PS3 Comeback?, OSS Being Silly, Lenovo Is Back, Product of the Week

Last week seemed incredibly long, because we were looking forward to a three day weekend, which, by the time you see this, will likely have gone by incredibly fast. The vendor that builds a tool to address that problem will make a fortune.

Speaking of a fortune, the PS3 hasn’t been doing well and has been losing one for Sony. It has been getting thrashed by the Xbox 360 and the Wii. To add insult to injury, even the PS2 has outsold it — and it’s obsolete. It now looks like Sony is executing a comeback plan, and that the PS3 may be looking interesting again.

The Microsoftpatent thing that erupted last week is still in the news, even though it should now be clear to anyone that Microsoft wasn’t actually planning on suing anyone. Currently, there are a bunch of companies daring Microsoft to sue them first. Maybe it’s time to discuss a mature response to this problem that goes a step beyond “neener, neener, neener.”

Finally, Lenovo is way back in the black with very strong financials and solid growth across the board suggesting, on top of HP’s earlier announcement, that the technology market may be finally heating up. Unfortunately, themarket in general did not agree.

I’ll once again close with my product of the week: a kickass Dell PC.

PS3: Return of the Living Dead?

The PS3 has been a near-dead product since launch. Generating massive amounts of red ink for a company that once was largely supported by the PS3’s parents, the PS3 has been amassive embarrassment so far.

The most embarrassing part isn’t that Microsoft beat Sony — Microsoft had a year lead after all — but that Nintendo’s Wii has been sohugely popular and that it succeeded with some of the same parts, with much less technology, and with vastly fewer features. In effect, Nintendo iPoded Sony (you’d think they would have learned after Apple iPoded them).

This is a lesson that seems really hard for a lot of people to learn: Doing a few things really well at a lower price andkeeping it simple is much more likely to succeed than doing a lot of things, some marginally well, at a vastly higher price.

Well, last weekSony started patching the PS3 to address the “marginal” parts. The PS3 will now upscale PS2 content, DVD content and PC videos. The Xbox 360 did most of this — the obvious exception is PS2 games — and there was no reason the PS3 couldn’t, but Sony had evidently not enabled the capability.

This makes the PS3 a much better set-top box. Sony brought the PS3 into compliance with the Digital Living room Network Alliance, and this means you can get content off your PC more easily. Once again, this closes the gap with the 360, which already was UPnP (universal plug and play)-compliant, and this means it should work both with Sony media centers and with a variety of Windows home servers due to market shortly.

Finally, Sony tied the PlayStation Portable more closely to the PS3, allowing users to pull content from the PS3 to any PSP that is network connected. This typically sounds easier than it is, because getting the PSP onto a secure wireless network isn’t the easiest thing in the world to do.

However, since I use T-Mobile — and Sony has evidently struck a deal with that service first — I’m not complaining (yet). This positions the product as a home entertainment hub and suggests that other devices in the future will be able to pull from it.

As a result, the PS3 ends the week in vastly better shape than it entered it, but it still needs that killer game to really drive sales to the platform. The sad thing is the next killer game I know of is“Hellgate: London,” a PC game that may help the Vaio division but certainly won’t help the PS3.

On the other hand, since I have a PS3, I’m thinking of picking up a PSP now to go with it — because now, clearly, the two are better together.

OSS and Running With Scissors

When people are already concerned with the intellectual property rights and the excessive amount of IP litigation currently in the market, it would seem ill-advised to paint a target on your back and run around saying“sue me.” At the very least, it showcases insensitivity to the IT concern, and it makes the firms doing this look incredibly immature. Granted, I live in California where the unofficial tag line is “Litigation ‘R’ Us.”

As I mentioned last week, Microsoft currently (though I expect, thanks to this silliness, this is being rethought) is not planning on suing anyone. In addition, patents are not copyrights, and people not only can look the patents up — they have. It would seem that the mature response would be to have a university legal department or a series of lawyer volunteers review these patents for validity and then make recommendations as to what should be done about them.

I’m quite sure their response wouldn’t be to run around asking to be sued before the work was done.

