presents us with a model: how to be successful, and how to be hated for it. Obviously, the leaders of M$ are fabulously wealthy. They are almost universally reviled, however, except in Redmond and in Business Schools.
Also, the tactics companies take to get around M$ are instructive, in and of themselves. Most people have attempted to ride the emerging technologies bandwagon. The internet blind-sided M$, and to a large extent, M$ still does not "get" the web, or at least some of the faster-moving portions of it.
For all of its faults, Google, at least, is a net-centric company. It also helps that its CEO is not a chair-throwing maniac with anger issues. For the most part, the M$ era resembles a very large boulder thrown into a river. For a while, the river backed up, but little streams have been seen coursing around the boulder, and soon, the floodgates will open (like my mixed metaphor?) M$ is not dominant in any gadgets which are expected to dominate our technology landscape in the near future (PDA, MP3-player, smart phone, and console, storage).
If convergence is not your thing, then chances are M$ is facing a death by a thousand cuts. If you think there is an emergent dominant player, then another 800-pound gorilla will take the place of M$. Either way, M$ control of the desktop is over.
Will the PC go away anytime soon? Please?
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Disagree
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Re: Disagree
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Re: Disagree
Tim, imagine if other companies could create Windows API compliant OSes. Then we'd have true competition in the PC Operating System market.
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Re: Disagree
The Dell Linux PCs were only more expensive than the identical Windows PCs at launch time. When everyone griped, Dell fixed it and claimed it was a mistake. So, that point is moot. And if MS did block Google at the OS-level, people would be up in arms and you're not giving much credit to the average user. On top of that, a move like that would put MS back under the microscope.
All that being said, I think the reason for the changes over the past years are due to the oversight. I'm just undecided as to whether they're still needed. If a formal process isn't continued, there would still be informal oversight happening by the market and it wouldn't take long before the appropriate authorities scrutinized MS again, should they run afoul of the law.
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For once, I disagree with you
Microsoft doing business (rubbishly) in many areas does not prevent them from being a monopoly in one of those areas.
...and for the rest, just read Urza9814's comment above instead.
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Are they a monopoly?
Yes, things are moving in a good direction (more web accessability, and more support of non-IE browsers), but until major banks, etc take alternate browsers seriously, MS is still a monopoly.
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Re: Are they a monopoly?
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Re: Are they a monopoly?
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Re: Are they a monopoly?
While I do not contest that Microsoft may well be a monopoly (because they have the power to, say, bar Firefox from the market by simply making it so that regular MS software updates are designed to delete important FF files) they are not actually doing the stuff that makes monopolies problematical.
Traditionally, monopolies are considered problematical because they can use their powers to shut down competing companies and remain the sole purveyor of [product]. Since Microsoft is, in fact, not doing this, they have none of the problems you usually get with monopolies.
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Re: Are they a monopoly?
It's a argeument that your bank has a poorly designed website.
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M$
I do not agree with some things they do.
However I do not view them as a monopoly.
I think they should be free of this.
Then if they do monopolistic things, they will go down fast or be put under the microscope again. For now they have been playing nicer than they used to.
I'm with Tim on this one.
Oh, and the Wii has outsold the 360 by more than a million units already. And the 360 only has a whole year's worth head start too.
http://www.vgchartz.com/
The site goes by actual units sold, not units shipped.
I view that as more reliable.
The PS2 owned the Xbox, and the Wii is owning the 360.
And a great point about the video game market, the market has grown so much over the past five years that talking about market share is kind of misleading.
They may have went from 0 to 20% (random numbers for example, not factual) of the market share, but the whole market doesn't even need to grow by 20% for them to have 20% and take away 0 customers from the other companies.
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If You Define the Market Broadly Enough, There Are
So defining the market is crucial for defining a monopoly. By manipulating the market definition you can make the definition of "monopolist" whatever you want it to be. In fact, some people use this trick to try to claim that monopolies don't exist, at all, and all antitrust laws should be repealed. I'm sorry to see Tim Lee resorting to this kind of trickery to try to absolve Microsoft.
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