04.25.10
Microsoft’s Phone Business as Dead as Zune, But Apple Too Loses Its Mind
Kin is the new Zin
Summary: How Microsoft failed — quite utterly in fact — to reignite interest in its mobile business; a leak of an Apple iPhone prototype leads to criminal investigation at the behest of Chairman Jobs and his morbidly-vain group
OUR previous two posts helped expose Microsoft's rather abysmal financial situation and systematic tax evasion (which it can pretend not to be an evasion because it controls the law through former employees and lobbyists). One area where Microsoft is/was losing billions of dollars would be the whole mobile business, whose losses Microsoft was trying to hide over the years using tricks that Microsoft Watch explained about 3 years ago (before it became a Microsoft PR outlet, post-morphing). More recently, the SEC started probing Microsoft about this allegedly inappropriate reporting of cash flow. People will hopefully be allowed to know what’s going on inside Microsoft (press releases are spin; they are rarely connected to reality, but reporters rely on them).
“More recently, the SEC started probing Microsoft about this allegedly inappropriate reporting of cash flow.”Pogson continues to write about the true impact of GNU/Linux on the price of Windows (and thus Microsoft’s financial performance). Sub-notebooks are an area where Microsoft’s competition is so great that Windows is given away almost for free and some sources say that Microsoft even pays OEMs to preinstall Windows (instead of charging for it).
Another area where Microsoft faces overwhelming competition is phones and as we showed last week, Microsoft stands not a chance with “Kin”. It’s just too far behind and the South African press seemingly agrees.
I just think that the company should be focusing its energies on getting Windows Mobile 7 out the door. The longer that OS is delayed the more customers Microsoft will lose and the more people will speculate that Microsoft doesn’t actually have a product to match the iPhone or Android.
More importantly, Microsoft can hardly charge for it, so what is its business model? Selling mobile phones as hardware? With designs like that (it seems like a Palm ripoff from ages ago), Microsoft’s mobile reality is a really gloomy one. Kin is nothing. It’s probably just another Zune (Microsoft can’t use this name for the phone because it’s tarnished just like “Vista” or “Live”), but this “Zune phone” enjoys far less hype than the Zune. A few days ago, Dvorak pointed out that:
We hear very little from [Microsoft's] outside agencies and almost nothing from the inside PR department.
Where are the exciting news stories about what the company is doing? This can’t be good for the company, it has always relied on a blanket of often obfuscating PR, especially when leading into the next generation cash cow.
Given Microsoft’s enormous debt, maybe it’s just not renewing contracts with PR agencies. The lack of buzz generated about Kin sure surprised us last week (we expected a massive blitz and journalists did too). Is this another sign of Microsoft’s demise?
Forbes has this new article which is titled “Microsoft’s Dismal Future” (it mostly speaks about phones, operating systems, and search).
Instead, since 2008 Microsoft has busied itself launching two very expensive operating system upgrades, Windows Vista and 7, in an effort to defend and protect its historical PC operating system business. They’ve been a huge investment, but both have won a less than enthusiastic response from the vast majority of users. Microsoft has turned to forcing new computer buyers to purchase them, since almost no one chooses to buy them. Additionally, it is in the midst of planning Office 2010, an enormously expensive upgrade of Office 2007, even though a huge number of customers still use Office 2003, completely ignoring or rejecting 2007 since it came available.
Instead of working hard to get into new growth markets, Microsoft, in the tradition of Xerox and Kodak, pours its talent, energy and money into trying to defend its PC operating system and office products markets, which have much slower growth and are under attack from new mobile devices.
[...]
Apple broke out of defending and extending the Macintosh platform, and Google avoided falling into merely defending the search business (unlike Alta Vista and AskJeeves). They did so by strategically using white space, meaning they’ve supported unfettered, unencumbered opportunities to pursue entirely fresh ideas and move them into solutions and then to the market quickly and effectively. Fundamentally, both companies are very different from Microsoft, because Microsoft hasn’t learned to use white space teams.
We are not proponents of Google or Apple. Both companies sell products and services that are proprietary (and sometimes painted as “open”). A few days ago Apple was sued yet again for its arrogant behaviour and shoddy products. This week we also learned that a police probe (no kidding!) was launched because secrecy was not honoured by Apple employees/partners.
Silicon Valley police are investigating what appears to be a lost Apple iPhone prototype purchased by a gadget blog, a transaction that may have violated criminal laws, a law enforcement official told CNET on Friday.
Apple is all about fake hype. It adds to the allure. It’s just hilarious when Apple has the police involved because its hype machine failed. If the “alien test” was applied (hypothetical extraterrestrials watching from above), Apple’s behaviour would make it akin to China’s [1, 2]. █
Yuhong Bao said,
April 26, 2010 at 7:20 pm
On Apple’s secrecy, yes I know. Here is an article about it, in fact:
http://dashes.com/anil/2009/07/apple-secrecy-does-not-scale.html
Dr. Roy Schestowitz Reply:
April 26th, 2010 at 7:21 pm
Thanks, I missed that post.