Software // Operating Systems
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10/2/2013
12:49 PM
Shane O'Neill
Shane O'Neill
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Microsoft Should Get Out Of The Device Business

Microsoft must get over Apple envy and play in the real world of mobile. First step: Unchain Microsoft software from Windows.

 Microsoft Surface: 10 Best And Worst Changes
Microsoft Surface: 10 Best And Worst Changes
(click image for larger view)
Is Apple envy getting the best of Microsoft? Over the past year, the software giant has burned partner bridges so that it could follow the Apple model of controlling the whole product.

But Microsoft's dusty inventory of Surface devices shows how difficult the integrated hardware-software market can be, as computing shifts from being device-centric to being centered on software, data, services and user experience.

Unfortunately, the alternative for Microsoft in mobile is equally hazardous: Keep relying on OEMs seduced by the popular and free Android. It's not as if Samsung and HTC are clamoring to pay a Windows license fee so they can make mobile devices most people don't want.

Steve Ballmer's successor will have to decide whether to stick with the "devices and services" model Ballmer set up just before announcing his retirement. Don't expect much to change. Microsoft isn't about to bring in a cowboy that will abandon the company's new business model and its $7.2 billion acquisition of Nokia.

[ Apple's gold iPhone is attracting copycats. Read Samsung Unveils Gold Galaxy S4: Apple Envy? ]

However, with Windows revenue falling and Windows Phone a distant third behind Android and iOS, with roughly 3% of smartphone sales, can this hardware quest possibly end well?

Commodization Of PCs And Tablets

The PC market has been on a downturn since the iPad was introduced in 2010. Research firm IDC predicts that PC shipments will shrink by 9.7% year-over-year in 2013 and that tablet sales will surpass PC sales for good in 2015.

Microsoft's Windows 8 Surface ultrabook-tablet hybrid devices are an attempt to assert some control over the diminishing PC market while establishing the company as a tablet player … all with the same device! Surface RT, Surface Pro and Windows 8 all landed with a thud this year despite sincere efforts to create a unique hardware and user interface experience. Surface devices account for just 3.7% of tablet sales, according to IDC. Surface 2 devices, announced last week, offer hardware improvements such as an adjustable kickstand and a touch cover keypad that enhances battery life, as well as 200 GB of free SkyDrive storage.

Surfaces

Out of the gates, the Surface 2 device (the ARM-based, cheaper, more "tablety" Surface that runs Windows RT) scored big when Delta announced that Surface 2 tablets will replace paper document flight bags for 11,000 pilots; this would normally be a job for iPads and is an indication of enterprise opportunities for Surface and Windows 8.

But down here on earth, Surface prices are still unrealistically high given the lack of demand from consumers and businesses (the 64-GB Surface Pro 2 is $900 and the 32-GB Surface 2 is $450).

Microsoft positioned Surface to inspire PC makers to improve ultrabook hardware. But that market is contracting, and inspiration is in short supply. As such, ultrabooks keep getting cheaper, thanks to more consumers buying inexpensive tablets for light computing tasks.

Both Surfaces offered the tablet-loving public more than it needed. The Surface Pro's 10.6-inch screen is too big, the price too high, the battery life too short and the selection of apps too scant to be considered a tablet, as the market has been defined by the iPad, iPad Mini, Samsung Galaxy Tab, Google Nexus and Amazon Kindle Fire. Consumers were also thoroughly confused by Surface Pro's operating system, Windows 8.

These days, being a laptop/tablet hardware maker is an uphill climb if you can't reap profits from the software and services inside. And so far, the embattled Windows 8 isn't providing the app and ecosystem perks Microsoft needs to lock itself into a hardware-software package.

