Think Microsoft and Apple will merge? Think again.
Mr. Fitz-Gerald said Apple and Microsoft will start by collaborating to ward off the threat of Google and Facebook before merging into a single company. He called his theory an “unthinkable but absolutely possible deal,” according to Times of India.
Micrapple Fighting Off Google
The notion that Apple and Microsoft could merge into a single company seems beyond far fetched, but since Mr. Fitz-Gerald is so sure it could happen, let's take a look at what's involved.
Apple and Microsoft both have popular operating systems. For Apple, it's big name OS right now is iOS for the iPhone, iPad, and iPod touch. Microsoft's is Windows, and in its various flavors it runs on desktop and laptop computers, tablets, and smartphones. The operating systems compete directly in the mobile space, and Apple's iPad is even eating into Windows PC sales. Reconciling the bread and butter money makers for both companies, especially since they are competitors, will be a tough prospect.
The deal would require some serious compromise. Someone's operating system would have to go, and considering how big the Windows marketshare is, it's easy to see Microsoft pushing for the end of OS X. Give Microsoft the desktop, and let Apple have mobile.
Killing off OS X wouldn't be as simple as just stopping production and giving out some Windows license keys. Apple has been focused on building its ecosystem, and that includes the Mac and OS X. Without OS X, there isn't any platform for developing iOS apps — that's all done in Apple's Xcode, which is only available for the Mac — and the company's push into the ebook market includes iBooks Author, which is also a Mac-only product.
Microsoft is all about Windows everywhere, and Apple is all about building its enclosed Mac and iOS ecosystem. Those philosophies will be very difficult to reconcile, even with the threat of Google in the shadows.
Apple and Microsoft tend to buy companies for features and services they can roll into their own products. The idea of merging with another company doesn't fit either of their styles. What's more likely than a merger is that both will continue to strategically purchase smaller companies that offer products, services and talent that give them a competitive edge.
We're already seeing that play out. Apple, for example, has bought up companies that can help improve its mapping and navigation services, and Microsoft struck a deal with Yahoo! to improve its position in the online search market.
Facing Off with Facebook
Facebook is a massive data collection machine, as is Google. For Microsoft, this is a market it's trying to compete in, but not so much for Apple. In fact, Apple has openly stated it isn't in business to collect user data.
For both Facebook and Google, end users are the product because the data the companies collect from us is then used to generate revenue through advertising sales. Microsoft is in the same boat, but to a lesser degree. Apple, however, isn't going there, which makes a merger with Microsoft less enticing for both companies.
What's more likely is Microsoft and Yahoo! working even closer than they already are, and maybe that could lead to a merger at some point. Microsoft already tried a hostile takeover of Yahoo!, but since then the two have been teaming up in the Internet search market.
Assuming that proves to be a long term win for both, they could eventually agree to a Microsoft buyout that doesn't include boardroom drama. Considering Microsoft is already getting what it wants from Yahoo! without having to shell out money to buy the company, there may not be much incentive to revisit a buyout offer.
Don't Hold Your Breath for Micrapple
Mr. Fitz-Gerald's Money Map Press bio says he has an accurate track record for predictions as well as decades of experience as a market analyst. That may be, but this time he's wrong.
Apple and Microsoft have very different philosophies and strategies in the tech market, and neither is in the merger game. The two may collaborate at times to better compete against mutual adversaries, but that doesn't make them good candidates for a merger; not now, and not in five or ten years.
No, Micrapple isn't coming. But Microhoo? That's a possibility.