Particle Debris (wk. ending 5/6) Slip Slidin’ Away

| Particle Debris

It seems that a product is either growing or dying, and when it starts to die, it’s incredibly hard to stop the slide. Here’s an analysis of IE, Firefox, Safari and Chrome market share from Computerworld that cites the often quoted Net Applications data. Even with IE9, the gains are offset by departures from IE8, so Microsoft is having a tough time stopping the slide. Firefox is on the decline as well — while Chrome and Safari had slight rises. See Gregg Keizer’s: “IE9 can’t stop Microsoft’s browser slump.”

Of course, one has to decide if one’s going to use a common basis, the desktop, or expand to the mobile arena — and I believe that’s what’s driving (mobile) Safari (iOS) and Chrome (Android) growth. This article didn’t go out of its way to make a distinction, but I believe that it’s the mobile growth that’s driving this effect.

The numbers tell the story, Microsoft’s late entry into mobility is taking its toll. For more insight all this, see Adam Hartung’s “Why Not All Earnings are Equal; Microsoft has the Wal-Mart Disease.” In this article, Mr. Hartung looks at the history of corporate performance, Microsoft’s recent financial performance, and finds that when revenue starts to stall, bad things happen.

When a company hits a growth stall, 93% of the time it will be unable to maintain even a 2% growth rate. 75% of the time we can expect it will fall into a no growth, or declining, revenue environment. And 70% of the time it will lose at least half its market capitalization.”

But Steve Ballmer seems happy.

Back to Apple. Tim Bajarin has been talking to his corporate clients, telling them what they have to do to compete with Apple’s iPad in: “What Will It Take to Really Challenge Apple?” His clients are not liking what they hear and have expressed the same concerns we have defined here at TMO: Android might be doing well on smartphones, but the tablet market is a different animal because iPads are an “I want” product as opposed to phones which are an “I need” product.

Many have told me that they fear Apple could ‘iPod> the market, meaning that Apple could end up being the dominant player in tablets, as it has been in mobile MP3 players. And these concerned vendors often ask what it will take to challenge Apple and keep Apple from dominating the majority of the tablet market in the future.”

Don’t you think it’s ironic that if a company needs to hire a consultant to tell them how to compete with Apple that they’re already too incompetent to do so — even after you explain it to them?

So what are the best tablets of 2011? Here’s a nice synopsis sizing them all up and summarizing their competitive prospects. I pretty much agree with the ordering — except for the RIM Playbook. “Top 10 tablets of 2011, the new leaderboard.” At the bottom, there’s a link to a photo gallery.

So what does it take to compete with Apple’s iPad? Specs? Screen size? Price? Memory? How about none of the above. I’ll unblushingly point you to an article by my colleague, Bryan Chaffin. “Only Two Companies Can Compete with iPad: Amazon & Microsoft.” Refreshing food for thought.

Are you running Windows XP on any PC anywhere? The National Security Agency (NSA) says don’t do that. And they, who monitor all those Chinese incursions and hacks, ought to know. AFter all, it’s 1995 technology. “The NSA recommends you upgrade to Windows 7.” I’ve long since dropped XP inside Parallels 6 and moved to Windows 7.

Are you writing secret notes to yourself on the iPhone or iPad with the Notes app? (“Wow, I’m so in love with January Jones.”) Have you believed they stayed only on your device? Better check. They may have leaked into the cloud by virtue of a careless iOS default. See: “Clearing up iPhone sync confusion.” This is getting ridiculous, isn’t it?

Have you ever paid more than US$5 for an HDMI cable? Here’s an eye opener from Geoffrey Morrison that explains the electronics behind the data transmission in HDMI cables. It’s part of your Saturday morning education: “Why all HDMI cables are the same.

What percent of Apple’s OS profits come from Mac OS X? What percent come from iOS? How might this affect Apple’s thinking going forward? How do Apple’s OS profits compare to Microsoft? The interesting results are here in Horace Dediu’s “Windows generates less than a third the profit of iOS + OS X.”  This is a must-read.

More Slip Slidin’ Away. (With homage to Paul Simon.)

Lately, I’ve written a little about what Apple may be up to with the data center in North Carolina. Here are some interesting thoughts from a guy I like and follow on Twitter: Jonny Evans. “Collected: Apple’s iCloud challenge.” He’s great at these kinds of summary articles that connect all the dots.

So there’s nothing to worry about with Apple tracking your travels (er, make that cell towers near by)? Nothing to worry about by uploading iPhone photos to flickr that have geolocation in the EXIF data? How about the conversion between your IP address and your name? Thank goodness one judge got educated. Ars technica had the story. I need get started on mystery novels that use all these goodies. Watch out Richard Castle!

