Tag Archives: microsoft

History is Not Repeating Itself. And it Often Doesn’t

I tend to believe that the main thinking affecting investors with a negative sentiment in Apple’s long term future is one of historical perspective. Apple with their closed and vertical model lost to the more open model of Microsoft long ago. So the conventional thinking would be that both Google or Microsoft with their more open platform approach will again rise to dominance if history does repeat itself. There are, however, several things I believe are wrong with the thinking that history will repeat itself.

(via TechPinions)

I’ve been trying to figure out for years why so many analysts get this wrong. If you can’t see the obvious diffences between the tech industry of the 1990s and today, you have no business predicting the future of any tech company, let alone Apple.

Also, if you believe that anything Microsoft or Google does is ‘open,’ you’re completely eating their marketing crap and not thinking critically at all.

Which would be fine, except that you’re playing with other people’s money.

Om Malik gets more details about the Motorola acquisition

The high-level talks between Google and Motorola started about five weeks ago. Google CEO Larry Page and Motorola CEO Sanjay Jha were talking directly, and only a handful of executives were brought into discussions. Our sources suggest that Android co-founder Andy Rubin was brought into the talks only very recently.

Like I said earlier, this move was more about defense than any sort of long-term mastermind plan, as suggested by the delusional Dan Lyons.

The short span of time suggests that this was a REACTION to losing the Nortel bid, not part of the Nortel original plans. And the fact that they didn’t even bring in their key Android executive until late in the process suggests that it was, as I said before, a gut reaction, rather than a well-considered tactical move. They are panicking over there, and it’s starting to show. Honeycomb 3.0 was a disaster. Google is gaining no traction in the tablet space. Mobile phone market share growth—the only stat where Google was clearly winning—has slowed (even after rigging the numbers by counting cheap Chinese knockoffs as Android phones.) Microsoft is clearly still trying to muscle its way into the space, and could even still carve a niche for itself, especially if it keeps trying to buy more of Google’s partners. And even with strong market share, Google is still making little money with the Android initiative.

This Motorola purchase could very well backfire on Google, or it could turn out well, if they play their cards right. The problem is, Google has never been any good at the cards.

So it all depends on whether Google is ready to take Android into the territory of a “walled garden” as so many like to call the Apple approach. Drop the other partners, start making “Google” phones for real. Didn’t work for the Nexus series, but then again, the most dedicated Android fans all say that the Nexus phones were better than anything else out there. Maybe they can pull that off, but I doubt it. Not without a retail strategy in place.

That does seem to be the eventual plan, though. The question is, what happens in the short term to Google’s numbers if HTC, Samsung, etc. see the writing on the wall and jump ship before Google can get a decent line of Motorola Android phones going?

And what will all those Google fanboys say when Android suddenly becomes available on only one brand of phones?

The most important thing we can take away from all of this is that Google is not playing on its own turf. It no longer controls Android’s destiny, if it ever did. Apple is still the only company in tech playing offense.

Dan Lyons is delusional—but you knew that already, didn’t you?

And today it all makes sense. Google just sandbagged its rivals. The whole thing was a rope-a-dope maneuver. Google never cared about the Nortel patents. It just wanted to drive up the price so that AppleSoft (those happy new bedmates) would overpay. Today, with the Motorola deal, Google picks up nearly three times as many patents as AppleSoft got from Novell and Nortel. More important, Google just raised the stakes in a huge way for anyone who wants to stay in the smartphone market.

Better yet, Google got its rivals to spend a few weeks defending the practice of using patents to attack other companies. Apple fanboys bent over backward to say that Apple was doing the honorable thing here by suing everyone in sight. All this slimy patent warfare that is so despicable when others do it becomes magically noble when Apple does it. Teaming up with other companies, including the evil Borg, to gang up on Google is all perfectly legitimate, par for the course, smart business practice, blah blah.

So now Google fires back, makes a huge acquisition, gets into the hardware business, buys up the best IP portfolio in the mobile space — and can position itself as a victim that’s just trying to defend itself against this gang of bullies.

