Corporate | Windows 7

Is Windows Phone Going Down in Flames?

Corporate, Desktop & Mobile, Games & Consumer, Windows 7, Windows News No Responses »

Aug 092011

There’s an increasing amount of data that suggests Windows Phone, despite Microsoft’s massive marketing campaign and partnerships with any number of companies, is struggling to survive.

Microsoft always knew it’d be a hard road ahead for the platform. But as I mentioned in an eWEEK article yesterday, executives in Redmond probably harbored the hope that Windows Phone would enjoy steady and incremental gains over several quarters.

Yet that doesn’t seem to be the case. Research firm comScore is estimating Microsoft’s smartphone market share declined from 7.5 percent to 5.8 percent for the three-month period ending in June. That included both Windows Phone and the company’s more antiquated Windows Mobile platform, which is being phased out.

Meanwhile, the Seattle Post-Intelligencer estimated Microsoft’s possible revenue from Windows Phone at less than $613 million. That figure came from subtracting Xbox 360-related revenue–some $8.103 billion–from that of its overall Entertainment and Devices Division, leaving $613 million split between Windows Phone and a variety of much smaller projects such as Zune and Surface.

Even CEO Steve Ballmer’s acknowledging the adoption issues: During a July 11 keynote speech at the company’s Worldwide Partner Conference, CEO Steve Ballmer described the newish platform’s market share as “very small.”

Microsoft is betting a lot on its upcoming “Mango” update, due to final release sometime this fall. Samsung, HTC, LG Electronics and Nokia have all committed to building new Windows Phone devices preloaded with Mango, along with Acer and ZTE. Some 500 new elements to the update include expanded functionality for the Xbox Live and Office hubs, new multitasking abilities, and Bing deeply baked into the user interface.

But will Mango really reverse Windows Phone’s fortunes? I find that questionable, particularly since Mango will release just as Apple’s iPhone 5 (presumably) hits the market, along with a new generation of ever-more-advanced Android smartphones.

Microsoft is also pinning its hopes on a partnership with Nokia that will see the Finnish phone maker adopt Windows Phone as its mobile software platform. Following the announcement of that partnership earlier this year, a few analysts suggested that Nokia’s global presence would boost Windows Phone to new market heights within the next few years. Research firm IDC, for example, even went so far as to predict that Windows Phone would overcome both Apple’s iOS and Research In Motion’s BlackBerry franchise to become the second-ranked smartphone platform after Google Android.

According to its latest financials, though, Nokia’s bleeding market share, thanks in part to competitive pressures from the likes of cheap Android devices, and also because nobody’s willing to buy Symbian OS devices that’ll be effectively mothballed in a couple of quarters. If Microsoft ever harbored the hope that it’d inherit Nokia’s market share for Windows Phone with relatively little attrition, that’s looking highly unlikely. Nor does the partnership help solve Microsoft’s issues in the United States, where Nokia has a negligible smartphone-market presence.

As I mentioned yesterday, that leaves Microsoft betting that the Mango update, combined with a massive ad campaign and new manufacturing partners, will help change its trend-line among U.S. users. Now don’t get me wrong: I like Windows Phone, and I think robust competition always improves a market. But the current data suggests Microsoft’s smartphone dreams are in very serious trouble.

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Microsoft, Google Patent Battle: Uglier and Uglier

Corporate, Desktop & Mobile, Developer, Windows News No Responses »

Aug 042011

Microsoft and Google aren’t exactly bosom buddies, but a recent series of Tweets and blog postings by the respective companies’ executives threatens to make that already-tense relationship extra sour.

Earlier this year, a consortium led by Microsoft and Apple (which included Sony, EMC, Ericsson and others) outbid Google for 6,000 wireless technology patents held by Nortel Networks. Some of Nortel’s patents covered the LTE (Long-Term Evolution) technology used by many smartphones currently on the market, and could have provided Google the cover it needed to repel intellectual-property lawsuits from its rivals.