Finally, if you haven’t had enough to digest so far, here’s a tour de force, five page summary and analysis of the smartphone patent wars at Computerworld. “Smartphone patent fight: ‘World War III’

When you’re a US$100B company, this is your life.

Comments

davebarnes

I am still running Windows XP under VMware Fusion.
I only run 2 programs under XP: IE7 amd IE8.
I use both browsers to test websites that I am building.
I also have IE6 under Windows 2000 under Fusion. Again, for testing as one of my clients still has 15+% of visitors (from very large corporations) using IE6.

I don’t have Windows 7 because I cannot find it for less than $140 USD. That makes IE9 pretty expensive and none of my customers have asked for IE9 testing.

wab95

John:

I think both Greg Keizer’s and Adam Hartung’s articles tell a story, in fact the same story but from different angles, and it’s a tale that should keep Redmond execs awake at night. It’s a story of displacement from the centre and lost glory. But it’s also a tale with multiple messages.

First, it’s a poignant reminder that being an outsized virtual monopoly is unhealthy, particularly for the company. Lack of competition, and being able to quash rivals at will with money and non-competititve practices breeds arrogance and a delusional sense of invulnerability. MS were so large that they could not feel the market shift around them, even though those shifts were seismic to the rest of the industry. MS felt these were minor perturbations that could be ignored until it was too late, and now they are left simply trying to protect and refresh the old PC business, even though the public is moving on. The moral of the story; competition is good and healthy for everyone, including the company. Apple, and those who like their products, should be glad that Apple have competition from the likes of Google and others, as these will keep Apple on its toes. Indeed, Apple does best when it has to come from behind, not unlike some athletes.

Second, controlling the whole widget hath its advantages. MS produces software. It has to work through OEMs to get that software into consumers’ hands, but those OEMs have to make profits to stay in business. If your allies are competing against each other, they may end up in a ‘race to the bottom’ that results in products (hardware) that is unexciting, unappealing and even off-putting to those consumers. This puts that business model at a selective disadvantage, once that nadir-equilibrium is reached, to a whole-widget company like Apple that can put out similar solutions that are simply better formulated. MS and its allies can spin ‘Apple costs too much’ scenarios all they want, savvy consumers are voting with their wallets and their feet, and appear to disagree. The upshot; take control of essential product lines. If your life depends on it, you probably want to control at least its vital components. We see this in MS with XBox (yes, I know they bought the technology, but you get the point), which continues to be attractive to consumers.

Third, diversity is a good thing, whether in plants, people or productivity. Being heavily reliant on one product, even if it’s a trinity like Windows/Office/IE is a recipe for vulnerability and irrelevance (yes, and extinction, but MS are not there yet - the company can still survive as a lesser version of its former self for years to come). The point; diversify one’s product lines.

Fourth, and this is the tough one, spending on R&D (MS spent 8X what Apple did in 2009) and innovation are NOT the same thing. What makes one company innovative and another less so is as complex a topic as are the people who comprise them and the whole question of what makes up human genius. But one lesson is clear, one not only has to think ‘out of the box’, more importantly, one has to have a bead on where the industry is, where it is going, have a strategy to get there before one’s competitors, and how to build that innovation around the consumer (not the enterprise) in a way that presents him/her with a complete and robust solution to a problem they may not have even known they had.

These are among the lessons one can glean from MS’s plight, at least in my view.

wab95

I should add another thought. My earlier post was done on the fly, having only had time to read the first two linked articles in this week’s PD.

On further reflection, and having now read Tim Bajarin’s piece, permit me to add, regarding my second point above, that another cohort that should be kept awake nights is Google and its tablet partners. Bajarin makes the same point as mine, albeit from a different but related angle, that controlling the whole widget is key to providing the end result - the user experience.

If true, then Google’s recent emphasis on citing the Microsoft model as inspiration and analogy for its own tablet model, being the purveyor of the OS for the Android tablets, and how these will trump Apple and its proprietary iOS, should be reconsidered by Google et al.

That same strategy resulted in a race to the bottom for competitors all using MS’s OS, which none of them controlled, to the end that they could afford little more than least common denominator low-end products. Private consumers and now the enterprise have begun to punish them for these woeful offerings. But Bajarin also notes that, by not controlling the whole widget, these OEMs are in no position to create and control the whole user experience - a point I inferred above. He notes that both Sony and HP have schooled themselves on Apple’s model, and are making course corrections by remodelling their business plans to go ‘whole-widget’ or at least ‘most-widget’ in the case of Sony (Google still does the table OS).

I see this as a gradual, even if tardy, convergence of understanding among observers, but more importantly, a stark warning to OEMs before they bet the tablet farm on the Google horse. They at least have to ask themselves what is their overall objective for the tablets.

But to even ask that question, they would need to have a strategy, or at least a vision, to begin with. Thus far, I’ve not heard any such question from that camp.

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