Is Microsoft/Nokia a sleeping giant or just sleeping?

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    Posted: 23 April 2011 11:10 PM #16

    I don’t think it is productive to talk about MS right now in the mobile space.

    They are not coming out with a phone until 2012.  Google came out in 2009 and it was not until end of 2010 that they started to really take off.

    So in 2 years we can bring this thread up to see were MS is. 

    They don’t have a presence to speak of so there is nothing to discuss regarding their impact on the mobile space.

    In regards Windows vs Mac OS, that is something worth talking about.  We are slowly making a dent and the momentum of switchers increases with each quarter.  The iPhone and iPad are too blame, but I think Windows is more to blame then anything else. 

    With Mac stores and people getting tired of a terrible operation system in Windows, they have been leaking customers for over 10 years.  In 10 years we will have 25% market share and 5 years after that it will become 50%.

    And those AFB members who bought aapl stock in 2009 will look back and pat themselves on the back because they saw this huge opportunity from day one. :-D

         
  • Posted: 23 April 2011 11:15 PM #17

    FalKirk - 24 April 2011 12:04 AM
    BillH - 23 April 2011 11:37 PM

    Tough conversation to have really.  Steve’s perspective, based on multiple decades of actual experience has a great deal of truth embedded within his central premise.  I respect that experience and accumulation of knowledge.  I really do but…,I believe it to be fundamentally flawed and have invested accordingly.

    Steves point of view really gave me some food for thought too. But I wonder if this is a case of the three blind men who examined an elephant. One felt the trunk and declared that the elephant was just like a snake. One felt the side and declared that an elephant was just like a wall. One felt the tail and declared that the elephant was just like a rope. From each blind man’s perspective, they accurately described the elephant. But none of them came close to actually describing the whole beast.

    It occurs to me that Steves may be fighting the good fight - trying to move people from other operating systems to Apple. Talk about a hard and thankless task. No wonder he feels that there is great resistance to Apple. In his world - from his point of view - he’s absolutely right.

    People don’t usually change their minds. They just die off and a new generation replaces them with new ideas. In today’s world, Apple is the 900 pound gorilla, Apple is the leader of the pack, Apple is who every other company is chasing. The consumers of today don’t have to be convinced that Apple’s products are any good. The don’t have to be convinced that Apple has more Apps than anyone else. They don’t have to be convinced that Apple’s products are the standard to which others aspire.

    Yes, Apple is and will continue to meet stiff resistance from the old-guard. But for the newer generation - the current generation - there is no need to convince them that Apple’s goods can do the job. It’s a given.

    100% agree.  I have fought the good fight for so long, and it is exhausting.  People do not pick their OS out or rationality.

    In fact, both experience and research studies have shown that most of life’s most important decisions are rarely made out of rationality, rather emotion. 

    I’d say people over perhaps 40 are the toughest converts.

    In any case, its a simple timing issue.  The new generation will not be yet in control in 3 years when MSFT starts to take hold.

    The good news, is I don’t think the nations next 10 years of MSFT servitude will be as bad as the last.  With MSFT investing more in HTML5 compliance and the open web, I don’t think they will try for such extreme lock in as they had before—- or even as much lock in as SJ is trying for / has with iphone.   

    One last thing…it seems MSFT really got scared after the DOJ suit.  Not only will this force them to be more open, but it accounts for their last 10 years of so called complacence.

         
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    Posted: 23 April 2011 11:21 PM #18

    Mercel - 24 April 2011 01:55 AM

    ...I would only have interest in owning MSFT if I knew the day before Ballmer announced his retirement.

    Therein lies the key to the judgment.

    I agree with Horace that, symptomatically, Microsoft has been dead in the water, and that the Post-PC market is sufficiently different from PC market. I also agree with Steve that they do have great R&D (in fact, they’re known for spending huge budgets on it, far more than Apple) as well as a foothold on the “good enough” crowd, let alone the Enterprise. (MS Office is a cash cow, nobody doubts that).

    But, if you haven’t, I invite you to read this scathing piece in Fortune that vividly illustrates how Ballmer shoots down creative ideas at Microsoft due to the strength of his convictions in current business models. And by “current” I mean 20-year-old business models.

    Steve, I would agree with you 10 years ago when Gates was still around. Even 3 years ago (before Kin and all that) they still had a chance, as did Nokia. But today I estimate Microsoft’s chances in the mobile market as no better than (1) HP/Palm’s, (2) RIM’s, (3) HTC, Samsung or anyone else who decides to uptake Android and form a tighter relationshiop with Google, (4) the collective force of the Huaweis of the world that can just take Android “remains” and build cheaper “good enough” phones than Nokia could ever dream of.