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TechPundit
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TechPundit,
User Rank: Apprentice
10/4/2013 | 11:09:06 AM
re: Microsoft Should Get Out Of The Device Business
So Apple gets to benefit, but not Microsoft?
Why should Apple get all the advantages of being in control of both the operating systems and the devices, but that strategy is not one for Microsoft?
No...Microsoft HAS to control its own destiny, instead of being subject to the whims of other manufacturers, who create devices (some good and some bad) that greatly influence the customer experience of users of Microsoft operating systems.
I believe part of the difficulty with the initial launch of the Surface tablets is that Microsoft had to price them high enough to entice other manufacturers to produce similar devices that had a suggested selling price that MIGHT make a profit. If Microsoft had priced the Surface much more aggressively against the iPad and other Android devices, accepting a smaller profit margin to gain sales and market share, the experience would have been different, I believe.
rradina
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rradina,
User Rank: Ninja
10/4/2013 | 3:27:22 AM
re: Microsoft Should Get Out Of The Device Business
I don't think there's a case to be made since the computing landscape is no longer dominated by anyone. In fact it could be argued that Google may soon represent what Microsoft was in the 90s. If Microsoft tried to complain about Netscape being anti-competitive in the 90s, would anyone have listened?
rradina
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rradina,
User Rank: Ninja
10/4/2013 | 3:19:46 AM
re: Microsoft Should Get Out Of The Device Business
A Haswell Core i-5 w/8GB RAM should run anything you throw at it. Well, maybe not iTunes. For some reason, iTunes has never had what I call good performance. It was even slow when I used it on a MBP w/an i7!
AustinIT
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AustinIT,
User Rank: Apprentice
10/3/2013 | 11:34:22 PM
re: Microsoft Should Get Out Of The Device Business
Really? The Surface Pro 2 has better specs than the majority of the tablets, laptops, and ultra-books out there. With the 25 inch monitor and a docking station, it will rival most of the desktops. So, I don't get your point. Using it on your lap is no worse than an iPad or any other tablet.
Thomas Claburn
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Thomas Claburn,
User Rank: Author
10/3/2013 | 11:25:34 PM
re: Microsoft Should Get Out Of The Device Business
I don't think Microsoft has a choice. Thanks to Google, and to a less extent Apple, software costs a lot less than it once did. Apps are close to free. Revenue from licensing Windows and Office will only decline. Hardware provides a vehicle to sell software and Microsoft needs that vehicle more than ever right now. It just needs to make good hardware, which turns out to be rather tricky.
melgross
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melgross,
User Rank: Ninja
10/3/2013 | 11:01:27 PM
re: Microsoft Should Get Out Of The Device Business
Junk.
melgross
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melgross,
User Rank: Ninja
10/3/2013 | 11:00:25 PM
re: Microsoft Should Get Out Of The Device Business
I like Nokiasoft better. But this search thing may bite Microsoft in the rear, if the Justice Department gets off theirs. Remember the last suit the Feds had? How come they aren't giving Microsoft the same scrutiny here? Ever try to remove either form of IE from Win 8?

And then there's Bing. Now written into Win 8. Almost impossible to set Google as your preferred search engine.

Why no reaction so far from Justice or the EU? The only reason why Bing seems to be getting more share is because you can't really use Google in the Modern UI. I'm surprised that other browser developers and Google aren't complaining.
Shane M. O'Neill
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Shane M. O'Neill,
User Rank: Author
10/3/2013 | 10:56:03 PM
re: Microsoft Should Get Out Of The Device Business
Surface Pro has suffered from trying to be too many things at once. Microsoft made the mistake of marketing it as an iPad killer, but it's a different beast. It's a touch-screen ultrabook with ultrabook specs at a high-end ultrabook price. It's not a tablet as we have come to define it. I think all this, with the added confusion of the Windows 8 UI, has made the Surface a hard sell for Microsoft even though it's a pretty unique and useful device.
melgross
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melgross,
User Rank: Ninja
10/3/2013 | 10:54:28 PM
re: Microsoft Should Get Out Of The Device Business
Once you find out how "well" this software runs on a Surface Pro, you will lose your enthusiasm. In addition, try using it on your lap, another "great" experience.
Shane M. O'Neill
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Shane M. O'Neill,
User Rank: Author
10/3/2013 | 10:43:15 PM
re: Microsoft Should Get Out Of The Device Business
Probably because Windows was so successful on PCs for so long and it spoiled Microsoft. They're definitely having a hard time accepting that the same thing isn't happening in mobile.
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