And people say Apple fanboys drink the Kool Aid.

Let’s start with “nearly three times the patents.” Yes, Google acquires nearly three times the patents in this deal than they would have from Nortel. They also paid nearly three times as much. (12.5 billion vs. 4.2 billion. AND they wouldn’t have been on the hook for that entire 4.2 billion; they could have joined the consortium and paid a fraction of that.)

Next: “Google just raised the stakes in a huge way for anyone who wants to stay in the smartphone market.” Huh? They’re playing catchup here. Nothing more. Our broken patent system and the recent influx of patent troll companies raised the stakes over a year ago, and Google was losing—badly. Remember, this is the company that claims to not believe in patents; in order for Google to “win” on its own terms, or to “raise the stakes” it would have had to do something that made patents irrelevant, not just drop a bomb of cash to play along by everyone else’s rules.

I’m not faulting Google for playing along, mind you; they really didn’t have any choice. But to say this is some brilliant maneuver is silly. It’s defense, plain and simple. And it’s a risky defense at that, considering how it will certainly strain Google’s relationships with other hardware partners.

Next: “Apple fanboys bent over backwards to say that Apple was doing the honorable thing.” NO ONE, and I mean NO ONE has said that any of Apple’s behavior when it comes to patents has been “honorable.” I’ve seen lots of defenses along the lines of “well, the system is broken, and Apple just has to play within the confines of the system” type arguments. But that’s a long shot from calling any side in the patent war “honorable.”

And finally: Google can “position itself as a victim that’s just trying to defend itself against a gang of bullies.” Yeah, that, or they can position themselves as a bunch of whiny hypocrites who once claimed that patents were evil, but now are going to start using the very evil they once denounced to kill off smaller competitors like Microsoft, HP, RIM. Once again, Google does what is best for Google, and everyone else can go stick it. “Don’t be evil” my ass.

My guess is that most Apple fans will see Google’s move as interesting, albeit unimaginative. They lost HUGE in the Nortel thing, so they turned around and made a somewhat bold and probably not completely well thought out acquisition to remedy their mistake. They dropped a lot more money and added baggage to already strained partner relationships because they don’t know how to play the game properly.

It fits into Google’s usual pattern. Smart people, lousy at politics. The question is whether the long-term benefit of having better legal defenses will outweigh the strain this move will put on partners like HTC, Samsung, etc.

Remember, not too many people were suing Google, anyway. Most of the suing has been between Apple, Microsoft, and Google’s partners. This acquisition doesn’t protect HTC or Samsung at all. If Google starts filing motions to intervene in those lawsuits, than I’ll be happy to call that move “honorable.” Somehow, I don’t see that happening, though.

An Interesting take on the Nokia/Microsoft Deal

I have absolutely no qualms about calling this new regime at Nokia a puppet government. This is far and away the most brilliant move of Ballmer’s tenure. Whether it pays off is another question entirely.

[UPDATE: Former Microsoft exec Chris Weber has just been named President of Nokia Inc. (US). This is a coup, folks.]

No doubt this new deal between Microsoft and Nokia is a lot more about saving sinking ships than taking over the world. And it was certainly the cheapest way for Microsoft to get back into the game. So agreed, it was a great move by Ballmer.

I don’t think long term that the fate of either Microsoft or Nokia will change much as a result of this, but it will get interesting for a while.

My thinking is that this deal will do a lot more to stall Android than it will Apple.

Android:phase one was all about killing off Windows Mobile in order to keep Bing Search from doing well. Phase two of Android seems to be about taking on Apple, though with recent events including this one, I’d say Android still has a lot of others to contend with before it can dream of taking iOS down even a notch.

HP made some interesting announcements this week that lead me to think they have as good a chance as anyone of seriously contending for the few people who want a tablet but not an iPad. Microsoft was getting nowhere, predictably, with WIndows Phone 7, but this Nokia deal will change that, particularly in Europe. With the iPhone on Verizon in the US, and Nokia peddling Windows Phone in Europe, and HP taking whatever is left of the tablet market after the iPad, I’d say Android’s “world domination” scenario is looking more and more like a pipe dream.