    I agree with Horace that the market is going to be a platform Oligopoly (rather than a Duopoly), and the space beyond iOS and Android is up for grabs. Microsoft is just one of the horses. Don’t bet on it to come out 1st.

         
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    Posted: 23 April 2011 11:26 PM #19

    omacvi - 24 April 2011 02:10 AM

    I don’t think it is productive to talk about MS right now in the mobile space.

    They are not coming out with a phone until 2012.  Google came out in 2009 and it was not until end of 2010 that they started to really take off.

    So in 2 years we can bring this thread up to see were MS is. 

    They don’t have a presence to speak of so there is nothing to discuss regarding their impact on the mobile space.

    In regards Windows vs Mac OS, that is something worth talking about.  We are slowly making a dent and the momentum of switchers increases with each quarter.  The iPhone and iPad are too blame, but I think Windows is more to blame then anything else. 

    With Mac stores and people getting tired of a terrible operation system in Windows, they have been leaking customers for over 10 years.  In 10 years we will have 25% market share and 5 years after that it will become 50%.

    And those AFB members who bought aapl stock in 2009 will look back and pat themselves on the back because they saw this huge opportunity from day one. :-D

    What you are describing sounds like what happens after a “tipping point” in consumer ‘tastes’. i.e. in a post techie world people will migrate towards what’s simple and synergistic. This is the basis of Apple’s entire ecosystem.

    Having been a technologist for 35 years I crave simplicity. 

      cheers
        JohnG

         
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    Posted: 23 April 2011 11:27 PM #20

    steves - 24 April 2011 02:15 AM

    One last thing…it seems MSFT really got scared after the DOJ suit.  Not only will this force them to be more open, but it accounts for their last 10 years of so called complacence.

    Good point, too. Notice how Google and Apple have been much more in the spotlight for antitrust candidacy than Microsoft. Happily for Apple, Android (and the space for 3rd or even 4th oligopolist in mobile platform) makes anti-trust an unlikely scenario.

    In the PC world, as Sponge points out, there’s also finally some uptick. Stive, you’re saying “89%” of PC/good-enough customers… Funny, five years ago you’d be saying “95%”... nice growth rate in mindshare for Macs!

    Edit: formatting

         
  • Posted: 23 April 2011 11:29 PM #21

    steves - 24 April 2011 01:35 AM
    afterglow - 24 April 2011 01:22 AM

    Like RIM, after lots and lots of promises leveraging its Windows savvy and market strength, Microsoft produced its own disastrous mobile platform, Windows Phone 7

    Wow, this article is lacking information, completely full of FUD and very biased.

    Steer clear if you want to leave with your brain intact.

    The Axim cannot be compared WM7, any more then Win3.1 can to Win7.

    So Steves.  Which Microsoft division do you work for?

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  • Posted: 23 April 2011 11:47 PM #22

    omacvi - 24 April 2011 02:10 AM

    I don’t think it is productive to talk about MS right now in the mobile space. They are not coming out with a phone until 2012…And those AFB members who bought aapl stock in 2009 will look back and pat themselves on the back because they saw this huge opportunity from day one. :-D


    Correction:  first phones due by year end.  Read the articles I linked to.  Especially the first one which details out some of the programming APIs, these phone look to be very capable to me.

    Here is the what I propose for this thread for those inclined.

    What I would like to see is some models developed by those on this forum who are skilled in the AFB projections. 

    Take a similar growth curve of iPhone for the first few years, and adopt it to MSFT/NOK.

    As ASYMCO touched on, their business models are very different.  MSFT licenses the OS.

    NOK sells the hardware and provides the distribution.

    The key to determining profitability here is the structure of the MSFT and NOK deal which is full of unknowns but is hinted to in the articles I linked to. 

    I don’t have really have the background to compute it all but I probably could by looking more deeply into the models used here by the AFB members for AAPL and making many assumptions. 

    Just off the top of my head…figure out how much MSFT makes from licensing each copy of Windows percentage wise and apply that to number of units estimated to sell.  I am sure they give big volume discounts to OEMs.  Assume that NOK gets a sweetheart deal.  Multiply by number of estimated NOK phones to be sold.

