Communications and Technology Blog - Tehrani.com - Ultrabook Archives

With Tablets and Smartphones Eating the PC, What Can Microsoft Do?

2013-04-11T21:48:24Z

These are very dark days for people who work for many divisions of Microsoft as tablets and smartphones have absolutely decimated the PC market as evidenced by a decline of 14% in sales of PCs last quarter. This news comes on the heels of the Windows 8 launch, the new OS which fuses the best of the tablet and Windows experience in one platform. The only problem is the new OS with all its marketing and slick new form factors isn’t cutting it, as consumers gravitate towards smaller screen devices.

Expect many calls for Steve Ballmer to be fired and when you consider how many markets Redmond has squandered since 2000 you could make a solid case for pushing him out. Tablets, music, cloud and smartphones are just a few. 11 months ago, one reporter had the foresight to say he should have been fired already.

It’s worth noting that Samsung has been one of the few companies besides Apple to capitalize on tablets and smartphones and other companies in this space which enjoyed leadership positions such as Blackberry, Nokia and HTC are also struggling.

Redmond will definitely see sales from corporate customers who upgrade PCs from XP and other operating systems to Windows 8 and of course its developer, server and Exchange lines of business are in no jeopardy at the moment.

Still, you have to wonder why the company isn’t leading the market in app sales on Android and iOS. It is common knowledge that users want Office on their iPads for example… What is the delay? The latest rumors say the market needs to wait a full 18 months from now to see its debut! The company makes games as well so why not try to dominate mobile devices with your game development?

The additional challenge here is Microsoft already tried to fight Apple with the unveiling of Windows 8 and it seems this isn’t a successful strategy. In fact, this polarizing OS seems to be pushing people to tablets and smartphones.

This strategic shift in the market requires Microsoft to refocus like it did when it missed the internet in the nineties – but this time, Google and Apple have precious few vulnerabilities to go after.

When Borland owned the desktop database market and could charge $650 for its software some decades ago, Microsoft stunned the world by rolling out its Access competitor for only $99. When Netscape owned the desktop browser market and charged for its software, Microsoft rolled out Internet Explorer for free.

This time, pricing isn’t going to help the world’s still-dominant OS provider attract massive amounts of new customers. Innovation is about the only thing left to try and they are losing the innovation battle to Android and iOS. The scary thing is Adobe Flash for the moment is still a major reason to us PC products but once HTML5 gets established, PC sales could slow even more.

Microsoft needs to do something to change this momentum and it needs to do it fast as not only are customers signaling discontent but financial analysts and investors are joining in.

Learn more about HTML5 at the ultimate HTML5 developer conference DevCon5, July 24-25, 2013 in NYC.

Windows 8 Relegated to Budget Status?

2013-04-04T18:01:23Z

Microsoft seems to make an OS you HAVE to buy while Apple makes an OS you WANT to buy

The Microsoft Store has good news for people waiting to pick up a new Windows 8 machine… Lower prices on relatively new hardware. Interestingly, only a few specific models saw their prices decreased. Some believe it has to do with specific models which didn’t sell well while others think the challenge is Windows 8 itself. Certainly PC manufacturers haven’t been shy in telling the world that Windows 8 is unsatisfactory so one imagines the problem here is a lack of purchaser enthusiasm for the new OS.

Before I go on, it’s worth mentioning the savings on at least one machine is a solid 30% - specifically the Toshiba Satellite U95T-S2130 convertible Ultrabook is now priced at $799 – from $1,149. The ASUS TAICH 21-UH51 dropped merely $100 from $1,299 to $1,199 – this Ultrabook/tablet hybrid with its dual-screen design is likely too expensive to drop further in price.

It’s worth pointing out this news is a serious sign of weakness for Microsoft who is losing marketshare in the tablet and smartphone space and for now mindshare in the PC category.

Then again, for Microsoft and its partners, bare bones margins have been the norm while Apple was always able to charge a premium for their products.

It seems Microsoft is getting known for making an OS you HAVE to buy while Apple makes an OS you WANT to buy.

The irony is that from a hardware standpoint the difference between Apple’s products and the latest crop of hardware running Redmond’s software is very small. This may tell us the problem with consumer and business adoption of these new machines definitely has to do with Windows 8. Interestingly I am beginning to get backlash from pro-Microsoft readers whenever I mention something negative about Windows 8. This is new for me. It’s something I am familiar with hearing this sort of feedback from Apple loyalists, not Microsoft. This may tell us that Windows 8 is just a polarizing OS which may require time for the masses to accept.

With these new “budget” price points however, people on the fence may be tempted to give the new OS a spin.

Smith Micro Extends MDM Standard to Chipset Level

2013-02-28T14:45:02Z

Smith Micro's main message at Mobile World Congress 2013 was that wirelss broadband connectivity is going to become easier. Carla Fitzgerald, VP Marketing Wireless & Mobility explained how the company has worked with chipset vendors to get its QuickLink MBIM Middleware installed at the chip level in various computer systems.

She said, "Connectivity originally started as an application where the user was once forced to be an IT administrator." She continued, "But now with standards like MBIM and Smith Micro working with chipset vendors, connectivity will be automatic regardless of operating system."

The benfits for users will be the ability to have backward and forward compatability across not only operating system versions but operating systems as well meaning you could take a USB stick modem and seamlessly have it work regardless of your system. Currently the middleware supports just about anything you would want to use such as Windows 7, Vista, XP, Mac OSX and Linux.

There are obvious benefits for carriers as well since this advanacement "lubricates" the system meaning it should be simpler for users to connect to networks regardless of the device they purchase.

