Bonum Certa Men Certa

Failures in Xbox, Zune, and Windows Mobile Mark “Microsoft’s Downward Spiral”

Spiral shell

Summary: The business areas which Microsoft does not take pride in are continuing to disappoint in a very major way

PEOPLE are easily led to believe that the more products Microsoft has, the more money Microsoft will make. The reality is very different however; few of Microsoft's products actually generate profit. The Xbox disaster has already cost Microsoft about $7 billion in losses and it still does very badly. In Japan for example:

Media Create Co. on Fri. reported that the Xbox 360 sold 8,965 units between Dec. 14 and Dec. 20 to rank No. 7 in overall hardware sales.

"Best games" of 2009 are dominated by PlayStation 3 and the best-selling such device (this generation's console) is Nintendo's Wii. Microsoft is now hoping to mix two failures -- Windows Mobile and Xbox -- as an overdue step that will do... well, something. Given that Windows Mobile is dying, what might this combination bring about? Even ardent Microsoft fans are giving up on Windows Mobile. From the past week alone we have: "Killing Windows Mobile to save it"

“Even ardent Microsoft fans are giving up on Windows Mobile.”That comes from fans -- not realists -- when it comes to Microsoft. Joe Wilcox from Microsoft Watch (before Microsoft Nick ruined the site) is among those who suggest that Microsoft should just buy another product to replace Windows Mobile. Unlike the many who point at RIM's direction (Blackberry), Wilcox points at Palm (WebOS), which would merge Microsoft and Linux (GPL), so it is rather unlikely. SideKick uses BSD and Microsoft ruined it by buying Danger (there is now a class action lawsuit). There is also a history of legal battles for Microsoft's abuses against Palm, e.g. trademarks (before Palm stocked Windows Mobile).

Microsoft expert Todd Bishop complains (by reference) about the illusion of a Windows Mobile "community". Microsoft is driving Windows Mobile developers away.

Moving away from Microsoft fans, there is this new article from the Wall Street Journal:

Microsoft's Dropped Call

Reasons to feel bearish about Microsoft aren't hard to find. But it's the software giant's diminishing profile in the mobile world that is the talk of Silicon Valley right now.

The explosion of mobile applications on devices like Apple's iPhone and Motorola's Droid presages far-reaching changes in consumer behavior. Google gets that. Aside from helping develop the Android mobile operating system, the company plans to buy mobile ad firm AdMob. And now it is working on plans to sell its own phone.

Speaking of this acquisition, here is a new article about it:

The Real Reason Google's $750 Million AdMob Buy Is Getting Held Up


The real reason the Federal Trade Comission is taking a second look at Google's $750 million AdMob acquisition has little to do with Google (GOOG), whiny consumer groups, competitive issues, or even Microsoft. The hold-up is thanks to the FTC's own Washington D.C. turf war with the U.S. Justice Department. Or at least, that's one story the pro-Googlers out there are spinning.

Gizmodo has published "Microsoft's Lost Decade in Mobile" and The Boston Globe has nothing good to say about Windows Mobile (describing it as a desperate bid to survive):

Then there’s the accelerating rollout of new, high-speed wireless data services from the nation’s cellphone carriers, and Microsoft Corp.’s desperate, buzzer-beater bid to survive the smartphone playoffs.

A close relative of Windows Mobile would be the Zune disaster and yes, the Zune too is dying in the market. From IDG:

OK, it's really no shocker that Apple's iPod touch trounced Microsoft's Zune HD in holiday sales. But couldn't the Zune have at least done a little better? Amazon's list of Bestsellers in Electronics has the iPod touch in the second and third spot, (8GB and 32GB models), while the Zune HD (32GB) languishes at number 89.

Rob Pegoraro has argued that "Smartphones were the tech story of 2009" and Microsoft is clearly in a bad position, chasing trains in an age of airplanes.

If Microsoft fails to evolve for an age of mobility, then its future is indeed uncertain. From the new year we have:

Ten resolutions Microsoft should make for 2010

2010 Prediction Roundup: From Outlandish to Likely

10 Mistakes Microsoft Made Over the Past Decade

Is Microsoft too big to fail?

2000-2009: Microsoft's decade of shattered dreams

I dedicate this seemingly harsh post to all the Microsoft employees that privately have complained about management problems -- not because they were mad or resentful but because they desperately wanted to fix the problems. They spoke to me in confidence out of their love for Microsoft. I apologize for not speaking up for them before. I do so today, as reflection on the past to shed light on future actions. The decade 2010 could be better if Microsoft learns from its mistakes.

That last one is from Joe Wilcox, who fails to find something nice to say about Microsoft these days.

At New Jersey Business News, among "Predictions and wishes for the new year" we find "Microsoft’s downward spiral". Here it is verbatim:

Microsoft’s downward spiral: Does anyone care about Microsoft? Sure, hundreds of millions of people around the world use Microsoft software, but the Google phone and the Apple tablet make Microsoft seem like a slow-moving behemoth bereft of innovation. Tech bloggers and commentators can’t seem to write about Microsoft without using the word "irrelevant."

A reader of ours believes that standards too are going to spell the end of Microsoft as a relevant player. He shares with us what he calls a "step forward for open standards, health care in the US" [PDF].

Linking to this article he adds: "It's been a long time in the works, I remember HL7 being discussed in the mid-1990's Microsoft won't be able to keep standards derailed that much longer."

"I’d be glad to help tilt lotus into into the death spiral. I could do it Friday afternoon but not Saturday. I could do it pretty much any time the following week."

--Brad Silverberg, Microsoft


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