The idea that Google, a company with an incredible business model, allowing them to potentially profit off every query they process on the web had to go out and buy a hardware company to get into manufacturing would have been unthinkable before the launch of the iPhone and iTunes App Store.
Consider the facts – since the launch of the iPhone in January of 2007, Apple stock has increased by just under 600% while Google has increased by about a paltry 20% in comparison. Click on the chart below to see the details for yourself.
But lo and behold, we are now comfortable with Google in the hardware market and Microsoft has even launched its own Surface tablet.
Many speculated that Google purchased Motorola Mobility solely for the patents and they have been proven wrong.
The same discussion is taking place regarding the Surface Tablet – some think it is just a move to get hardware partners to wake up.
Others see this product launch as the first step Microsoft will make in becoming Apple.
I am with the latter group and now new details have emerged from Ed Bott who thankfully likes to read 10-Ks and points out the wording in Microsoft’s required disclosure documents suggests the company is working on a tightly-coupled hardware/software ecosystem like Apple and now Google.
It makes a lot of sense – so many sectors of the market see Apple as a major threat – they seem to believe the only way to fight the company is to lock customers into their own ecosystem before they become part of Apple’s.