Competition in the personal computer market is heating up, even as it becomes increasingly difficult to distinguish just what we mean when we talk about a PC. Airline flight attendants seem to be able to discern the difference between mobile phones and personal computers in their in-flight announcements, but the vendors who make and sell them increasingly can't.
It is precisely this fuzziness that offers Google and Apple a chance to get a leg up on Microsoft, but is also why Microsoft may be able to cement its lead.
Google is clear about its aims: it wants to get users into a browser as fast as possible. Why? Because the more we use the Web, the more likely it is that we'll bump into Google's revenue-generating services.
While this started as a PC initiative for Google with the Chrome OS, the Chrome browser, and other projects, Google has kicked it into hyperdrive with its increasingly popular Android mobile operating system.
Apple, for its part, is equally clear about its aims: it wants to get users into iTunes or its App Store. Why? Because for all the money it makes on hardware like Macs and the iPhone, Internet-scale revenues derive from such services that aggregate and distribute digital goods.
Apple's strategy is bidirectional: its Macs drive adoption of iPhones, and the iPhone drives sales of Macs. But mobile is what makes it hum.
Microsoft, however, has been less clear about its aims, particularly with the traditional desktop. It wants people on Windows...why? Well, because Microsoft earns a license fee for every copy of Windows sold./p>
This has historically been a home-run strategy, but it may be a decreasingly defensible revenue model in a world conditioned by the Web (and Google) to expect software to be free.;p>
Neither of its primary competitors charges for the OS, which will eventually call into question Microsoft's practice of doing so.
Of course, Apple's OS X can't be easily divorced from Apple's hardware, making it arguably a much more expensive OS than Microsoft ever dreamed of selling. But Google? It's serious about giving away Microsoft's business.
Is Microsoft doomed?
Of course not. Any company with billions in profit each quarter can afford to spend its way into a winning strategy. Microsoft has already sold 90 million copies of Windows 7, suggesting that its demise will be greatly exaggerated for some time to come, especially as its market share is again on the upswing with Windows 7.
Even so, I suspect the future of Microsoft's "desktop" OS business is going the same direction as Apple's and Google's: mobile.
Mobile gives Microsoft a fresh start with lots of room to grow. It also gives it an effective way to extend its brand into others' platforms, as its Bing search growth on Apple's iPhone could signal, while simultaneously letting Microsoft experiment with new business models that don't threaten its traditional licensing-based model (as cloud computing does for its server and "desktop" businesses).
Perhaps most importantly, and this is equally true for both Google and Apple for their respective environments, mobile allows Microsoft to innovate the Windows user experience. Apple has started to extend the iPhone experience with its iPad, and I suspect we'll see Microsoft do the same with Windows Phone 7. Microsoft's consumer and enterprise customers will have little appetite for a radically changed "desktop" experience...unless they first grow accustomed to it on their phones.
For each of these three major OS vendors, the nature of the OS, and its associated business models, is changing rapidly. Mobile, however, holds the key to each company's growth, and may signal convergence on a new way of monetizing an OS: app stores, advertising, and other online services.
But all delivered on a mobile device that looks less and less like a phone and more and more like a PC...without actually being one.