Microsoft's Perfect Wave
Sep 24, 2012 5:00 AM PT
Sometimes if you stand back a moment, which is what I have to do, you suddenly see broader trends, and what I'm seeing now is that the planets seem to be aligning for a Microsoft decade. However, I'm reminded that the difference between chance and luck is the difference between a hundred bucks landing in front of you unseen and your picking it up.
Microsoft has a huge opportunity coming up in 2013. It really is unprecedented, but this opportunity will require someone willing to ride it -- and Steve Ballmer may not be that guy.
I'll explain and end with my product of the week: the new Kindle Fire HD.
Google's World War II Mistake
If you look back a few years, it really seemed the cards were stacked against Microsoft. Apple was kicking its butt Apple in the consumer market, and Google was kicking it all over the internet. To make matters worse, Apple's CEO had Google's CEO on his board and he was mentoring the Google founders. It seemed like only a matter of days before the two firms would figure out a collaboration that would make Microsoft redundant.
It was kind of like Great Britain looking at Germany partnered with Russia in the Second World War and seeing that the only thing uncertain about the fact it would lose was when.
But then Google decided to rip off Apple. In what is likely overshadowed only by Germany's declaring war on Russia and nearly wiping both nations out, Google decided to copy Apple's operating system and give it away for free.
Suddenly, instead of facing the two facing their most powerful competitors as partners, Apple was asking for licenses to Bing and joining Microsoft in patent pools. Google and Apple became less focused on killing Microsoft and far more focused on killing each other.
Most recently, they've entered into a mutual assured destruction patent fight that is pissing off regulators worldwide, and each is attempting to lock the other out of major markets like the U.S. and EU. There is a growing likelihood that these increasingly pissed-off regulators will punish both companies for not coming to some kind of mutual decision to play fairly. While many of these battles are between Apple and Google proxies, that probably won't change the outcome because the courts aren't stupid.
What is kind of funny is that Microsoft didn't manipulate this. The best guess is that the Google founders and Steve Jobs got in an argument over Linux and Open Source (which Jobs thought were stupid) and the Google founders decided to prove him wrong.
That move rivaled George W. Bush's move to invade Iraq to prove his father wrong -- and in both cases, the opposite occurred. That US$1B Samsung judgment -- which is likely to be tripled -- clearly shows Jobs was right.
Apple's EU Problem
This year, though, Apple appears to have taken a page from Microsoft's "let's do something stupid book" (a book both Apple and Google appear to work from too much). Apple decided to game the EU by putting a noncompliant socket on its new iPhone.
You see, the EU wanted all makers to have the same socket. Apple was given a two-year period to make the transition and signed an agreement that lasted for two years in order to get there. It does have a clause allowing a dongle, which is what Apple has released in Europe.
However, this agreement and this transition period expire at the end of December 2012, and Apple is acting like it just doesn't understand the goal, even though every other phone maker made the switch months ago.
Microsoft pulled a very similar prank back in 2008, and it got hit with a recurring $1.3B, as in billion, fine. Given this dongle prank was done to ensure royalty revenue to Apple -- and the EU regulators know this (they really aren't idiots) -- I'm expecting a legendary fine to result sometime next year.
The EU may not be fast, but it has the concept of huge fines down, and the European Commission, which levies these fines, is also funded by them -- suggesting it is pretty motivated to find reasons to clamp down.
So I think Apple picked the wrong organization to screw with and will likely face an expensive experience similar to Microsoft's.
There is a reasonable chance that Google and Apple will take each other out of one or more markets, and we are already seeing a massive bump in Windows Phone products as OEMs shift to a safer (read less likely to be sued successfully) platform.
Apple is likely to get a pretty significant fine as well, and both firms will likely escalate their battles with each other, leaving Microsoft a clear field to execute its better-together strategy, which is very Microsoft Office like, connecting smartphones, tablets, and PCs to the same consistent experience and ecosystem
Adding to this, iOS 6 is kind of having significant teething problems in a number of areas, and that too helps Microsoft a great deal. ( Samsung is pissing all over Apple's parade at the moment as well).
The weakness is Steve Ballmer, who has a tendency to resource efforts based on what the thinks is reasonable -- not on what it takes to be successful. Steve's history at Microsoft showcases great administrative strengths, but the recurring instances of under-resourcing efforts and the failures that resulted are legion.
If he funds this Windows 8 wave to success, he has an unprecedented wave to ride. If he doesn't, he will miss the biggest opportunity in Microsoft's history, and I doubt he'll survive that. This is likely the biggest gamble in his career, and he won't win it by being timid or cheap.
Product of the Week: Kindle Fire HD 7
A few weeks back, I made the Nexus 7 my product of the week and I used it as my primary tablet until the Kindle Fire HD 7 shipped to me. Though similar in size, these are very different products in use.
The Nexus 7 is much closer to a Microsoft product. It does a lot of things adequately, including gaming, but it is hard to put your finger on clear strengths.
The Kindle Fire HD stands out as a reader, as a streaming movie watcher, and for easy shopping on Amazon, so it is the closest thing to an Apple product, but with an Amazon rather than an Apple back end.
Both are thin and sexy, though I think the back treatment on the Fire is more attractive. Its screen performs better, and the Fire has an HDMI port so you can use it as a set top box for streaming content.
The battery life on both products is pretty amazing, and significant strides clearly have been made here. The thing is that 7-inch products are more about entertainment than productivity, and the Fire hits harder on that vector for me.
I also think it sets a higher bar for the iPad nano or mini expected next month. Both Google and Amazon have made 7-inch real, and both products are credible offerings for the right buyer. For now, the Kindle has the edge for me, and it is thus my Product of the Week.