The Great Tech War Of 2012: Ongoing Skirmishes

Fast Company is tracking developments in the increasingly intense competition between Facebook, Google, Apple, and Amazon to show just how fast the big four are creeping into each others' spaces. Here's what changed in the 30 days since we published The Great Tech War of 2012. Check back often. By Kit Eaton 1 COMMENTS EMAIL Print

Pondering the "industry's next Steve Jobs" we thought it was "...Steve Jobs." Now a peek into an upcoming never-before-aired interview with the man himself revealed how he created things: "Designing a product is keeping 5,000 things in your brain, these concepts, and fitting them all together in kind of continuing to push to fit them together in new and different ways to get what you want." Can any one else do that? Can Tim Cook? At least he's made his mark on Apple already, as this week's new board members prove. "All these patent suits could stifle innovation," was our accusation. Samsung doesn't see it so. Despite being slapped with numerous court rulings that it cloned Apple's products, Samsung is aggressively pushing its cases: A patent suit hearing in Australia is now set for March, and the firm has said it will pursue Apple's unlicenced use of its patents in five more nations. An innovative strategy? The Kindle Fire was "a direct assault on the iPad," we suggested. The first reviews hit this week, just as the first consumers are getting their units. Despite generally positive reviews, the Fire is not an iPad killer--

that's roughly the consensus. It's a different beast in a different market, acting as a doorway to Amazon's content and not particularly slick in performance. We said "So each of these giants will deepen their efforts to serve up media--books, music, movies, TV shows, games, and anything else that might brighten your lonely hours," and now today Google may be coming good on its hope to deliver Google Music, an 8-year-late rival to iTunes. Deals with Universal seem in the bag, along with Google+ social sharing. But the other big labels? We're not sure (yet). Taking a moment to talk about HP, we noted it had "tried to take a run at Apple head-on, with its TouchPad, the product of tis $1.2 billion acquisition of Palm. HP bailed out after an embarrassingly short 49-day run and its cost ECO Lo Apotheker his job." Apotheker's succesor Meg Whitman yesterday had to admit to an all-hands meeting at HP that she also didn't know what to do about a potential sale of webOS, because "it's not obvious exactly what to do here." As HP prevaricates, the assumed value of webOS-what's left of Palm--must be dribbling away rapidly from that $1.2 billion total. We called it the Great Tech War, but Mark Zuckerberg thinks differently: "People like to talk about a war...There are real competitions in there, but I don't think this is going to be this type of situation where there's one company that wins all this stuff." Google is, however, "trying to build their own little version of Facebook, he conceeded. And then the search firm promptly tried to compete with Facebook Pages with...Google+ Pages. We imagined Steve Jobs in a face-off with the other three big names in the Great Tech War, but this week Facebook's Zuckerberg had another surprising revelation: Steve Jobs advised him personally on a number of things, including "aesthetics and kind of mission orientation of companies" and "how to build a team around you that's as focussed on bulding as high quality and good things as you are." Since we considered that Amazon's Jeff Bezos was excited about its "new line of Kindle tablets, including the $199 Fire, a direct assault on the iPad" it's become clear that there are other players in this game that change this dynamic. Barnes and Noble has decided it won't be pushed aside by the Fire, and has modified its existing 7-inch Nook Android e-reader into a full-fledged Nook Tablet. It costs a little more, but the specs are very comparable, meaning it's a direct assault on the Fire... Writing about Google's future, we mentioned its "next victim: the TV business," noting Rishi Chandra "described television as the most important mass medium that hadn't yet been breached by the digital world." Since then Google's issued a refresh for Google TV OS, adding in new features and adding polish. But more excitingly, thanks to his biography we know that Steve Jobs himself thought he'd "cracked" the TV design problem...unleashing a slew of new Apple Television rumors. Talking about Amazon's Kindle Fire plans, we wondered how it could "avoid an HP-like disaster," which was already a monstrously big PR issue then. Little did we know that the wound would still be weeping for HP this week: The beleagured firm has said it won't spin-off its PC division after all, and there have been many hints webOS itself is doomed. We realized Apple's proposed Cupertino campus was going to be a big thing for Apple, literally ("a footprint slightly smaller than that of the Pentagon; its diameter will exceed the height of the Empire State Building") and now it's emerged that it's going to be a big feature of Apple's finances: Apple just issued its most recent 10-K filing which reveals capital expenditure for 2012 will soar to $8 billion--$7 billion more than it predicted back in 2009. We noted "In a larger sense, all these companies have devalued the idea of talking on the phone; paying for minutes is pass when you can text, IM, and video chat instead. Now we all just pay for data," but Google's Andy Rubin disagrees. Despite being head of Android, a platform whose app downloads have now surpassed Apple's, he dissed Apple's new app Siri. He thinks, in fact, you should talk to someone via your phone not "to your phone." Since we suggested "don't hold your breath for iTV. Of all four companies, Apple is the one that provokes the most rumors. That's been the case for years," another rumor has popped up. But this time it's

