In technology today, it feels as if every giant is expected to be great at any new piece of technology. Whether mobile, video services, email, music software — you name it — Google, Microsoft, and Apple are constantly fighting for a lead. In the following video, Motley Fool senior technology analyst Eric Bleeker explains how being a dominant platform allows companies to profit without the distraction of becoming a top dog in yet another field. Take Facebook and gaming, for example. By creating a platform for games and a payment system, the company is able to collect 15% of its sales from Zynga's efforts creating compelling games.
We're now seeing a similar situation with Apple in search. Chinese search leader Baidu has been unable to gain traction with its own mobile operating systems. Instead, the company has begun offering a "cut" of search revenue to handset partners. The result is a default position in 80% of branded Android phones in China. Likewise, the company has now struck a deal where Apple receives revenues for searches on its devices.
Eric says this shows the power of Apple's ability to leverage its strong negotiating position to collect revenues on a platform. While some investors have clamored for the company to take efforts in digital video — like buying Netflix — Apple's position is much stronger staying neutral between content providers and creating the dominant television platform. Apple seems to be the only tech company to get the point, that sometimes less is more.
Apple and Baidu have teamed up to battle Google, but the fact is they're all just pieces of the largest technology revolution in history: the mobile revolution.
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A version of this article, written by Eric Bleeker, originally appeared on fool.com
