Amazon vs. Apple vs. Facebook vs. Google
What’s up with these?
They all want to be the uber-company. That is, a company which has a complete user experience with the following elements:
Hardware — mobile device(s)
An app ecosystem
Streaming media
Cloud services—at the least, as a delivery mechanism for the above
And why do these companies aspire to be competitive in all four of these areas? There are two reasons: The first is that a customer who starts using your hardware is more likely to (or may have no choice but to) use your software, and the reverse is also frequently true. All four of these companies (and, yes, Microsoft) have created their own “walled gardens,” which means that once you’ve bought media or apps from them, or uploaded data into their mutually incompatible services, you’re stuck. That’s by design: Having invested so much time and money into their ecosystems, the energy barrier for a consumer to switch to a competitor is so high that it gives each company room to maneuver and, if they have an advantage, maybe even gain market share. Ecosystem lock-in is like a ratchet on the size of your base of customers: Even if you mess up once in a while, it’s hard for your market to shrink, and every chance you differentiate, you can grab a few more people.