In Windows 8, Microsoft Has a Winner

2012-12-05T21:23:50Z

Samsung has a winner with its Microsoft Windows 8 powered ATIV Smart PC Pro 700t (XE700T1C, a device which is part Ultrabook and part tablet in one. I consider it to be the perfect combination of both worlds, allowing users to do everything they need with a single device. There is no longer a need to wait till you get to a secondary computer to do “real work” as this one does all the things you might need. It has a full array of ports allowing you to plug in a memory stick or hard drive. It runs Flash in its browser allowing you to do all the things which iOS will not. How many tens of thousands of iOS apps are just poor renditions of what webmasters used to create using Adobe’s Flash after all?

Then there are all the PC applications like Microsoft Office which just run – no new version is needed.

TMC’s Tom Keating just reviewed the ATIV Smart PC Pro 700t and he loves it. I have used it for a while as well and am just as impressed. This computer is fast – it brings up web pages a tad more quickly than a fourth generation iPad! And the screen is about 98% as bright as the Retina display on the iPad. There are a lot less pixels on the Samsung but the difference is indistinguishable to Tom and me in picture after picture we examined.

Perhaps the biggest complaint I have for Samsung is the name – it’s too long (I have to look it up each time I need to reference it).

The biggest challenge with the software is the switching between user interfaces – Windows 8 Metro and the traditional desktop we are familiar with in Windows 7. It gets confusing. Moreover when you want to run Flash in Metro, the site has to be approved by Microsoft first. So you have to leave the “easy touch” interface and then come back if you want to watch a video on a site like TMCnet.

There are a number of reasons why Apple is beating Microsoft when it comes to mobile – design is one of them and so is the slickness of the UI. But one less obvious area where Apple is winning is simplicity. Microsoft’s problem is still that things are too complicated and the learning curve is higher than what is needed on an iPad or even Android device.

And this is where Microsoft has to continue to focus. I love having less devices – I carry an Ultrabook, iPad and iPhone to conferences and meetings and would like to ditch one of them. The corporate security and other business networking features of Windows 8 will likely give this and similar devices a huge push in the enterprise – but ease-of-use is still an area of improvement for Redmond. One which it has struggled with for years. With Windows 8 and Metro, it is likely about 80-85% of where Apple is with iOS. The pivotal question is whether consumers will weigh all of the amazing features of Windows 8 which Tom details quite well more than the 15-20% usability gap which is likely always going to remain when a device is running 2 separate interfaces.

If you're wondering what Tom might think about all this – fear not, I asked him for his closing arguments:

The dual-mode Metro/Modern UI + Desktop interfaces may indeed cause some usability concerns as you mention Rich. However, there is always a trade-off of features vs. usability. It is true Apple has made iOS very touch-friendly, but you cannot run the full Mac operating system or the full Mac applications. Microsoft has melded the desktop operating system with a touch-friendly operating system. Switching between the two takes some getting used to, but I would not prefer a single unified user interface. Some things are better suited for touch (Metro/Modern UI) and some things are better for desktop mode like Photoshop, full Outlook application, Windows Explorer, etc. If Microsoft had tried to kludge the desktop UI to all be in Metro I would have never switched to Windows 8. I guess you could say I like that Microsoft gives me the freedom of choice, while Apple has always been a control freak limiting choice. Sure, an easy to use UI is great, but when you have to compromise on so many features, for me it’s an easy decision - Windows 8 is the better choice.

Eventually "markets" decide "market share" but it does look to Tom and I like Microsoft has a winner with Windows 8 and the Samsung ATIV Smart PC Pro 700t is a very powerful yet portable device which is free of most every compromise made on iOS and Android devices.

A Little Heavy Chrome

2012-11-01T15:49:07Z

Google has a new heavy metal-based TV commercial which has a Halloween undercurrent. The ad touts the $249 Samsung-made Chromebook as being smaller, better on batteries and good for “scaring off viruses.” It goes on to discuss its lack of phantom files and crashes. Although the video has had under 100,000 views I can see it going viral and perhaps adding a zero to that number.

What is unclear is how much demand there will be for a cloud-based laptop which seems to ape the look of an Apple computer at a fraction of the price.

It’s worth noting the device has seen good reviews and includes so many free services it actually gives you $20 back after you outlay your $249!

If you haven’t been paying attention, this is one of the most exciting times I can recall in the hardware wars. Amazon has come on strong with its Kindle Fire HD and is blasting the iPad Mini – as being inferior. Then there is Samsung who recently released their 5.5 inch Galaxy Note II which is an awesome phone/tablet hybrid. Throw in the Galaxy S3 and the new HTC Windows Phone 8X and it becomes obvious that innovation is alive and well.

As you can see, manufacturers are serious about mobile and are fighting fire with fire. And if consumers continue to lust after and purchase them as fast as companies can make them, the tech market should see their balance sheets back in black in no time.

For Microsoft Surface, Is it Mission Impossible?

2012-10-16T15:22:53Z

Microsoft, here is your mission. Take a device which has become synonymous with the term “post-PC era” and topple it. Go up against a company which is considered cool and somehow transform your image to be as cool. If you decide to accept this mission you must take your reputation for developing bloated operating systems and software and scale it all down to run in a tablet form factor where a person can use the device for an entire day without recharging. Furthermore, you have to eliminate the blue screen of death or BSOD – the tablet has to work. It must be as reliable as a cell phone. It can’t crash. Moreover, it can’t have monthly updates due to security holes which slow the device to a crawl. There is no possibility to run antivirus software constantly – the device has to be protected inherently but at the same time open in-contrast to Apple.

Oh yes, and it needs to be cheap – as cheap as the iPad. Moreover it has to unseat the iPad which is now being given away to restaurant and hotel customers by the thousand.