And RIM is definitely not coming back. I don’t see how.

There’s still a lot of market share to go around for everyone, but that’s my point. There’s plenty for everyone. We’re far from a two pony race here, folks. Google is fighting a war on several fronts, and at least so far in 2011, it’s losing a lot more battles than it’s winning.

This is the perfect scenario for Apple to thrive. In a world with many choices, Apple always does better than in a world with only two.

Microsoft TV – Another box running Windows (because that’s worked so well in the past)

Microsoft will reportedly announce a new Windows-based $200 set-top box using Windows Media Center as its primary interface, according to the
Seattle Times
. The company, which has been trying to put a Windows box in living rooms for more than 10 years with little success, is expected to make the announcement during the Consumer Electronics Show in Las Vegas.

I can’t believe that Microsoft’s strategy this year is going to be a box running Windows. Again.

When is someone going to fire Ballmer?

And the comparison here shouldn’t be Microsoft TV vs. Google TV. Both products are DOA. The set-top box battle is closer to Roku vs. Apple TV, but even in that case it’s way too early for anyone to have full success with this kind of product.

Jobs wasn’t wrong when he said that this category is never going to be a blockbuster market until someone kills the cable companies. That’s not going to be easy. And whoever does it is either going to have to partner with or buy Netflix.

Apple trading a bit of profit margin to keep its lead in the Tablet market

The iPad’s aggressive pricing has made it hard for rival tablet makers to compete, giving Apple a significant early lead in the market.

“Our potential competitors [in tablets] are having a tough time coming close to iPad’s pricing,” Apple CEO Steve Jobs said. “iPad incorporates everything we’ve learned about building high value products. We create our own A4 chip, software, battery chemistry, enclosure, everything. This results in an incredible product at a great price. The proof will be in the pricing of our competitors’ products, which will offer less for more.”

For their part, analysts were optimistic about Apple’s gross margins leading up to the September quarter, citing growing sales of the iPhone as an upside to the iPad’s lower margins. In August, Gleacher & Co. analyst Brian Marshall stated his belief that Apple’s gross margin profile is in the process of bottoming. AppleInsider contributor Andy Zaky had predicted a Q4 2010 gross margin of 38 percent.

The strategy is clear: Apple is trying to be as cost-competitive as possible, and thus isn’t making as much profit on each sale as it traditionally does. This is the key strategy to keeping the lead in the Tablet market. The low cost of the iPad is making it next to impossible for anyone else to get a foothold. Competitors are being forced to offer smaller, less capable devices for more money, or subsidized with a contract.

Meanwhile, Apple still makes money on every iPad sold, just not as much as they do on a Mac, say.

Still, this is a new thing for Apple, taking less money and selling in higher volume, so Apple is warning Wall Street about this change in general strategy up front. But that won’t stop Wall Street from losing its mind next time the quarterly earnings announcement comes along.

The sky is falling! Apple made more money than ever, but the profit margin is down. Run for your lives!

Contrast this to Microsoft, which makes several products that LOSE money, or Google, who must have lost tons of money on their many failed projects lately, and no one bats an eye.

I’m never going to understand Wall Street.

Thoughts on the new Microsoft Windows Phone 7 ads

Microsoft, ostensibly, is trying to break us of this habit and I say ostensibly because, if you really look at the Windows Phone 7 UI, you’re actually dealing with more swipes and taps than you’d expect given the sparse interface they are presenting. Sure, the phones are fast and the UI, at times, is strikingly beautiful, but it’s still a phone and, as such, requires lots of attention.

Many opinions floating around about the new Windows Phone 7 ad campaign. This article from Mobile Crunch is correct in noting that while the new OS from Microsoft isn’t going to actually solve the problem of the “face down culture” Microsoft is smart to target this audience anyway.

