In an earnings call for the 4th quarter of 2010, Steve Jobs addressed a long standing strategic difference between Apple (AAPL) and its major competitors, namely Google (GOOG) and Microsoft (MSFT). Jobs discusses Google and Microsoft's characterization of their software as "open," meaning it can run on a variety of devices, and Apple's software as "closed," it could only run on Apple devices. Job's re-characterizes the difference as "fragmented vs integrated." He argues that the real issue is what's best for the customer, and that means taking charge of all aspects of the device, including both hardware and software. "When selling to users who want their devices to just work, we believe Integrated will triumph Fragmented every time." And Apple's strong results since the call provide ample evidence for Job's case.
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Microsoft may be shifting towards Apple's strategy. According to a recent report, at an event on Monday, it will unveil a Microsoft-manufactured tablet that would run on the soon to be released Windows 8 operating system. It seems Microsoft's inability to gain a meaningful share of the mobile device market has prompted it to take a more integrated approach. But, Microsoft has not abandoned its open approach either. It will continue to license Windows 8 to hardware manufacturers. Microsoft seems to have a new strategy for gaining market share in mobile devices: open and integrated.