Wednesday, April 2, 2014

Technology Wars with the Same Flavor of the Cola Wars

Technology Wars with the Same Flavor of the Cola Wars
After reading about the intricacies of the century-long Cola war in David Yoffie and Renee Kim’s “Cola Wars Continue: Coke and Pepsi in 2010”, I was reminded of a modern day example of two technology entities that are trying to maintain their market share while constantly trying to one-up their competitor(s).[1] I am talking about the war between Android and IOS mobile operating systems. I can see many similarities between the two case studies. Both the Cola and the mobile operating system wars have a classic theme of the underdog who fought to its way into a market once dominated by a bigger and older company. Coke initially dominated the Carbonated Soft Drink (CSD) market much like Apple’s IOS dominated the smart phone market in the mid-2000. Android, much like Pepsi, used a variety of marketing, production, and technology strategies to fight its way into the smart phone market and offer consumers an alternative. In February 2014, Harry McCracken of Time magazine wrote an article explaining some details about the ongoing war between the operating system developers. According to McCracken, about 80 percent of new smartphones shipped run Android.[2]
Just like Coke and Pepsi, both the android and the IOS mobile operating systems are basically identical. Consumers can perform the same basic functions and use the same applications (Apps) on both systems. Apple developed the apps market but now, according to McCracken, Android offers more apps than Apple. This is very similar to how Coke and Pepsi expanded their product base by looking towards non-CSD products.
Apple’s has closely protected it IOS brand and restricted its use to Apple only hardware. Android choose to align itself with Google who had financially backed its development prior to purchasing it in 2005.[3] Apple has decided to capitalize on its brand loyalty but using the IPhone as the sole interface of the IOS mobile operating system, which worked in the early days of smartphones. But Android must have saw an opportunity to expand its market share by allowing it to be interfaced to competing devices. Android’s source code was ultimately released by Google which allowed the software to be freely modified and distributed to device manufactures and wireless carriers.[4] Android, in turn, franchised out its operating system to gain greater market distribution. This is similar to the relationship described between concentration producers (Coke and Pepsi) and bottlers described by David Yoffie and Renee Kim.
McCracken states in his article that Apple’s IOS and Google Android operating systems have reached a stage of equilibrium, even though Android now offers more apps that Apple.[5] I am sure many of the same people have been saying that about the Cola wars for decades. But secretly, there are CEOs, engineers, and developers at Apple and Google working on the next big move that will expand their share of the smartphone market. Both will likely face multiple renegotiations with cell phone providers and device manufactures just like Coke and Pepsi did with their bottlers. Like Coke and Pepsi, I do not feel like we have seen the last of this competitive rivalry.



[1] Yoffie, David. Kim, Renee. “Cola Wars Continue: Coke and Pepsi in 2010.” Harvard Business School, 771-462. 26 may 2011. Print. 23 March 2014.
[2] McCracken, Harry. “The Smartphone Apps War is Over, Apple Won.” Time Magazine. 21 Feb. 2014. Web. 2 April 2014.
[3] Wikipedia contributors. "Android (operating system)." Wikipedia, The Free Encyclopedia. 2 Apr. 2014. Web. 2 Apr. 2014.
[4] Wikipedia contributors. "Android (operating system)." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 2 Apr. 2014. Web. 2 Apr. 2014.
[5] McCracken, Harry. “The Smartphone Apps War is Over, Apple Won.” Time Magazine. 21 Feb. 2014. Web. 2 April 2014. 

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