By Heather Clancy and Adam Lashinsky
January 11, 2016

In the 1990s semiconductor giant Intel sold the overwhelming majority of microprocessors for personal computers. Its nemesis was Advanced Micro Devices (AMD), a scrappy Silicon Valley neighbor that railed against Intel’s monopolistic ways. Over time Intel’s dominance waned, but not because of competition from AMD. The one-time also-ran is now largely forgotten. What hurt Intel was a failure to replicate its PC position in mobile devices.

I thought about AMD’s lost struggle for relevance while reading a strained piece in Sunday’s New York Times that argued, I think, that nowadays there is room for strong No. 2 companies in the technology industry. The poster child for this hopeful thesis is Lyft, the mite of a competitor to 600-pound-gorilla Uber in what is awkwardly called the ride-hailing industry.

It’s true that the technology industry favors monopolists. Intel, Microsoft, Cisco and, longer ago, IBM each dominated their markets. Superior marketing rather than differentiated technology often made the difference. IBM wrote the proverbial book on the power of the right message, convincing customers that “no one ever got fired for buying IBM.”

This never meant there wasn’t room for a No. 2, or several of them. What the history lessons tend to gloss over, however, is that technology’s monopolists typically lose out not because the government went after them or a competitor beat them at their own game. Instead, they falter because their success blinds them to where the market is going.

So it went that technology from ARM Holdings, Qualcomm, and others dominated mobile, not Intel’s. Just as AMD never beat Intel, neither Netscape nor Sun Microsystems ever trounced Microsoft. It was Google, which didn’t exist when Microsoft was battling those other companies, that beat Microsoft at a game Microsoft wasn’t playing. Similarly, while Apple’s proprietary personal computer line never seriously challenged computers running Microsoft software, Apple skated to a puck—digital entertainment and smartphones—that Microsoft barely knew how to slap.

Will Lyft ever challenge Uber or even thrive in its shadow? History suggests Uber’s biggest fear should be some innovation on the horizon, not the competitor on its doorstep.

Adam Lashinsky
@adamlashinsky
adam_lashinsky@fortune.com


BITS AND BYTES

China frees up $30 billion to fund local electronics supply chain. Details are sketchy but the money is described by state-run media as a stimulus package for factories and suppliers negatively affected by slowing sales for smartphones and other gadgets, as well as slower domestic economic growth, reports the New York Times. The signing ceremony was attended by giant local tech companies including Alibaba and Lenovo. (New York Times)

Xiaomi misses 2015 sales target. The Chinese technology company, valued at $46 billion, failed to deliver on its pledge to ship 80 million smartphones last year, reports The Wall Street Journal. One particular weakness: a thin patent portfolio. That has hindered Xiaomi in an attempt to make its name internationally known, especially in places like India. (Wall Street Journal)

Apple doesn’t know how many people use its news app. The company admits it has undercounted Apple News readers, although it’s scrambling to rectify the situation. The company has signed up more than 100 publishers for the news app, which is part of its latest iOS operating system. On a brighter note, the Financial Times is reporting that the number of Apple Music subscribers now tops 10 million. Rival Spotify hit 20 million last June. (Wall Street Journal, Financial Times)

Big money manager BlackRock buys 5% Square stake. The revelation came in an SEC filing late last week. The investment is seen as a positive indicator of the newly public digital payments company’s long-term potential, despite recent gyrations in its stock price. (Fortune)

Google and Lenovo are developing a smartphone with depth perception. The as-yet-unnamed product, due this summer, will be the first work to emerge from Google’s Project Tango. The initiative is working on technology that uses a mobile phone’s built-in cameras to gauge distance or detect motion. Both will be useful for next-generation 3D applications. (Fortune)

Tesla will curb autopilot features on residential streets. The electric car company will limit some hands-free driving options in its Model S sedans on roads without a center divider, responding to safety concerns. While in cruise control, the car uses cameras and GPS to stay in lanes but the technology isn’t as effective on poorly marked streets. The decision came soon after some owners shared videos showing “near misses.” (Reuters)


THE DOWNLOAD

Want a robot ‘butler’? Here are some options. Facebook CEO Mark Zuckerberg resolved to build his own home butler with artificial intelligence in 2016. Just “a simple AI to run my home and help me with my work,” he said in a post last weekend on Facebook. Seems reasonable. “You can think of it kind of like Jarvis in Iron Man,Zuckerberg wrote, referring to the computer program in the blockbuster movie. But who said Zuckerberg was the only one who should be entitled to his own personal Jeeves? Here are some of the latest robotic assistants, courtesy of companies ranging from Segway to Ford. (Fortune)



ONE MORE THING

Blu-ray format at a crossroads. The rise of video streaming has taken a toll on physical media—sales of DVDs and Blu-ray discs slipped 12% to $6.1 billion last year. But unreliable and insufficient broadband speeds in many parts of the U.S. are acting in its favor. (Fortune)


This edition of Data Sheet was curated by Heather Clancy:

@greentechlady
heather@heatherclancy.com

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