It must also have an app ecosystem in the hundreds of thousands and it needs to be so easy to use that the user manual doesn’t even need to be printed. It must seamlessly integrate music, movies, Microsoft Office, work with enterprise device management systems and be a pleasure to use.

Microsoft knows the mission and now we know the price of the Microsoft Surface tablet. As many predicted, it will be $499 for a 32 GB version which is the same price as the 16 GB iPad. Before you get very excited about all the spare memory you will have, it is worth considering the Microsoft Windows RT could require a great deal more space than Apple’s iOS.

The keyboards are additional and cost $119.99 or $129.99 – obviously Microsoft thinks they are worth the premium price and perhaps they are, especially if surface is a laptop replacement. The Surface marketing campaign ad is really great – very youth oriented with awesome music but it still doesn’t show how the product works. But it does inspire emotions of passion, excitement and energy. These are exactly the feelings the company needs potential consumers to experience.

Recently I wrote a piece critical of Steve Ballmer’s Apple fighting strategy and I still believe I am 100% right in my assertion that he didn’t outline the risk inherent in the company’s new direction. But I am sure in response he would say the Surface line will be a success and will inspire people to buy more Microsoft products such as phones and Ultrabooks.

From Redmond’s perspective there is no choice but to drive forward. I am 100% sure the pricing so far is right on – you had to go head to head with the iPad. And the commercial is exactly right – it hits the demographic squarely.

Will all this be enough to sell the 3-5 million Microsoft hopes to sell in its first quarter? We’ll have to wait and see if customers accept their mission to purchase so many of these new devices.

Major Flaws in Ballmer's Apple-Fighting Strategy?

2012-10-11T16:33:06Z

It really is shocking that Apple has pulled so far ahead of every other device maker with designs that are more art than technology focused. For those of you familiar with Bang & Olufsen products (BeoSound 8 pictured above) you know in some ways Apple’s designs are a copy of this iconic audio manufacturer meaning Apple didn’t entirely invent cool looking consumer electronics devices and others should be able to compete effectively in the space.

I am sure Microsoft agrees but as they’ve watched Apple become the cool and fast growing computer company they used to be, they determined they need to be more like Cupertino. This of course is the reason the company decided it was more important to design new hardware than keep their partners churning out directly competitive products happy.

With the Microsoft Surface Tablet introduction they told the entire ecosystem at once – you suck.

Steve Ballmer’s recent shareholder letter spells it out further. In it he says:

There will be times when we build specific devices for specific purposes, as we have chosen to do with Xbox and the recently announced Microsoft Surface. In all our work with partners and on our own devices, we will focus relentlessly on delivering delightful, seamless experiences across hardware, software and services. This means as we, with our partners, develop new Windows devices we'll build in services people want.

The key word above is “delightful.” Whether buyers consider this upcoming tablet to be accurately described by this term remains to be seen but the comment reinforces the “you suck” comment to partners as it suggests they can’t build such products.

Continuing, Ballmer says:

A great example of this shift is Windows 8. Windows 8 will come to market Oct. 26, 2012, with beautiful hardware that will light up with our consumer cloud services. Windows 8 unites the light, thin and fun aspects of a tablet with the power of a PC. It's beautiful, it's functional, and it's perfect for both personal and professional use. Xbox Music, Video, Games and SmartGlass apps make it possible to select a movie from a PC, start playing it on the TV, and finish watching it on a phone. SkyDrive, our cloud storage solution, effortlessly connects content across a user's devices. Bing's powerful search technologies in Windows 8 will help customers get more done. Skype has a beautiful new Windows 8 app and connects directly into the new Office.

The idea here is to use Skype and Bing as differentiators against Apple. The problem is how is Microsoft better able to integrate search and Skype than Apple? To keep its value, Skype has to run on Apple hardware and if its inferior on Apple’s platform, users may just switch to FaceTime which can easily be augmented to compete with “Skype Out” and other features.

Moreover, I have used SkyDrive and the product needs work. It seems to have been designed by sadistic engineers. Moreover the duplication between LiveMesh and SkyDrive was beyond confusing and multiple URLS made the experience really painful for me as I tested the service. If Microsoft is serious about the cloud they need to make life easier for users.

Here is another salient comment from the Microsoft head:

Fantastic devices and services for end users will drive our enterprise businesses forward given the increasing influence employees have in the technology they use at work — a trend commonly referred to as the Consumerization of IT. It's one more reason Microsoft is committed to delivering devices and services that people love and businesses need.

Yet another statement of the inferiority of the current hardware on the market.

If we are to assume that Surface is a hit and Microsoft starts to regain traction – two big ifs, the job will only be partly done by Redmond. You see the company needs to regenerate excitement around its brand. Xbox Kinect is a spectacular product but doesn’t create the excitement of Apple. Ballmer needs a cult-like following for Surface and they will likely have to create a Surface phone which needs a similar following. And from there the company is going to have to make sure they push the Ultrabook market which has no identity despite many of them – especially those from Asus being incredible machines.

Ballmer sums up the opportunities which lie ahead for Microsoft as follows:

Developing new form factors that have increasingly natural ways to use them including touch, gestures and speech.
Making technology more intuitive and able to act on our behalf instead of at our command with machine learning.
Building and running cloud services in ways that unleash incredible new experiences and opportunities for businesses and individuals.
Firmly establishing one platform, Windows, across the PC, tablet, phone, server and cloud to drive a thriving ecosystem of developers, unify the cross-device user experience, and increase agility when bringing new advancements to market.
Delivering new scenarios with life-changing improvements in how people learn, work, play and interact with one another.