Take a look at the market, and you can quickly see that Microsoft’s best shot for success is with first-time smartphone buyers. Apple iPhone users are loyal the extreme, so much so that they stick with crappy service just to keep their precious iPhones. So you’ll never get them. Blackberry users are hard-core business users, and although Microsoft has a strong customer base there as a company, this new OS is largely lacking the security features and overall business appeal necessary for that group. Android users are mostly one year into a two-year contract. (Remember, the explosive growth of Android in the US all happened in the last 12 months.) So it would be financially painful to leave your Android phone, even if you wanted to. So that leaves people who have never had a smartphone before.

And there are lots of people in that situation. Tech geek that I am, I have lots more friends and family members who don’t have a smartphone than have iPhones or Android phones. And while many of those people haven’t taken the plunge to a smartphone mostly because of the financial commitment (something that Windows Phone 7 won’t help), many have also expressed a discontent with the seeming obsession of people like myself with my phone. They don’t want to “become a slave” to their phones. Many of them avoided getting mobile phones in the first place until it became absolutely socially unacceptable not to have one. These are the “late adopters,” the people who get dragged kicking and screaming into the next technological wonders. And they are a big group.

They also won’t care at all about the lack of “cut and paste.”

So while the ads may be largely deceptive in the sense that Windows Mobile 7 will not fundamentally reduce your “face down” time, from a marketing standpoint, this is actually a pretty smart campaign.

Just as the DROID marketing campaign succeeded by appealing only to the relatively small market of supergeeks (much to my surprise and chagrin), these Microsoft ads will specifically appeal only to the much larger group of non-supergeeks. Like everything else Microsoft has done with Windows Phone 7 so far, I think this is a smart tactic.

Microsoft to use Windows Phone 7 event to show off tablets too? Why?

The Redmond, Wash., software giant is set to hold a launch event on Oct. 11 for new devices powered by Windows Phone 7. And while it was presumed that the event would focus on phones, Neowin.net claims that the event in New York City may also be used to introduce new ‘slate PCs’ that will hit the market this year.

“Microsoft has been working closely with several un-named OEMs to produce a genuine answer to the iPad,” the report said. “The software giant is concerned that iPad sales are slowly cannibalizing Windows sales and eating away at the recent boom in netbook sales.”

Next week’s rumored showcase of Windows tablets coincides with what Microsoft CEO Steve Ballmer said at an event in the U.K. on Tuesday. Speaking to students, staff and journalists at the London School of Economics, Ballmer said consumers can expect to see new, Windows-powered lthis Christmas, according to Reuters.

The report noted that Ballmer declined to say whether the devices would be on sale before Christmas, or who will make the hardware.

Boy, that would be stupid.

Did Apple introduce a new iPhone model when it launched the iPad? No. You know why? Because that would have been stupid.

Windows Phone 7 has enough going against it as it is. It doesn’t need a media blunder to steal any thunder away from the launch event. Microsoft is launching a brand new platform in the most competitive market for any consumer electronics product in history. It is literally three years late in getting back into the game. It’s only managed exclusive deals for its new phones with the weakest of the four major carriers in the US (T-Mobile). Why on earth would they be dumb enough to launch anything else on the same day? Why would they want the press to talk about ANYTHING other than their new phone platform that day?

The goal should be to make every tech news outlet and every major mainstream newspaper and every television news program talk about nothing but Windows Phone 7 for as long as possible. This has to look like the ultimate phone in the universe. The biggest thing since DOS.

Everything I’ve seen about Windows Phone 7 so far actually looks promising. Please tell me Microsoft isn’t going to stumble right out of the gate with a huge media blunder. Tell me Steve Ballmer isn’t that stupid. Someone. Please.

Google Loses Monthly, Yearly Search Market Share

As a result of a new agreement where Bing powers Yahoo searches, Compete is now tracking Bing and Yahoo search queries under the heading “Bing-powered.” Bing-powered searches accounted for 26% of the US search market, with 3.8 million queries.

However, splitting the combined Bing-powered search entity into Bing and Yahoo, it becomes clear that Bing is gaining individual popularity while Yahoo is losing individual popularity. Bing’s 12.4% August 2010 share grew 17% from 10.6% in July 2010 and 37.8% from 9% in August 2009, two months after its June 2009 official launch. Meanwhile, Bing’s query volume grew 20% month-over-month and 45.5% year-over-year.

