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Microsoft's Hardware Ventures an Embarrassment

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Aside from "Microsoft"-branded peripherals, Microsoft cannot make hardware work economically



Summary: An overview of news about Windows Home Server, Xbox 360, Zune, and KIN

AN IMPORTANT POINT that was stressed earlier today is that participation alone is no guarantee of success. The statement rings true especially when it comes to Microsoft's business in hardware and on the Web. This post will only deal with the former bit, based on the past 2 months' headlines that somehow we missed.



Let us begin with the latest story of Windows Home Server. The Linux-based Drobo puts it to shame and the staff mocks it, with the CEO saying that “It Looks Like Microsoft Just Gave Up” (that's the headline!). To quote: "Whilst the Windows Home Server community continues to rail against Microsoft’s decision to axe the platform’s core storage technology from the next release (with the exception of the Windows Team Blog where comments have been switched off for the last few days), Drobo’s CEO, Tom Buiocchi, today shared his take on Redmond’s decision."

Here is older information about it and some more articles [1, 2, 3] about HP dumping Windows for Linux on home servers. A Microsoft sympathisers' site published "The Vail debacle: Why Microsoft still doesn’t get the consumer" and it turns out that in other form factors too HP is dumping Windows in favour of Linux. In embedded devices there is little or no room for resource hogs like Vista 7, which is gradually being dumped/neglected by partners like Lenovo (it can be added that Lenovo complements with/aggregates Linux in some of its products).

"Microsoft products are dying quietly" is what we said very recently and the list is up to about 60 dead products by now. There are many failures in hardware, which means products where Microsoft is an integral part that is actively advertised (like "Windows Home Server", not just Xbox). In our Wiki there is a page dedicated to "Microsoft - Consumer Hardware" and it includes a summary of posts about Xbox 360, which has just turned 5, suiting buyers of the same age pretty much (well, bar the gore and all).

Be very, very careful of disinformation in the English-speaking press. Microsoft characteristically uses US-only numbers to lie (by omission) about its position, leading to the illusion that the Japanese counterparts are suddenly losing. That's not the case at all. "Xbox 360 sales take sixth in Japan" say this report and this report from December, whereas a January 2011 report states in its headline that "Xbox 360 demand drops to No. 8 in Japan". To quote the older article:

Sales for Microsoft Corp.’s Xbox 360 hardware ranked sixth among hardware in the latest Japan retail numbers.

Media Create Co. on Fri. reported that the Xbox 360 sold 3,497 units between Nov. 29 and Dec. 5 to rank No. 6 in overall sales.


Microsoft lost billions of dollars on Xbox. It doesn't like to talk about it.

"Analysts can’t agree on whether Microsoft has blown its lead or not" says this other article's headline wherein "DFC Intelligence’s David Cole believes that Microsoft is blowing it by not having a diverse enough range of titles and mainly concentrating on the American styled shooters and action titles. While PS3 has a much broader range of titles which helps explain it’s utter dominance in Japan and fight back in Europe."

"Microsoft admits that Blu-ray is not so bad" and "Microsoft Grudgingly Admits Blu-Rays are ''Pretty Cool, I Guess''" say some other articles, noting:

It has taken a year but Microsoft has totally reversed its anti-Blu-ray stance.


The problem is, Microsoft has no Blu-ray support, but hypocrisy and double standard prevail nonetheless. "Microsoft takes swipe at Mac for not supporting Blu-ray" says a headline from ZDNet, which is funny because Microsoft used to promote HDDVD, a competitor of Blu-ray. Apple did not really participate in this expensive battle at all. To Apple, the digital downloads distribution model seems sufficient and Apple is a big proponent of DRM.

On we move to KINect. Those who believe the $500,000,000 (estimate) marketing campaign may actually have fallen for the illusion of KINect 'success'. "Pop Stars Move Kinect In Japan" as part of this expensive marketing blitz and Microsoft sells only 26,000 KINects there (it is a technologically-advanced country with over 100 million people). Sony says that Kinect is mostly a bunch of tech problems, based on a recent report, which adds: "If you believe Microsoft, the world is creaming its little yellow pants over how impressive Kinect is, but Sony doesn't think it's that hot. Writing off the technology for its mass of technical problems, Sony Computer Entertainment engineer Anton Mikhailov believes Move is a faster, sexier, less problematic solution."