The challenge here is just how generic these talking points are. They can apply to Google, Apple and Samsung as well. The monopoly position which Microsoft enjoyed is quickly eroding because there are hundreds of thousands of Android and iOS apps on the market. To make matters worse, as the world moves to the cloud, HTML5 browsers will allow cloud-based apps to be nearly as or as powerful as native OS apps.

Then there is WebRTC which will allow every browser to become the equivalent of a Skype client meaning any web user can communicate using voice and video with any other web user and no specific software will be required.

In short, this annual report letter from Microsoft is excessively generic and doesn’t explain the risks to Microsoft’s client business if they aren’t able to execute a successful tablet and mobile strategy. Moreover, as the cloud grows in importance they risk losing even more of their lock on the end-user client market.

Then there is the store strategy. It is apparent Microsoft needs bustling stores to compete with Apple and this means Surface has to be a hit and be followed up by killer phones and Ultrabooks people stand in line for.

Ballmer infers the future will be "delightful" but there is no telling if consumers will buy into this strategy. We should know more after the Surface Tablet becomes available. If it is a flop, it may not be a bad idea to start acquisition discussions with Bang & Olufsen - at least this way Redmond can't be accused of copying Apple's designs.

See an Ultrabook with Touch and Sensor Tech

2012-09-21T20:05:19Z

Although this video from Intel is a few months old it shows developers how they can develop touch and sensor based applications for Metro and desktop mode on the company's new Ivy Bridge-based Windows 8 Ultrabooks. Perhaps most interesting is the accelerometer demo which seems clunky on a laptop but one imagines with a removable keyboard this feature will be as useful as it is on tablets and smartphones.

I watched with some interest the ability to specify objects on the screen for pinching and zooming - I suppose Apple's attorney's may have some comments on the matter for Intel.

What the Auto Market can Teach us about Mobile

2012-08-14T21:23:55Z

Have you ever heard from someone that they don’t like Starbucks coffee but they like the experience at the store so they go in, sit down and buy the coffee? It is quite a testament to the world’s largest coffee chain that they are able to lure in customers who don’t like their premium-priced primary product but are instead attracted to their comfortable seating areas and atmosphere replete with cushy couches and free WiFi.

The point here is people buy things for subtle reasons they may not consciously realize. But how you may ask does this translate into tech and cars?

Recently Rob Enderle , President and Principal Analyst, Enderle Group wrote about the patent lawsuit between Apple and Samsung and related the pace of automotive innovation and competition to what is happening in the mobile space.

And he got me thinking about the similarities as well and moreover how the segmentation in one space can potentially be translated into the other.

Brand/Image: For many, Mercedes and BMW are the only cars they will purchase because they are considered top brands but are also priced reasonably enough when compared to a some even higher-end product lines like Bentley or Maserati. Both German manufacturers have done an incredible job in automotive design and performance and to some degree safety. BMW’s “Ultimate Driving Machine” moniker generally tells you the car is more performance oriented while Mercedes is more slanted towards luxury. Audi is similar to Mercedes in its brand positioning.

Of course Apple comes to mind when looking at the top brand in the consumer electronics world. Microsoft has become a strong brand for the older generation – perhaps most like Cadillac. It should be noted this isn’t a great place to be. Nokia may be closest to Chevy or GMC in that its brand was widespread and oftentimes a strong player in the less expensive areas of the market.

Performance is an important part of the automotive market and most car brands have their halo car. Chevy has the Corvette which has helped breathe excitement in the brand and Dodge has the Viper. Nissan has their GT-R and Lexus has their $375,000 LFA made of carbon fiber. BMW has an entire line of performance cars while Mercedes has their AMG brand and Audi has their S and RS cars which boost horsepower and other performance attributes over their less boosted counterparts. For example the A6 generates 211 horsepower while the S6 which looks quite similar on the outside generates 414 hp.

The PC market has followed the automotive space with processor speed and type being akin to engine size, torque and horsepower ratings. For example, a Dell XPS 8500 is promoted on the company’s website as costing $749.99 and for that price you get an Intel Core i5-3450 which is rated at up to 3.5 GHz. For an additional $150 you can upgrade to an i7-3770 processor which has speeds up to 3.9 GHz and is “Dell Recommended” whatever that means.

The tablet space is led by Apple which likes to keep things simple so speed hasn’t been as much of an issue. Over time and iterations of mobile products, Apple has increased its processor speeds and even gone from single to dual-core and quad-core processors but they don’t focus externally on the hardware to a great extent.

The one exception and where the company generates gobs and gobs of money is memory. Apple will charge you a $200 premium for 48 GB of memory while you can buy a SanDisk Cruzer 64 GB USB Flash Drive for $34.99. Then again, it is far simpler to understand memory size than it is to comprehend the difference between an Intel i5-3450 and i7-3770 processor.

Apple has simplified the tablet and smartphone purchase to the point where spec differentiation is tough to pull off beyond memory size and number of cores. This is likely one of the reasons Samsung and others have had to focus on increased phone screen sizes to differentiate themselves from the iPhone.

Safety is an important area for some in the automobile market and most people think Volvo when they think of cars which survive crashes best. Have you noticed however that Volvo hasn’t set the world on fire with its sales? The analogous area in mobility is likely security and guess how many people were concerned about moving from very secure RIM devices to less secure iOS and Android devices? Hint: not too many.

Environmental concern is an area where Toyota has shone this past decade with its Prius. The crossover with tech is the “greenness” of the companies themselves. Recently in fact Apple had to change its stance on the EPEAT environmental standard listing as a result of consumer backlash. It was a rare misstep for the consumer electric brand with a virtual halo around it.

Utility is another reason people purchase their vehicles. How many minivan owners do you know who overlook the chunkiness of their vehicle’s design because of the convenience and/or cost? SUVs are cooler looking and so are crossovers – at least to most eyes but they usually require a lot more cash.