In contrast, Yahoo’s 13.5% August 2010 share only grew 3% from 13.1% in July 2010 and dropped 12.3% from 15.4% a year earlier. Yahoo’s volume grew 5.9% month-over-month but dropped 7.7% year-over-year.

Google Loses Unique Visitors, Gains Queries per Visitor
Google attracted 154 million unique visitors in August 2010, down 3.1% from 159 million month-over-month and 11% from 173 million year-over-year. Yahoo and Bing both experienced much milder fluctuations in unique visitor.

This is what happens when you take your eye off the ball and start trying to take over every market for every product on earth. You start to lose share in the one area that actually makes you money.

I have no illusions that Bing is going to catch up to Google anytime this century. But any loss of share for Google is bad news.

Notice, when Apple succeeded with the iPod, the iPhone, and then the iPad, Mac share GREW. Apple picks markets that expand the market for all of its products.

Android started off as a way to prevent Microsoft from dominating search on mobile platforms. In that regard, it has been a complete success. But once Google decided to compete with Apple’s iPhone, where it had already solidified a deal for search, Android became a much more risky affair for Google. Now Apple has launched its own ad platform in direct competition with Google, and Bing is an option for iPhone users where it had not been before. Two problems Google would not have had if Schmidt had been content with killing Windows Mobile and Palm and leaving Apple alone.

Some interesting Articles about the Upcoming Windows Mobile | Lukew.com

This guy has written quite a bit about the new Windows Mobile 7 platform. While it would be easy to denounce anything Microsoft is doing in this space, especially considering what Microsoft is up against in terms of competition, I have to say that what I’ve seen so far of this new OS is, if nothing else, very different from what we usually see from the Redmond Giant.

For one thing, it looks like a lot of time and care has gone into this thing from a design standpoint. This isn’t a cheap clone of iOS, the way Windows is a cheap clone of Mac OS, the way Android is a cheap clone of iOS. This is something very different. Still touch-based, still simple and clean (maybe even more simple and clean than iOS), but very different from anything Apple is doing. It even looks almost completely different.

And there’s documentation. Design principles. Human Interface Guidelines. The whole nine yards. They’re putting the hours in over there.

But does it work? Of that, I’m still not sure. I think of projects like Courier that demo very well but upon further inspection make no practical sense, and I worry that what we’ve been shown so far will be better on paper, in short video clips, or at a sales demo than in actual use. Seems like a lot of screen real estate gets wasted; seems like a lot of swiping to off screen content; seems less intuitive to operate for someone who doesn’t know where to tap or swipe.

But I’m going to reserve my real judgement on this one, despite my natural tendency to immediately assume anything Microsoft produces will be crap. The level of thought that appears to have gone into designing this thing suggests that some of the real talent at Microsoft has finally been allowed to float to the top.

All of this could be moot, anyway, if you believe what most people would have you believe, that Android already has the mobile game won by a mile, that even Apple will only have a small percentage of market share in a few years, after the massive Android takeover occurs any minute now.

But you don’t really believe that nonsense, do you?

The way I see it, it’s still a wide open field. Apple will be stuck in a war with the carriers for a while still (many will not want to give up that precious control they love so much, and Steve Jobs is, well Steve Jobs), and that will leave a large chunk of the market up for grabs. Right now, Android is mopping up that market. But for how long? So far they’ve been competing mostly with dead Windows Mobile 6 and non-smart phones. They don’t seem to be fostering long-term loyal customers, the kind of people who stick to one platform for years and years on principle. HP has WebOS, which will most likely go nowhere, but you never know. RIM keeps making the mistake of trying to expand to consumers and is meanwhile ceding ground on the business front to Apple.

Microsoft looks like it’s coming very late to the party with an OS that will likely be under featured on launch. But hey, Apple does that on a regular basis and manages to pull it off, so I wouldn’t write MS out of this story just yet.