[OPINION] Not too big to fail: How the biggest tech giants could collapse

by | Jun 23, 2021

Editor’s Note: The following is a repurposing of a random conversation that started in Techpoint Africa’s team WhatsApp group.


Oghenekaro Obrutu (Techpoint Product Lead) asked:

Of the tech giants (Microsoft, Amazon, Google, Apple and Facebook). Who do you think is most likely to collapse first? (Think like Yahoo, BlackBerry, Kodak etc).

P.S: I know there isn’t a huge chance of this, but just rank them in order of likely to unlikely (to collapse). Just to get an idea of how solid they really are.

Team responses ensue…

Then comes Oghenekaro’s answer, increasing order of unlikelihood:

Facebook

Facebook
Facebook CEO, Mark Zuckgerberg

Facebook has the weakest business model in my opinion. If there’s a mass exodus from Facebook, Instagram and WhatsApp today due to cancel culture or something (and there are several competing products rising in their space right now), I don’t think they’ll survive.

They basically have only Oculus to rely on for revenue, and even then, that won’t cut it as profit margins there are quite slim.

But that’s not even counting what’s more likely to kill them — government regulations.

Verdict: Probably a very quick death for these ones

Google (Alphabet)

logo google sign trademark trademark image
Photo on Photostockeditor

More than 80% of Google’s revenue is still stuck in Ads. With regulations on cookies and tracking constantly biting at them, and the fact that they have offered too much stuff for free, it’ll be hard to make up that 80% in any reasonable time if for some reason they can’t advertise.

Verdict: Most likely a slow death

Apple

Apple iPhone 6 iOS 8 UHD

They have been desperately trying to diversify incomes recently but almost everything they offer is still closed in their ecosystem. Their major attractions are quite fickle if you think about it.

First one is their ecosystem, which is pretty great because all their stuff works well together.

But if one of their products fails or is out innovated by someone else, they could lose many users across all their products, because their other products won’t play nice.

Second attraction is their social allure and brand, but a brand can go from 100 to 0 pretty quickly (remember BlackBerry was king of social proof before they went down).

If for some reason their devices stop being trendy or there’s a new trendy thing, then they lose almost all they have.

Verdict: Slow or quick death, it depends.

Amazon

Amazon
Photo by Rich Bamford https://www.flickr.com/photos/94006295@N08/29934487872

I consider Amazon to be tied with Microsoft for least likely to collapse for similar reasons; their money primary comes from governments, institutions and massive enterprises (including Apple).

What’s common with huge organisations is that they are extremely resistant to change, so even if a better technology comes along it’ll take a while before Amazon Web Services (AWS) starts losing business.

Running nearly half of the entire internet is quite a feat.

Oh, and there’s still their mainstream Amazon.com, where they have every other person’s business (hardware, ads, software, even on demand streaming and more).

Verdict: I don’t know how these ones can die.

Microsoft

Microsoft Nigeria

Similar to Amazon in the enterprise space. Add that to their Surface line, Windows, Xbox, Office and whatever else they’ve got running.

Verdict: Like Amazon, I can’t predict how they can die

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Ben-Orupete Oreva
Ben-Orupete Oreva
7 months ago

This is nice. But I don’t think Google’s position is fair. Over 2 billion smartphones run on Android OS. Their ecosystem is tight enough and people will pay to use their services if they put a price on it

Oghenekaro Obrutu
Oghenekaro Obrutu
Reply to  Ben-Orupete Oreva
7 months ago

I do agree that the Android user base is huge and it could potentially yield massive returns outside of ads for Google, but so far, it’s still yet to.

Something I think can be considered here is that most ‘Android’ users aren’t using Google hardware but rather the likes of Samsung, Xiaomi and others, and those companies are aggressively pushing their own competing products ahead of what Google has to offer (e.g Samsung Pay, Mi Cloud and more). This just makes it more difficult for Google in areas like brand loyalty and the ability to create a cohesive ecosystem, hence impacting how much they can charge for services.

Ben-Orupete Oreva
Ben-Orupete Oreva
Reply to  Oghenekaro Obrutu
7 months ago

That’s true. Most of the hardware manufacturers have their products at the forefront and it will impact Google’s ecosystem play. I’d still put them above Apple though😌

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