got real momentum, courtesy of an affirmation from the late Steve Jobs himself, and indications advanced prototyping is going on, and the former lead of iTunes is heading it up. With the "iPhone's launch on Sprint in the United States, and Apple's rumored inclination to release a 'lite' version aimed at the prepaid cell market that's booming across the globe," we thought "there seems to be little standing in new CEO Tim Cook's way." Apple's since launched the iPhone 4S, selling four million units in the first three days. Meanwhile, as it reported its finances, a stellar growth of 85% year-on-year disappointed Wall Sreet. Looking at Google's finances, we thought "Meanwhile, even in a tough economy, Google's traditional ad business continues to produce--it's averaging about 30% growth this year, even while its bets on the future, such as YouTube, look increasingly promising." Google since reported its earnings, which blew past expectations with a baseline revenue growth of 37%. It's also released Android Ice Cream Sandwich, coming on the flagship Samsung Galaxy Nexus phone, a phone bound to sell well in Samsung's Korea. We asked "When a company like Hulu goes on the block, these four companies are immediately seen as possible acquirers, and why not?" but now we know the answer: However attractive a target it initially seemed to prospective buyers like these folks, they found nothing in Hulu to tempt them. The firm has withdrawn itself from sale. Whatever will it do next? Since we argued "Microsoft's every move must be viewed as a reaction to the initiatives of these smarter, nimbler, and now, in the case of Apple, richer companies," the time has come for Microsoft to reveal its most recent quarterly earnings. Expectations are that it'll report revenues over $17 billion, up some 6.5% on last year's figure. Will Microsoft achieve this, or will any growth fail to please analysts, as in Apple's case? Since early speculation about Apple's upcoming voice-recognizing app dubbed "Assistant," Apple has decided to stick with the name Siri, and made it one of the cornerstone techs of the new iPhone 4S. It's an attack on Google's voice-activated powers, and it's laden with cuteness and humor that is thrilling users. Siri's got a few limitations, still, but with TLC from Apple in 2012 she'll be much smarter.

Apple is now the first or second most valuable company in the world (depending on the volatility of a given day's market). It's earning that status by doing something almost unprecedented in the history of business: It's a giant that's growing faster than most startups. Every quarter for more than a year, Apple has delivered revenue and profit growth of more than 50%--in some instances it's been more than double. The passing of Steve Jobs doesn't look to slow this momentum at all. Apple's growth is built on the iPhone and the iPad, two products that consistently set the standard for the rest of their product category. (Well, the iPad represents its entire product category--the new chestnut among tech analysts and reporters these days is "There is no tablet market, just an iPad one.") With the iPhone's launch on Sprint in the United States, and Apple's rumored inclination to release a "lite" version aimed at the prepaid cell market that's booming across the globe, there seems to be little standing in new CEO Tim Cook's way. $28,571,000,000 In the third quarter of 2010, Apple booked $15.7 billion in revenue, a record. A year later, it made $28.57 billion--almost double--and that wasn't even during the holidays. Meanwhile, its cash reserves eclipsed the entire net worth of many small countries (and, during the debt crisis, even the U.S. Treasury's). Mark Zuckerberg's social-networking juggernaut is the smallest and youngest of the Fab Four, but that's just what makes it threatening. For starters, it's that rare Shangri-la of Silicon Valley opportunity--a pre-IPO sure thing that will guarantee everyone who enters its doors a stock-market fortune. It's no surprise, then, that Facebook has been steadily siphoning engineering talent away from Google and every other giant in tech. Even more alarming for its rivals, Facebook is already showing monster results in the ad business; revenue for the first half of 2011 reportedly stood at $1.6 billion, doubling the previous year's