    I think I read Gartner/IDC actually estimates that NOK will be able to perform a 100% conversion of units sold from Symbian to WM7, so figure XX million phones sold by Nokia, those are all public numbers. 

    Add those numbers to a the monies gained from the combined MSFT app store / Ovi app stores, assuming perhaps a somewhat similar developer revenue split as AAPL has. 

    NOK also owns the leading Navteq mapping brand, i assume licensing costs can be found. i think even google uses this.

    i suppose i would take this total combined revenue, of both NOK and MSFTs (phone only/app store) revenue, and combine them, then maybe divide by 2 because in the absence of further information i am going to assume that NOK is getting a very good 50% split with MSFT for the time being.

    Read some of the releases i linked to earlier in the thread.

    Waiting till 2013 to invest in MSFT/NOK might be as poor of a decision as waiting till 2011 to invest in AAPL.

    My mistake over the years has been to buy the technology not the stocks…

         
  • Posted: 24 April 2011 12:52 AM #23

    steves - 24 April 2011 12:25 AM

    Remember that Windows 95 was generally far worse than Mac OS 7.5 at the time.
    Look at the world now.

    History repeats itself.

    Your comparing the wrong origins.  Try this.

    A preview release of NeXTSTEP (version 0.8) was shown at the launch of the NeXT Computer on October 12, 1988. The first full release, NeXTSTEP 1.0, shipped on September 18, 1989.[2] The last version, 3.3, was released in early 1995, by which time it ran not only on the Motorola 68000 family processors used in NeXT computers, but also Intel x86, Sun SPARC, and HP PA-RISC-based systems.

    They’ve been working on the core system since 1988. It’s scalable from handheld devices to mainframes, Unix at it’s core, secure, multi-touch enabled and currently running on over what?  200 million devices?  Apple Stores, Genius Bars, iTunes store with 200 million credit cards.  Macs, iPhones, iPods, iPads, Webkit, H.264, HTML5, proprietary chips.  Meanwhile Microsoft is just now getting around to porting Windows 7 to ARM. Win7 phone in 2012 isn’t even the price of admission.

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  • Posted: 24 April 2011 01:23 AM #24

    Apple has done a great job of identifying markets which they can exploit; defining what a product needs to be successful in that market; developing ?insanely great products? to fill the identified need; then executing the manufacturing, marketing and sales extremely well; and then supporting the growth of the product by improving it, adding variants and features yet keeping the number of SKU?s in control, building supporting ecosystems, keeping manufacturing costs and quality in line, and keeping tight control over operating expenses.  In short, they have doen an outstanding job in all phases of the business.  They have shown that if you make a great product to fill a need you can make a lot of money.

    In order to compete with them, Microsoft/Nokia will have to make a great product which at least will have to be as good as Apple?s will be when it comes to market, at least two years from now.  On the face of it the two companies have the money and the technical expertise to have a good shot at this.  They are far behind, however, and they will have to be innovative in their approaches and nearly flawless in their execution.

    Microsoft has some major problems to overcome.  Their history with new products has been very poor.  The Xbox 360 is now making money, but it cost them somewhere between 5 and 8 billion dollars before it made a penny, and it is still does not dominate the market.  The Zune was a failure in large part because Microsoft insisted on a subscription service which they believed it would give them the best profits, even though it had become clear that their customers didn?t want it, and because they felt that they didn?t have to make the product ?insanely great?.  The much heralded Bing is certainly not a game changer.  Acquisitions have been dismantled and destroyed with no obvious gain by Microsoft.  Kim, Encarta, Danger, and many more have come and gone.

    The company has become bureaucratic, with a lot of in-fighting and much of their technical staff disillusioned.  Also, apparently Google and Amazon are raiding their personnel.  For a feel of this I suggest perusing the MiniMicrosoft blog at http://minimsft.blogspot.com/

    I don?t see how Microsoft can succeed in this venture unless there are major changes in their culture.

    Nokia was a success story, but they got blindsided by Apple and really didn?t understand what was happening.  They still have a good market share but they are becoming marginalized, losing position in the more profitable market segments.  They clearly don?t have the technical expertise to develop a totally new mobile OS, their management knows it, and they are hoping that Microsoft will provide it.  Good luck.  I doubt that Microsoft will take guidance from Nokia as to what they want in an OS.

    There was a story that the Windows Mobile team had made good progress on a mobile OS but although it was derived from Windows 7 it was not Windows 7, sort of like the Apple iOS and the Mac OS.  Balmer nixed it because it wasn?t Windows as he knows it.  I don?t know how much of this is true, but if it is it reflects what I believe to be the inability of Microsoft to focus on the right stuff.