Granted, the OSS (open source software) and FOSS (free and open source software) positions on software patents are light on the typical patent defense enjoyed by companies like Microsoft (though it clearly isn’t working as well for Microsoft as it once did), which kind of relies on mutual assured destruction — that is, my patents against your patents.

What that means is that from time to time there will be infringing code that needs to be handled legally. Like everyone else out here, when that happens, you should suck it up and pay the royalty or challenge the claim legally — or stop using the technology.

Let’s be clear: Microsoft is not SCO. It has billions in liquid reserves, and if it puts, let’s say, US$5 billion into making every small OSS company’s life a living litigation hell, then it is capable of doing exactly that. Yes, it would be bad PR, but Microsoft already has “evil” associated with its name, so how much worse could it actually get? Look at its CEO — does “wimp” really apply?

Given Microsoft’s own patent defense isn’t working that well of late and it has its own significant OSS movement now, might it not be wise to see if there issome common ground that can be used to reform patent law — which both sides agree needs to be reformed?

In any case, I think it’s time we brought this all up to the level of adult and worked on fixing the problem rather than simply making it more visible.

Lenovo Reports 625 Percent Profit Growth

Lenovo wasn’t looking too good a few months ago. It appeared to be bleeding badly, and an increasing number of observers were writing it off as the next corporate train wreck. It almost seemed as though the company kicked into high gear just to prove the negative analysts wrong, but itsrecent financial results were just short of spectacular.

Revenue was up 10 percent, but profit was up a whopping 625 percent — take that, Apple — and earnings per share were up 640 percent. In this business, the bottom line is generally much more important than the top — in other words, we live on profit not revenue — and this kind of an increase in profitability will bring tears to most CFOs’ and financial analysts’ eyes.

Bill Amelio, Lenovo’s CEO, has apparently done an excellent job there, and these results — coupled with HP’s — indicate strength in the technology and PC segments that hasn’t been seen for awhile. This was all the result of bringing costs in line while maintaining product quality and customer satisfaction — not an easy task, as Dell could point out.

Overall, nice work — and I’ll bet it pisses IBM executives off a bit that this improvement happened after IBM dumped the PC unit and partially as a result of getting rid of all the old IBM central office systems. Kind of makes you wonder how much better IBM’s own bottom line would get if it were to do that.

One side note — and a caution for Apple: Lenovo’s cell phone business, which isn’t trivial, grew 12 percent, and Lenovo has had a product that is arguably better than the iPhone in the Chinese market since 2002.

Product of the Week

I admit it — I’m a gamer. When someone brings out a box that gets my heart pumping, I can’t help but point to it as product of the week.

Last week, Dell released the dual quad core — that is, 8 cores —XPS 720 H2C. The H2C is for ceramic water cooling. This thing is piano black; it has dual Nvidia 8800s cards with SLI (scalable link interface), blazing fast memory, 10,000 RPM (revolutions per minute) drives, and active lighting.

This last allows you to have the system automatically and visually change the light based on game events — like failing health, which I always seem to forget to watch.

At $6,000, it is out of most of our budgets — but talk about a system to lust after and perfect for “Hellgate: London.”

Rob Enderle is a TechNewsWorld columnist and the principal analyst for the Enderle Group, a consultancy that focuses on personal technology products and trends.

1 Comment

  • Sorry, but if Microsoft’s message was, "You know. We realize that the patent system is broken and things can’t continue as they have been. Here are some examples we *could* technically sue people over. Lets see if we can fix this together.", then it wouldn’t have gotten people pissed off. No, what MS did was fire a shot across the bow of what is currently their most serious and dangerous competition, after a long and productive life as a company that liked to follow such salvos up with shrapnel fired into the competitions sails, if not outright theft, then they said, "Just kidding!!"
    Well, WTF? At best it was provocative. At worst it means that if they intend to use it as an opening to try to reform anything (which I would find about as believable as the plot to the new Ark movie they are going to start showing in theatres soon), it was roughly the equivalent of Black Beard the pirate going, "Oops! Sorry, I know we where going to meet to talk about finding a peaceful existent here, but you know… its just a habit I have picked up."

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