The tech space is similar in that you can spend almost nothing for a clunky, ugly and slow laptop or netbook but a state-of-the-art ultrabook could cost you two times as much or even more! An HP 2000-410US Notebook PC will run you $409.99 while an HP ENVY Spectre XT Ultrabook 13t-2000 will set you back about a grand.

Price/Economy is another area of differentiation for car companies. By economy I am referring to fuel by the way and the point here is the low-end of the market buys their vehicles on a tight fuel/monthly payment budget. They can’t necessarily afford to buy a hybrid car so they settle for a low-cost car which doesn’t weigh so much and which has a smaller engine to conserve on fuel.

The analogous area in tech is the 7” tablet where prices are lower than the iPad. RIM popularized the smaller-sized tablet but their prices were similar to or higher than Apple when they first launched. It took Amazon to come out with the $199 Kindle Fire to shake up the tablet space and attract the lower-end of the market. Apple countered with a $299 iPad 2 which was a brilliant move.

Still, this is the area where many tablet makers will be forced to compete – at least that it unless Apple releases its rumored tablet of similar size.

The mobility space for its part has its own areas of differentiation.

Enterprise sanctioning was perhaps the most important area which has become fairly unimportant. One of the strengths of the Cisco Cius table for example was its centralized app control. The market responded with crickets – not because CIOs didn’t want to exert control over apps downloaded on corporate devices but because users could care less what devices their enterprise sanctions.

Ecosystem is another area which doesn’t exist in the automotive space – at least not in a major way. The idea here is there can be only a handful of big ecosystem players and so far we have Apple, Google/Android and Microsoft as our major players… Even RIM has to run Android apps on its OS to even play in the mobile space.

Another area of differentiation for the mobile and automotive spaces is the automobile market can have many more models because of the wide variety of prices in an auto manufacturer’s complete line up of vehicles. Volkswagen for example sells its cheapest car the Jetta starting at $16,675 while its more expensive cousin the Audi R8 GT Spyder starts at $210,300 and its most expensive corporate cousin the Bugatti Veyron 16.4 Super Sport starts at $2,426,904 or the equivalent of 145.5 Jettas!

But device manufacturers should be cognizant of the parallels between these markets because at the end of the day, consumers are consumers and can be motivated to purchase products for reasons we didn’t foresee ahead of time. Who would have predicted before the iPhone was invented for example, that consumers would prefer a sleek phone made of glass to one which was made out of military grade plastic?

Can Discounted Hardware Compete with Apple?

2012-07-10T15:39:19Z

Microsoft Store in Danbury, CT

Global Apple stores are brimming with traffic with municipalities tripping over each other to get Apple to open stores in their areas. At the same time, the Microsoft Store in the Danbury Fair Mall in Connecticut had a fraction of the foot traffic of the nearby Apple Store this past weekend according to fellow TMC blogger Tom Keating. The good news for Steve Ballmer is Tom likes the layout of the Microsoft store better. These are his exact thoughts:

My next thought was, "It's better." The Apple Store has this clean simplistic design with lots of white and clear plastic, but it lacks the fun factor and has this almost cold, hospital, sterile-like atmosphere. I found the Microsoft Store to be warm, fun, and futuristic. The store has huge flat screen displays lining the walls that are perfectly recessed into the wall so they don't stick out even one inch. In front of some of these displays are Xboxes and Kinects to allow visitors to play video games. While I saw some kids jumping and laughing playing a Kinect game I couldn't help but wonder if they were loud in the Apple Store. I imagined the Apple Store employees and indeed the Apple customers themselves would turn to the laughing kids and shush them like a librarian would do in a library and thinking to themselves, "Hush children. This is hollowed Apple ground. Would you be rowdy in a church?" While I may exaggerate the serious "feel" of the Apple Store compared to the Microsoft Store, there definitely is a more of a business-type atmosphere in the Apple Store while the Microsoft Store was more fun.

See the Microsoft Store 360 degree view

Tom thinks that the introduction of Microsoft’s tablets will turn the tide and fill the Microsoft stores. I am sure Redmond hopes so. But if retail is the future of consumer electronics and computing then doesn’t Google need stores – and fast? And what about Samsung and HTC?

The point is these stores are more than retail for Apple, they are marketing. You could make the same argument about the Samsung Experience store in Manhattan but in this case you would be 100% accurate as can’t buy anything – it is a product showcase.

But while we are getting giddy about how consumer electronics companies need retail to be successful, we should stop for a moment and realize that Best Buy is about to lay off 2,400 workers consisting of 600 Geek Squad tech support specialists and 1,800 store employees. We all know the problem but may not be familiar with the term showrooming which as the name implies means you shop in a brick and mortar location and then buy online.

So I got to thinking about author Robert Fulghum who wrote Everything I Really Needed to Know I Learned in Kindergarten. I remember when I was in my mid-single digits Sesame Street taught me a song called “One of these things is not like the other.” In this case Apple stands out.

Obviously we know about the company’s superior products, the Steve Jobs legacy of attention to detail combined with an innate understanding of consumer desires.

But it is more than that. You see, Apple products are sold without discounting for the most part so if you visit in the store, you have little to gain by shopping online – except perhaps sales tax savings in some cases. The situation is far different in most of the rest of consumer electronics except for other premium brands like Bose and Bang and Olufsen.

If the PC market and the rest of the industry thinks they can successfully change to such a pricing model overnight they will be sorely disappointed. In the publishing world one of the biggest challenges is to get an audience to pay for something they once got for free. In retail the corollary is going from discounting to charging full retail price.