figures. Beyond the numbers, talk to ad people and they'll tell you that Facebook is now the epicenter of their digital campaigns, from display ads to brand pages. That's the prelude. The promise of Facebook lies in its servers, in the data it collects about how we interact with one another and with brands. Call it the "social graph," call it the "taste graph" (by aggregating our "Likes," Zuckerberg knows our desires), call it the "activity graph" (by analyzing our check-ins and our statuses, Zuckerberg knows what we're doing). Whatever you call it, don't forget to call it unbeatable.

Why Google Will Win

Its CEO is daring, decisive--and willing to wait for his big bets to pay off. By Farhad Manjoo 0 COMMENTS EMAIL Print Two words: Larry Page. In his short tenure as CEO, the reclusive, socially awkward cofounder has proven to be bold, unpredictable, unapologetic, and--so far--brilliant. Page reorganized Google's executive team, empowering rising stars such as YouTube's Salar Kamangar and Android's Andy Rubin. He killed 28 underperforming projects. Google+, the search company's answer to Facebook, garnered tens of millions of users in a few months' time. Then, he paid $12.5 billion for Motorola Mobility, giving Google access to a trove of patents and raising the possibility of more direct competition with Apple. "There are basically no companies that have good slow decisions," Page told customers at Google's Zeitgeist conference in September. "There are only companies that have good fast decisions." Meanwhile, even in a tough economy, Google's traditional ad business continues to produce--it's averaging about 30% growth this year, even while its bets on the future, such as YouTube, look increasingly promising. 12,500,000,000 Google powered 12.5 billion of 19.5 billion total searches in the U.S. in August 2011, according to comScore. Google's dominant position in search is the platform that lets it aggressively target mobile, social, local, and other new frontiers.

Why Amazon Will Win

Its retail engine keeps humming, and its ambitions feed the beast. By Farhad Manjoo 0 COMMENTS EMAIL Print At first glance, Jeff Bezos's e-commerce giant looks like it would have a hard time stacking up against the other three. Amazon's profit margins are lower than that of Google and Apple, and as a business that depends on fulfillment centers, its capital costs are higher than purely digital enterprises. What it does have is Bezos's almost-Jobsian ability to anticipate what's next and invest in it early. Over the past few years, Bezos bet on e-readers and cloud outsourcing, and each has paid off. Kindle is the dominant e-reading platform, the iPod of the book world, and now it's poised to seize the market for low-priced tablets. The tablets will feed Amazon's thriving digital media businesses--not just books but movies, music, and apps--

as well as make it even easier to buy almost anything through Amazon. Meanwhile, slews of hot startups-as well as the likes of Netflix and even Apple--rely on Amazon Web Services to help run their businesses. At the same time, Bezos continues to invest in e-commerce, buying up any company that poses a threat to his empire (notably Zappos). Analysts predict that Amazon will hit $100 billion in revenue by 2015, 21 years after its founding. Walmart took 34 years to make that mark. $900 Amazon Prime, the $79-a-year subscription service that gives customers free two-day shipping and access to movies and TV shows, creates Amazon addicts: In the year before a customer joins, he spends $400 a year, on average; in the year after, $900. Prime growth exceeds 50% annually.