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    Posted: 24 April 2011 02:38 AM #25

    westech - 24 April 2011 04:23 AM

    There was a story that the Windows Mobile team had made good progress on a mobile OS but although it was derived from Windows 7 it was not Windows 7, sort of like the Apple iOS and the Mac OS.  Balmer nixed it because it wasn?t Windows as he knows it.

    I believe that’s the story I linked to earlier in this thread. I can’t emphasize enough that it is required reading before proceeding with further debates on the future of Microsoft. Seriously, if you haven’t read it, go read it.

    P.S. Did I mention you should read the story?

         
  • Posted: 24 April 2011 07:42 AM #26

    It seems that MS is unwilling to follow the Google path. There remains the cash flow from Windows software. How to provide low cost mobile software to manufacturers without compromising the cash from Windows. As we see with iPads, mobility causes one to be less dependent on a desktop, laptop, or netbook machine. Balmer is unwilling to risk a dime’s worth of Windows royalties with the bet on mobile.

    Seems Apple’s production planning for iPads may have allowed for competitors in the market. The continuing struggle to supply iPads to a waiting world is not the fault of Apple planners or partners, it’s that the competition just never showed up. And Wall Street can’t believe it either. How to price this?

         
  • Posted: 24 April 2011 08:13 AM #27

    Roman - 24 April 2011 05:38 AM
    westech - 24 April 2011 04:23 AM

    There was a story that the Windows Mobile team had made good progress on a mobile OS but although it was derived from Windows 7 it was not Windows 7, sort of like the Apple iOS and the Mac OS.  Balmer nixed it because it wasn?t Windows as he knows it.

    I believe that’s the story I linked to earlier in this thread. I can’t emphasize enough that it is required reading before proceeding with further debates on the future of Microsoft. Seriously, if you haven’t read it, go read it.

    P.S. Did I mention you should read the story?

    Yes, that’s the story.  Thank you.  I really shouldn’t blog late at night.

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  • Posted: 24 April 2011 09:14 AM #28

    Roman - 24 April 2011 05:38 AM

    I believe that’s the story I linked to earlier in this thread. I can’t emphasize enough that it is required reading before proceeding with further debates on the future of Microsoft. Seriously, if you haven’t read it, go read it.

    P.S. Did I mention you should read the story?

    Thanks for the link, Roman. I took your advice from your earlier link and read it last night.

    In my opinion, too many people think that Ballmer is the problem. I think Microsoft’s problems are far more pervasive than that. I think that Microsoft’s culture is the problem. Sure, Balmer has to go. But that’s only the first step in a very long journey.

         
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    Posted: 24 April 2011 11:20 AM #29

    I would like a good company to succeed and be recognized.  And MSFT has at least a few hundred top people (the Mac Business Unit) doing good work.

    But that’s far from saying that MSFT management is good.  Its been about 6 years since I purchased Entourage.  I liked Entourage, but it had a certain weakness (junk filter).  Since that time, as far as I know, not a single dime as gone from my pocketbook to MSFT.  The Kinect holds promise, but I bet MSFT sabotages it.

         
  • Posted: 24 April 2011 12:11 PM #30

    westech - 24 April 2011 11:13 AM
    Roman - 24 April 2011 05:38 AM
    westech - 24 April 2011 04:23 AM

    There was a story that the Windows Mobile team had made good progress on a mobile OS but although it was derived from Windows 7 it was not Windows 7, sort of like the Apple iOS and the Mac OS.  Balmer nixed it because it wasn?t Windows as he knows it.

    I believe that’s the story I linked to earlier in this thread. I can’t emphasize enough that it is required reading before proceeding with further debates on the future of Microsoft. Seriously, if you haven’t read it, go read it.

    P.S. Did I mention you should read the story?

    Yes, that’s the story.  Thank you.  I really shouldn’t blog late at night.

    I had read the story when it was originally posted, but I was aware of it earlier.  It was discussed on the MiniMicrosoft blog at http://minimsft.blogspot.com/.  This blog reveals a high level of angst in the Microsoft technical community.  It really is worth perusing.  Apparently Steve Balmer has managed to get rid of most or all of the senior leadership that disagrees with him.  The problem now isn’t just him.  The whole leadership has been crafted in his image.  Too bad for MSFT, but good for Apple and Google.

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