Each company is using non-core activities to support and drive it’s main business:

– Apple is a hardware company, so it drives hardware sales by giving it’s software and services away for free (or very cheaply).
– Google is an advertising company, so it drives ad sales by giving it’s services and software away for free.
– Microsoft is a software company, so it drives software sales by, erm…

…there’s a problem. I’m struggling to see how Microsoft has anything unique to leverage, or a clear strategy to drive software sales. It doesn’t make hardware to drive usage of it’s key revenue sources of Windows and Office (XBox, mice and keyboards are the only hardware they produce I think, and they aren’t major revenue drivers), it has an unprofitable web strategy and a lacklustre services offering.

How or if Microsoft responds will be very interesting to watch.
Doing the Math: At $29.99, Mac OS X Lion was WWDC’s most expensive product

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