The most recent attempt at this strategy shift took place at J.C. Penny where less than 1% of the merchandise sold at full price. CEO Ron Johnson who is the former Apple retail head tried to abruptly change the way the store did business and got walloped by Wall Street when earnings were missed as a result of rapidly replacing discounted prices with more “reasonable” everyday pricing. The strategy by the way has already been tweaked with the addition of discounting.

6 Month J.C. Penney stock performance

To summarize:

It seems the CE market is waking up to the fact they need to rely more on retail.
Consumer electronics retail is having trouble as evidenced by Best Buy.
One way to increase retail sales and more importantly add value to your brand is to stop discounting.
But Best Buy sells Apple products at retail and is struggling.
Best Buy for its part has finally realized there is a larger problem and is testing new stores which look like those from Cupertino.
JC Penney is trying to evolve its sales strategy with non-discounted pricing and the transformation takes time if it is even doable.
The circular nightmare for Apple competitors? If you compete with Apple and don’t have a profitable retail strategy then you can’t compete with Apple.

All of this is taking place at a time when more people are so comfortable with products from Cupertino that they are OK with switching to Mac products when their PCs need replacing. And the younger generation doesn’t have the same connection to Microsoft which most of my readers do.

This really leaves the consumer electronics, gadgets and PC market in a major conundrum. Google, Microsoft, RIM, HP and others really need solutions which are better than those from Apple or at least good enough that consumers won’t mind paying retail prices to purchase them.

Surface Tablet: Microsoft's Desktop Hail Mary

2012-06-20T01:04:53Z

If you are Steve Ballmer, going to the mall and walking by an Apple Store loaded with people buying tablets, music players and phones which don’t run his software has to be as pleasurable as preparing for a colonoscopy. He further has to hate the fact this once left-for-dead enterprise not only has a larger market cap than Microsoft, it has helped usher in what many people call the post-PC era. That one’s really gotta hurt.

Even Google is doing hardware

The challenge Apple represents to competitors has upset Google so much they went out and bought a hardware company. Not just any hardware company but one which has had many problems with profitability over the years, Motorola Mobility.

Apple further pushed Microsoft to work more closely with Nokia but Microsoft’s mobile offerings aren’t being received too well by the market. For Ballmer this failure is just another competitive laxative.

What Apple learned from their Motorola experience

If you recall, Apple first marketed a phone in collaboration with Motorola but the phone was difficult to use and didn’t sell. So Apple had to make theirown phone as a result. Likewise, Microsoft sees its hardware partners are getting beaten by Apple. Ultrabooks are great but Apple seems to always be a step ahead. Anyone remember Zune?

Closed Trumps Open

We have seen over the decades that the open Microsoft ecosystem was superior as it allowed robust competition between hardware companies to provide the best price/performance. But in the world of mobile, Nokia and RIM seemed to be successful because they were closed ecosystems – hardware and software working together under the control of a single company.

Apple has carried on this tradition and this is an area where the company has decades of experience. Even mighty Google needs to couple hardware and software together to compete effectively.

Do you have a store?

Perhaps the greatest irony in the world of commerce in the past decade is the need for retail stores to sell consumer electronics products. Remember all those articles written on computers about how the internet would decimate brick and mortar? Well it seems the stores are multiplying – oddly enough to sell computers. Even camera makers think stores will help. Super high-end camera maker Leica is selling its $27,000 cameras through new retail stores – they hope to have hundreds of them worldwide in a few years.

So if camera makers need a store, doesn’t everyone? Apparently so. And this is an area where Google and Microsoft will likely have to invest over the years to compete effectively. But it remains to be seen if anyone can do retail like Apple. Moreover, Microsoft has 20 stores for now – they have a long way to go.

Are these analysts really thinking?

I have heard/read more than a few analysts comment that Microsoft’s new Surface Tablet is not designed to compete with Apple but instead HP and Dell. I can’t really understand how you can design a product and determine who you are competing with. In other words if I am a customer in search of a tablet, wouldn’t I consider all tablets – assuming price and functionality are relatively similar?

This isn’t to say Apple customers will all jump ship onto planet Surface but if Apple screws up or customers think the larger size of the Microsoft product better suits their needs, they will purchase it.

What would make you buy a Microsoft Tablet?

First of all the new Microsoft Surface tablets are larger, have an aspect ratio suitable for HD content and have a cover with a choice of keyboards. I am biased because I input great amounts of text but I can’t live without a keyboard attached to an iPad. Sure I hear all the time about how tablets are “consumption” devices but unless you are just watching video all day, you are going to interact with your device. A keyboard makes this process much simpler.

Beyond that, pricing hasn’t been announced but it is to be similar to netbooks for the Surface Tablet running Windows RT and similar to Ultrabooks for tablets running Windows 8 Pro.

In addition, you there is a microSD slot as well a USB 2.0 port making the device more expendable than iPads.

Then of course there is software. If Office is important to you, you will want this tablet. I use Microsoft Word all the time but haven’t felt the absence of this product on an iPad has been a major problem. Microsoft hopes I am the exception.

So the next question of course will be what programs runs on these tablets and although it is soon to say what current Windows software will run as is, the war is now on to see which platform has the most apps. Of course I have said before, many iOS apps exist simply because Apple’s mobile devices don’t support Flash. This won’t be the case with Microsoft.

Speaking of Flash, it is still hard to believe Apple has been so successful without supporting it. At least once a week I come to a site which is powered by this Adobe solution and have to wait till I get to a PC to view it.

So what about Dell, HP and others?

This move is a vote of no confidence in hardware companies as I have said before. Maybe it will wake them up. The HP Folio (pictured) is ugly. Fell out of the ugly tree, hit every branch on the way down God-awful ugly. It is as if there wasn’t a product design person at the company who could even give input on this thing. And it is supposed to be the driver for Microsoft’s OS business? Yeah, right.