Now Google’s on the offensive, claiming that the consortium’s motive for buying those patents is being scrutinized by federal regulators. “Microsoft and Apple have always been at each other’s throats, so when they get into bed together you have to start wondering what’s going on,” David Drummond, Google’s senior vice president and chief legal officer, wrote in an Aug. 3 posting on The Official Google Blog. “Fortunately, the law frowns on the accumulation of dubious patents for anticompetitive means–which means these deals are likely to draw regulatory scrutiny, and this patent bubble will pop.”

He went on to claim that the Justice Department is “looking into whether Microsoft and Apple acquired the Nortel patents for anticompetitive means.”

Microsoft decided it was time for a street brawl.

“Google says we bought Novell patents to keep them from Google,” Brad Smith, Microsoft’s general counsel, wrote in an Aug. 3 Tweet. “Really? We asked them to bid jointly with us. They said ‘no’.”

The same day, Frank Shaw, Microsoft’s corporate vice president of corporate communications (say that three times fast), also Tweeted: “Free advice for David Drummond – next time check with Kent Walker before you blog.”

He included a link to an Oct. 28 email sent to Brad Smith by Kent Walker, Google’s general counsel, suggesting that “a joint bid wouldn’t be advisable for us on this one.”

Is that a smoking gun? Not necessarily–that short email doesn’t delve into many particulars over the deal itself. But if Microsoft intended to blunt Google’s attempt to make itself look like an aggrieved party, it’s certainly succeeded–the online chatter this morning definitely seems in Redmond’s favor.

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Internet Explorer IQ Story Was a Hoax

Corporate, Web Services & Browser, Windows 7, Windows News No Responses »

Aug 032011

Remember that report claiming Internet Explorer users were borderline morons?

Turns out it was a hoax. Shocking, right?

Last week, Canadian consulting firm Aptiquant published the “results” of a survey suggesting that IE users scored lower on IQ tests than those using, say, Firefox. A bunch of publications picked up the story and ran with it, at least until cooler heads began questioning the data. Not to mention whether “Aptiquant” existed at all. Oh, and it turned out that Aptiquant.com ripped off a bunch of stuff from the Web portal for a French company called Central Test.

“Central Test noticed the fraudulent use of its identity by Aptiquant, a Canadian company,” reads a note posted on the Central Test Website, “and denies any direct or indirect link with the above-mentioned company.”

For their part, the people behind “Aptiquant” were in full retreat. “The main purpose behind this hoax was to create awareness about the incompatibilities of IE6, and not to insult or hurt anyone,” claims the notice on its landing page. It also included a helpful list of “tell-tale signs” that the study was a fake.

Meanwhile, Daring Fireball’s John Gruber hints that the IE-IQ study, while fake, might not be entirely off-base. “I’d wager that if someone did a proper study on this, that IE users would tend to have a lower average IQ,” he wrote. “It’s just the nature of IE being the most-used browser, and the default on lower-priced and older PCs.”

Um, yeah. Because people who use the default browser on lower-priced and older PCs must be more idiotic than those using Firefox, Chrome or Safari. I’m sure a rigorous scientific analysis would prove that one in a jiffy. Actually, knowing Gruber’s work, I’d bet a dollar he thinks Safari users would average the highest on any given IQ test.

The only thing this Aptiquant “study” demonstrated, in the end, is that virtually any bit of data–no matter how unbelievable–is a viable candidate for the blogosphere’s great echo chamber. That’s why I didn’t write about it in the first place.

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Does Microsoft’s Bing Have An End Game?

Advertising & Search, Corporate, Desktop & Mobile, Windows News No Responses »

Aug 012011

The New York Times published an article July 30 describing Microsoft’s pushback against Google in search and search advertising. For anyone who’s been following the Bing-Google battle over the past few months or years, there’s not an enormous amount of new information in the piece (aside from how Microsoft will name its next three search-upgrade cycles after rock bands). Nonetheless, it’s an excellent refresher on the overall search wars, and how Microsoft seems determined to burn hundreds of millions of dollars (and employ a massive team of people) in order to stay in the game.