As OpenBytes quotes from Gamepur: "Microsoft Kinect is giving sleepless night to many of the Xbox 360 owners as its causing a many issue to them and the most notably issue is "Red Ring of Death". [...] Many such complaints on the forum points to Kinect as the main culprit for RROD problem, however there isn't any solid and concrete evidence to proof the same. Microsoft is yet to comment on this."

The MSBBC published the Microsoft excuses: "Microsoft has denied any link between Kinect and the three flashing light error signal, known as the "red ring of death"."

Thank you, MSBBC. Thanks for the reminder of who runs the BBC (hint: former Microsoft UK staff).

Here is another funny example of Microsoft failing to sell hardware peripherals for Xbox 360. To quote some headlines: "Microsoft: Nobody Bought Xbox 360 Faceplates"; "Microsoft Says Xbox 360 Faceplates Were A Failure, But Still Not A Bad Idea [Microsoft Recognizes Xbox 360 Faceplates Were A Failure, Something We All Knew In 2006]"; "Xbox 360 Faceplates Were a Failure, Says Microsoft"; "Microsoft says Xbox 360 faceplates were a failure"; "MS: 'Nobody bought' Xbox 360 faceplates"; "Shocker: Nobody Bought 360 Faceplates" and "Why no removable faceplates on 360 slim?". Microsoft even admits the failure. It's the admission which is rare, not the failure.

Microsoft says there is no plan to create a new Xbox, based on a very recent report:

With the presence of Kinect, many observers thought that Microsoft is also preparing the next generation Xbox 360. But it was firmly denied by the software giant.


Well, there is another business model cooking here. "California man goes to court for modifying Xbox 360" says one headline, another says that this "Xbox modder could spend three years in prison", but finally -- courtesy of a Microsoft booster -- "Judge in Xbox hacking case frags prosecution, case killed". "The judge "unleashed a 30-minute tirade" against the prosecution, criticizing potentially illegal acts by prosecution witnesses and faulty instructions proposed for the jury," says this report.

So Microsoft is just wasting its time and pissing customers off. What on Earth was it thinking? It's a sign of bafflement and frustration, so no wonder so many Xbox managers quit the company in recent years.

On we move to the Zune, which is a product so ill on its deathbed that Microsoft pretends it's just a companion to the Xbox/Live universe. This enables Microsoft to pretend this product is still alive, but as CNET put it, "Is Zune dying, or more important than ever?" Another new headline that's posing a question rather than saying the truth quite bluntly is, "Microsoft Zune: A Unique Innovative Idea?"

It seems like a rhetorical question. Given that even Microsoft does not support the Zune, what can the answer be? Yes, that's right, Microsoft is ignoring its own products and reporters notice:

Unusually, the company chose to use Amazon MP3 and not its own Zune Marketplace


More here:

Once you’ve qualified, Microsoft will send out the gift code to claim the track, and you’ll need an Amazon account to claim it by January 24th. The strange bit is that Microsoft chose to use Amazon MP3 instead of its own Zune Marketplace, but you can bet that folks aren’t going to complain (too much) over freebies.


As one last item of relevance (or irrelevance rather), remember the KIN? "Kin's quiet return a rarity among failed gadgets" said CNET at one stage when there was chatter about KIN coming back as a "Zune phone" or something along those lines [1, 2, 3, 4]. It was probably misreported or merely an attempt to deplete remaining supplies because Kin services are officially dead, leaving KIN buyers with a dud in their pockets/hands:

The closure of Kin Studio -- an online companion service by which Kin users can manage their phones, post to social networks, and host photos and video -- will maroon a few thousand Kin users without key services.


"Microsoft Kin named one of CNN's top 10 tech fails of 2010," says a headline from Zunited. "Microsoft Nukes Kin Studio" says this headline, which slams the door shut on KIN's coffin.

A Verizon Wireless document (JPGs) obtained by Windows Phone Central reveals that Microsoft will permanently close KIN Studio on January 31, 2011. For the 500 or so consumers who actually bought the "social" phone, this means the backbone OTA feature set will no longer be available. Instead, owners will be reduced to sending texts and making calls. Brilliant.


Does Microsoft have a future as a hardware company? Not a fat chance if this performance carries in.

Mac Asay [sic], who left Canonical to join a proprietary software company (Asay was previously close to taking a job at Microsoft), now says that the hypePad "is awesome" and denies that it is under threat from Linux. To Asay, Microsoft tablets which are an utter embarrassment should be considered the greater threat to Apple's tablet. So why did he work for Canonical?

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