What should be going on in the boardrooms of Dell and HP right now is a corporate decision to stop letting products out the door that look like an engineer designed them.

I was at lunch with a few very successful telecom entrepreneurs today and the discussion got to center around the attention to detail both Amazon and Apple display. One salient comment was that Amazon lets retailers update a new product on their site in two minutes but for eBay the same process takes 30 minutes. We have moved from a world of consumers not caring about design and usability much to one in which these factors are driving massive consumer loyalty. All companies ignore these trends at their own peril.

Would I buy a Surface Tablet?

I want to see one of these units first but if the software is easy to use, there are certainly benefits to using Microsoft devices from a central IT perspective. Then again the virus checking and other security-related software is not only a pain but adds overhead to the device which sucks battery life and tablet speed.

I can say comfortably that no one wants a tablet which is as virus and security-breach prone as today’s Windows desktops and laptops.

This is the ultimate Hail Mary for Microsoft on the desktop

Let’s face it. More users are getting comfortable with Apple and are switching their PCs for a variety of Mac computers. This trend is very scary for Redmond. Microsoft had to make this move and risk alienating their hardware partners. They also had to do it now. They may even be too late. I have seen so many technology demonstrations from this company over the years which haven’t turned into products because Redmond had to rely on others. Now they have the chance to put hardware and software together and give us a superior experience. Apple has raised the bar high – skyscraper high. Microsoft has a shot to impress the world with its new achievement. For their sake, they better have most of the details and kinks worked out. Otherwise, their mobile destiny may be very similar to that of Palm, Nokia and RIM.

Intel Finally Gets Mobile?

2012-05-17T15:08:44Z

Intel is selling its computers quite nicely into PCs and servers and although we are in a so called "post-PC era" people keep buying computers by the tens of millions. The long-term challenge is in-part ARM, the instruction-set architecture which is being turned into highly efficient chips used in most mobile devices.

The challenge of course for Intel is the typical one of disruption from below. An example is how RAID allowed inexpensive and less reliable hard drives to replace larger disks in the market.

Likewise, the ARMv8 64-bit architecture application profile was defined two months ago and at some point soon we will see these chips in the field. Moreover, expect them to rapidly go multicore if not initially. From a price/performance standpoint as well as in the power consumption arena we can surmise this processor to be something Intel should worry about. After all, companies like HP are known to be experimenting with ARM chips in their HPC initiatives.

The good news is Intel says they finally understand operators. More specifically, Herbert Weber, EMEA marketing director for mobile and communications at Intel, told Telecoms.com that they finally see the differences between mobile and the PC market.

Moreover he says Intel will begin to integrate a variety of connectivity technologies into its mobile chipsets such as WiFi, GSM, GPS, LTE.

But it isn't like companies like Broadcom haven't been doing the same thing for many years, allowing them to grow more quickly as mobile supplier. Moreover, Intel started to integrate GPUs and WiFi onto CPU chips and motherboards many years ago - certainly this isn't a new concept.

It is obvious the main problem Intel has keeping it from becoming a dominant mobile supplier has been and will continue to be size and power consumption and to that end Weber had this to say:

We have made significant improvements into our design and architecture and now we don’t need to hide behind anyone in terms of battery lifetime of our phones and power consumption. We are now on par with where the market is today and we intend with our next devices – the Maryville chipset going to 22nm and the next wave of chips coming in the 14nm platform – to be better than the rest of the market in terms of power and battery lifetime.

Although Intel has given up much of the mobile market its efforts in the Ultrabook space have been fantastic and in my opinion severely under-reported by the media in general. Intel finally seems to get the concept that if they don't make more efficient chips their days will at some point be numbered. And based on my usage of a Asus UX31 Zenbook Ultrabook, I can tell you that Intel has come a long way.

In fact this powerful yet featherweight computer lets me work for about 9 hours without wireless turned on and with the screen pretty dim.

But they better keep going as Apple is likely looking for ways to switch entirely to ARM to lower its costs as it makes its own processors already for the iPhone and iPad.

There is no way to know Apple's future plans for sure but Intel is keenly aware that the loss of the fastest market-share gaining computer platform won't be good for its company or share price. And once we start to see these chip roll outs being released as planned, we can believe that Intel finally does really get mobile.

Ultrabooks Finally Get Needed Attention From Intel

2012-05-04T20:55:11Z

Intel is running a new ad touting the long-lasting Ultrabook which has hours of battery life. And while I applaud Intel for finally acknowledging this category needs marketing I am still at a loss. You see battery life is one of the features which makes a MacBook great and so is the wonderful design. We all know Ultrabooks exist almost exclusively so PC makers can compete with Apple.

So this being the case why do all the Ultrabooks except the ones from Asus and possibly Samsung look like absolute crap? In other words if you are competing with Apple - do it properly and design something which looks as good as it can look.

Dell recently had strong sales of its XPS 13 Ultrabook (pictured) and to be fair, it too is certainly one of the better looking devices on the market. Perhaps the company's success will light a fire under the rears of HP's designers. And Best Buy for that matter - do they realize this is a new and emerging category? Remember what I said about the retailer this past December? Here is a reminder:

I was in a local Best Buy last week and this past weekend and I spent some time with the salesman in the Apple portion of the store. I queried him as to how many people are asking him about Ultrabooks and he said there is no comparison as they get viruses and have no SSDs. His lack of knowledge about the new models from companies like Lenovo, Toshiba and Asus which do indeed have SSDs surprised me. After all Best Buy had the Asus and Toshiba on display no more than fifteen feet away. You figure any salesperson would know what the competition was doing. And you guessed it – the salesperson worked for Apple, not Best Buy.

