INCUMBENT INERTIA
The tendency for incumbents to be slow to respond to changes in the industry environment due to their large size, established routines, or prior strategic commitments to existing suppliers and customers.
Even though Microsoft was not first to develop the smart phone, it seems to have suffered from some of the general disadvantages of first movers. One of the missteps, the Kin, only lasted in the market for two months before being discontinued. The new software Microsoft is developing, Windows Phone 7, is intended to compete more with the iPhone and Google’s Android; a slow but steady step toward responding to the industry environment.
While the iPhone OS is completely integrated with the hardware, Microsoft still only plans to develop a phone OS and license it out. This really seems like the old tendencies of the giant. License the software and let others worry about the hardware, reminds me of Windows and Dell. This strategy assumes the hardware developers will maximize the software capability. Unlike with computers, where the keyboard, mouse, monitor and other peripherals are fairly standard, cell phones still come in an array of styles. Placing all bets on the hardware developer knowing what’s best to meet market demands is risky, especially when the new OS intends to deliver a new user interface. Will there be synergy between software, hardware and user?
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