In first year economics we are taught that a decrease in input price through technological advances shifts the supply curve to be able to produce more and ultimately increases the profitability of a company. With the emergence of tablets many companies have analyzed how they can incorporate tablets into their services to not only benefit the customer but also reduce their costs.
Currently, there is a large demand from airline companies for tablets because it allows them to not only reduce a large amount of paperwork that is needed to travel with each flight, but it also makes it faster for pilots to access information and for flight attendants to charge clients for additional items on-board. Delta Airlines alone projects annual savings of $13 million.
This growing market has encouraged fierce competition between Microsoft and Apple. Both companies directly distribute to their airline clients, which results in contracts that can provide a tremendous source of revenue.
Who will win? While Apple is known as the premier maker of tablets, Microsoft has dominated the business consumer segment and holds a key advantage in attaining contracts with large corporations, as can be observed with their deal with Delta Airlines.
As we look towards the future and take into account Apple’s vast adaptability, it would not be surprising for Apple to develop a new product that will allow them to compete with Microsoft at the business consumer segment.
Sources:
http://www.microsoft.com/en-us/news/press/2013/sep13/09-30deltapr.aspx