The Ultrabook category while superhot to the people in the know is not known much outside the bleeding-edge - yet. Many techies I know in fact have never heard of them. Moreover, Best Buy markets Ultrabooks like they were dog droppings. The salespeople don’t know much about them. There is no sign pointing to them as special – or at all different from laptops and notebooks. Most consumers in the store in fact avoided them as they sat in relative obscurity.

It is really inexcusable for Best Buy to have such poor marketing for a killer category of product with potentially higher margins than many other products in the store. Moreover, these devices are perhaps the biggest reason to visit the store – besides perhaps checking out the latest flat screen TVs.

In May of 2009 I praised Dell for launching a high-end stylish line of computers called Adamo. At the time I said:

So my advice to Dell would of course be to move up market. Go after Apple head-to-head. Give those people who want an ultra-thin Mac laptop a way to get the sleekness of a Mac with the ability to run Vista.

In the same entry I disagreed with Chris Dawson at ZDnet who said the economy is not ready for a laptop which is so expensive. Well Adamo didn't make it so Chris either was right on, partially right or there was a marketing/execution problem from Dell which caused the company to withdraw this product at a later date.

Funny thing - I am not sure the economy is really that much better nowadays but at least the cost of Ultrabooks seems to be generally under $1,000 which is far more palatable.

So hats off to Intel for starting the marketing blitz for Ultrabooks - now the war with Apple is on. Let's see if the momentum at Dell continues and whether other computer makers will be able to see similar amounts of growth. And let's hope these computers start to look even better so future Intel ads can actually brag about how good they look and sleek they are.

Is the Post-PC Era a Myth?

2012-04-16T14:26:59Z

The way one should interpret the term "Post-PC" is "after PC" - implying that the world has changed from era to the next. Sarah Perez at TechCrunch does an admirable job of laying the case for what she calls the Post-PC era or alternatively - "PCs Everywhere" which I agree isn't quite as catchy.

In her article she discusses how Apple sold 37M iPhones in Q4, 15% of the official PC market is made up of tablets (mostly iPads) and Apple is now the leading "PC" vendor. Moreover smartphone shipments last year hit 487.7M while PC shipments hit 414.6M and the smartphone growth rate is 63% versus 15% for PCs.

So one would imagine once again that the phrase "Post-PC" means that there aren't going to be more PCs sold.

Gary Kim writes on IP Carrier that while global tablet sales are growing at 98% YoY for 2012, the PC market is expected to increase 4.4% and will increase to 10% in 2013.

The catch is - and there is always a catch, that most of these sales will be in emerging markets and will be for more portable computers - laptops, ultrabooks, etc. Kim makes the argument however that tablets may be 42% of total PC sales by 2016 - a staggering percentage.

The trend is clear however that portability and style trump virtually everything else when it comes to the tech space. And moreover although the PC space is growing - it is in-part because tablets are being factored in.

So really the proper explanation for what is happening is we are entering a post - bland, nontransportable PC market phase. Let's just call is "Post-PC" for short.

A Contrarian View on The Apple/Foxconn Labor Situation

2012-04-05T18:49:17Z

A few weeks back when the New York Times wrote a story regarding workers making iPhones and other devices in China who aren’t being treated very well, I wondered, this is a story? In other words, is there a person on the planet who doesn’t know that working conditions in China are far worse than they are in the US?

And I absolutely respect the right of the New York Times to run such a story – I just think it shows a broader agenda of being anti-capitalist, and anti-business. After all, we in the US have been buying Chinese products made by people in poor working conditions for decades. Why write this story now? Let’s stop for a moment and consider that if conditions in China are so poor for workers, then why are they working? In other words, they must be worse off – likely far worse off if they don’t have their Foxconn jobs.

The end result of this piece however is that wages across the manufacturing sector – starting with Apple will increase.

The problem is if you are truly worried about Chinese workers you should be concerned to see this happen because as costs for workers rise, the cost of automating gets a better return on investment. In other words if it may have taken seven years to pay back a robotics investment just a few months ago, now it may take just four years.

And guess what… When robotics becomes more prevalent, there will be less jobs meaning many of these workers will have to go back to living in conditions they escaped by working at Foxconnin the first place.

It is worth pointing out that in the US , minimum wage laws have made the ROI on self-scanning equipment at supermarkets better so guess what… There are less people working. The same sort of thing will happen in China.

Of course the situation is not so cut and dry as more and more manufacturing is moving to China meaning workers will likely have steady work for some years.

It’s worth pointing out that what will happen as a result of higher wages in China is Mexico and other countries will become a more logical place to manufacture. As I pointed out last year call center jobs in the US have been increasing because wages in India are rising – but in that case it is the free market working.

Seeking Alpha has an article out today which describes how Apple has made a brilliant move by increasing the wages of its workers because its margins are the highest in the industry. In fact their net margin is 24% while the next highest computer makers are HP and Dell at 5.6% followed by Nokia at around 4.4% and Amazon at 1.3%.

The point they make is the rest of the industry will be squeezed by this move.

The challenge with this line of thinking is if the cost of an Apple product is about twice that of a non-Apple product (of course this isn’t always the case) then these other companies can raise prices and still be far cheaper than Apple.

So while we can applaud the fact that workers in China will be faring better, lets keep in mind that abruptly changing things like inputs costs in the manufacturing sector could have far-reaching implications like inflation for the markets where Chinese good are shipped as well as the potential for more robotics to be used to eliminate the workers altogether.

To get a sense of what I mean, see how Kiva Systems robots operate - Amazon just purchased the company.