Market Structures in Computer Operating Systems
When purchasing a new computer the discussion on which operating system to choose does not usually come up, as there had been a monopoly in this industry since 1985 (Bellis, 2013). Microsoft with its Windows platform is a giant in the computer operating systems industry. The Microsoft Windows market structure began in an oligopolistic market, became a monopoly, and developed back into oligopolistic.
History – Early Years
In the early years of Microsoft Windows, the competition for computer operating systems was limited to MS-DOS, VisiOn, and GEM (Graphics Environment Manager). All of these systems struggled in a small demand market ...view middle of the document...
Instead of decreasing production, Microsoft windows made the decision to release a new version of their operating system to equalize marginal costs and marginal revenues.
History – Market Changes
On January 9th, 2007 Steve Jobs introduced the iphone and the introduction of Microsoft Windows competition (Bohn & Souppouris, 2013). As first introduced, the original iPhone and its operating system (iOS) was behind the Windows versions on feature-by-feature comparisons, but changed the market with new technologies. Originally designed for cell phone use, Apple’s iOS, with its pinch to zoom, touch screen capabilities, and full browser availability became so popular, that Apple released the ipad in April 2010 (Bohn & Souppouris, 2013). This ipad, along with a new iOS, was designed to compete with and possibly replace Windows as the most demanded computer operating system. This competition pulled some demand away from Microsoft Windows forcing them to change their strategy changing the market from a monopoly to an oligopolistic market.
In this new market, Microsoft Windows is forced to engage in strategic decision making to continue its hold of the market share. Microsoft Windows in an oligopoly must take into account Apples iOS in its decision making. As of October 2013, iOS holds the largest market share for mobile and tablet devices at 55%, and Microsoft Windows holds the largest share for desktop operating systems at 91% (NetMarketShare, 2013). Being surpassed by iOS on mobile devices, Microsoft Windows must maintain its dominance in desktop and laptop computers.