The hardware commoditization was a problem in PCs, and the margins were obviously much stronger on the software side, but none of the OEMs managed to get into the OS or productivity software business. Many of these OEMs had powerful brands at the time. Still, their executives mostly focused on cost cutting through outsourcing or consolidation through mergers. Granted the former created even more formidable future competitors for them, but how many executives could forego a steady rise in profits for the next two three years, despite the consequences five years down the road?

The alternative of expanding into software would require a lot of expenses for a few years before any pay off while turning Microsoft into a ruthless competitor instead of a partner. Worse, companies cannot be assured of actually creating a good piece of software or getting the marketplace to accept a new ecosystem based around them while they are incurring such expenses. Moving into different hardware business (LCD screens, DRAM, flash etc) usually means large capital investments, but they are easier to “sell” to your investors as they do not show up as expense, but as assets. Presenting current expenditures as “investment into future” goes down well for Amazon’s investors, but that is a rare exception. Samsung may be insulated from investor pressure, but I am not sure if the executives could still risk a very profitable business by getting into open conflict with Google even if the end result could be even bigger profits later. Look at business articles full of admiration for Apple having the “guts” to immediately cut off the very profitable iPod Mini line with spinning hard disks and replace it with flash based iPod Nano line. If that move took guts at the time, what will it take to tick off Google?