Bing has gained incremental but steady market share over the past two years, but that’s come at an enormous cost to Microsoft, whose online services division lost $2.56 billion over the last fiscal year despite a rise in revenue.

“This is a long-term journey,” Qi Lu, president of the division, told the Times. But that’s basically all you can say when you’re setting fire to a mountain of cash.

In addition to focusing on the granular features that supposedly differentiate it as a “decision engine”–including the ability to search for flights and shop for stuff–Microsoft seems intent on boosting Bing’s viability via partnerships with other companies. That includes Redmond’s deal with Yahoo to handle the latter’s back-end search, something that helped increase Bing’s market share. It also involves a deepening relationship with Facebook, which is also not exactly Google’s best friend.

Over the past few months, more and more Facebook features have found their way into Bing’s user interface. When you query Bing for specific people, for example, the search engine can offer Facebook information on the results page. If you’re traveling to a new city, such as Paris, Bing can tell you which Facebook friends live there. Bing Director Stefan Weitz once described this process to eWEEK as “infusing the emotional” into queries, and it certainly helps further differentiate Microsoft’s offering from Google.

However, Microsoft investors seem less than sanguine about the online services’ costs, inevitably raising questions about Bing’s end game. Does Microsoft want to topple Google and send it to the dustbin of history? Is it content with Bing as a strong second-runner in search, provided it can stem those gargantuan operating losses? Certainly Microsoft can’t divest itself of Bing entirely, given the increasing importance of the cloud to the company’s overall fortunes, not to mention its inability to cede anything to Google.

Whatever its ultimate goal, and barring some sort of massive collapse on Google’s part, Microsoft will likely have to satisfy itself with slow gains in the space.

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Microsoft Selling Bing Is a Non-Starter

Advertising & Search, Corporate, Web Services & Browser, Windows News No Responses »

Jul 262011

Should Microsoft sell off Bing?

Hahaha. No.

Reuters columnist Robert Cyran wrote a July 22 opinion piece suggesting that Microsoft chucking its search engine will boost the stock price and save its online division some cash. “The industry’s distant number two is a distraction for the software giant,” he wrote, “one that costs shareholders dearly.” He even calls out Facebook and Apple as potential candidates for snatching up Bing. Ha. Hahahaha.

As Mary-Jo Foley pointed out on her blog earlier today, there’s one little problem with Microsoft ridding itself of Bing: By this point, the search engine is so deeply integrated into Redmond’s “all in” cloud strategy that selling the unit would be tantamount to chopping off a limb. As explained (repeatedly) by Microsoft CEO Steve Ballmer and other executives, Bing’s data is heavily leveraged in service of other cloud offerings, and the engine itself is being hard-baked into Windows Phone and other products.

Sure, Microsoft’s online initiatives are losing a lot of cash. Guess what? Microsoft is sitting on a veritable Mount Everest of greenbacks. That situation won’t last forever (in fact, given the recent weakness in Windows and Windows Live Division revenue, it might end sooner or later), but for the moment, Microsoft can certainly afford to set however much money on fire in order to establish and maintain an online presence.

Indeed, an online presence is perhaps Microsoft’s most important goal at the moment. Traditional desktop-based software is transitioning, surely and not-so-slowly, to a cloud-based paradigm. Bing can serve as a sort of cross-platform “glue” between these growing cloud products. Give it up, and you rob pundits of the ability to argue over whether Microsoft is a dinosaur–because it will be a dinosaur, finally and irrevocably.

I’m sure investors (not to mention Microsoft’s accounting department) are irate at Microsoft’s online division burning through so much cash, but there’s really no alternative. If it’s any consolation to Microsoft, few people thought that Bing would survive as long as it has, much less (in conjunction with powering Yahoo’s search) seize nearly a third of the market.

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