Betanews - Joe Wilcox

Microsoft, don't hang up on Windows Mobile, but do call for help

Joe Wilcox — Thu, 03 Dec 2009 23:24:19 -0500

It hasn't been a good day for anyone working on Microsoft's Windows Phone team. This morning, IDC made the ridiculous prediction that the number of iPhone/iPod touch applications would triple to 300,000 by end of 2010. Later, here at Betanews, Carmi Levy slammed Microsoft's Windows mobile strategy.

Yes, Windows Mobile is down -- really low -- but the operating system isn't bad. The mobile OS is good at the core, meaning the kernel, and multitasks pretty well. It's the user interface and partner model that needs a makeover -- and awfully fast. Microsoft is quickly falling behind Apple and Google, but there's hope. Android is bigger threat than anything Apple has got, because of competing licensing and partner models. Don't give up, Microsoft, but for frak's sake do get a move on.

For Microsoft's benefit I'll respond to IDC's prediction and then to Levy. My question of the hour: Who spiked the eggnog at IDC? Three hundred thousand iPhone apps? What are they drinking at IDC? There's simply no way that the iPhone/iPod touch ecosystem can support that many apps, unless there is huge application separation across geographies, cultures and languages.

Apple shouldn't want that many apps, and IDC had better be wrong. I will say that Apple app bloat would be wonderful for every competitor, including Microsoft. Too much of a good thing is too much of a good thing. Apps are already hard to find or differentiate at 100,000-plus. Triple the number would be beyond way too many.

Switching analysts, Levy writes:

With market share for Windows Mobile OS in freefall, vendors fleeing and its mindshare in meltdown, now is as good a time as any for the company to dive into a full-on re-think of its mobile strategy. Or an exit from the market until it can figure out what makes the most sense.

He strongly emphasized:

After 13 years and countless kicks at the can, it's time for Microsoft to call it a day. Kill Windows Mobile, consolidate resources and skills from the shuttered unit as well as Danger and Zune -- which continues to impress with technically sophisticated offerings that languish on store shelves -- and pick one cohesive strategy.

I won't disagree with Levy about Windows Mobile's dire straights. Microsoft has fallen behind, and there's no sign of any catching up. But I would strongly recommend against Microsoft exiting the mobile phone market. There is simply too much at stake. Smartphones are poised to be the next big computing platform, and the handset replacement market will be huge. The global mobile handset install base is about 4 billion, according to industry statistics, or about four times the PC install base. More than 1 billion new handsets are sold every year.

Most of the handsets in use are not smartphones, which already are beginning to replace so-called dumbphones -- slowly at first but increasing numbers over the next three or four years. Nokia has the sales volume, with nearly 40 percent market share in dumbphones and smartphones, worldwide. Apple has the huge applications lead. Google seemingly picks up new Android licensees by the day. Android went from zero worldwide smartphone marketshare in third quarter 2008 to 3.5 percent share a year later. Meanwhile, Windows Mobile share declined during the same time period, to 7.9 percent from 11.1 percent.

History Repeats

What bugs me about Microsoft and Windows Mobile: It reminds me of Internet Explorer, which Microsoft let languish for years. There's a saying that history repeats. It's my observation this theory applies to organizations as well as people. Microsoft is repeating with Windows Mobile past mistakes made with IE -- and not demonstrating the initiative to do better. Is somebody living in denial up there in Redmond?

Microsoft won the browser wars in the late 1990s only later to abandon the territory. Browser development essentially ended with IE6 in 2001 and didn't pick up again until Mozilla released Firefox five years ago. Now, there is fierce browser competition, driven in part by search revenues; all the while, IE continues to bleed usage share even after two major releases.

According to Net Applications, in November, IE usage share was 63.62 percent, down from 67.88 Percent in July. By comparison, Firefox share was 24.72 percent, up from 22.47 percent, during the same time period. Safari: 4.36 percent and Chrome 3.93 percent. To reiterate, Net Apps data reflects usage and not market share, and many people tend to use multiple browsers.

There's more than corporate history repeating. Browsers are important to the burgeoning smartphone market, where Internet Explorer trails even more than Windows Mobile. Microsoft must change its ways now. Hanging up on the mobile market is a bad idea. Letting Apple or Google woo away developers is even dumber.

Perhaps it's time for Microsoft to call on partners for help. HTC already is nicely skinning Windows Mobile 6.5. The Windows Phone concept, with dedicated "Start" button, is a nice concept, but a Zune-like phone with a Microsoft brand or co-brand would be even better. A Nokia-Microsoft team could greatly benefit both companies. The point: Microsoft has to do something, and tomorrow is already too late.

I tell you this: If Microsoft loses the mobile market, it loses the future. Once again, and I'm exhausted from blogging this, I say that Microsoft must launch a mobile Manhattan Project. If not, it will be buyers of all categories, including enterprises, hanging up on Windows Mobile.

Can there be a free Web if no one makes money?

Joe Wilcox — Thu, 03 Dec 2009 19:35:52 -0500

By Joe Wilcox, Betanews

Paywall is suddenly a hot topic as free content turns many longstanding businesses -- news among -- to apparent ruin. News Corp. Chairman Rupert Murdoch is mad as hell, and he's not going to take this anymore. This week Murdoch repeated his call for paid services during a U.S. Federal Trade Commission public workshop. "We need to do a better job of persuading consumers that high-quality, reliable news and information does not come free," he said. "Good journalism is an expensive commodity."

But how is the value of the digital content, whether news or some other commodity, determined when so much of it is free? Bill Buxton, principal researcher for Microsoft Research, briefly addressed this topic during an October talk at the Business Innovation Factory. "When the cost of goods approaches zero, the effective price inevitably for that product goes to zero," he said. "We've seen it in music, and the music pirates -- maybe they were bad, maybe they weren't -- were not causing it; they were just accelerating it. Every single other entity that goes digital has zero cost of goods. So, whatever's happened in music is going to happen in literature, news, cinema, theater and so on."

The prevalent theory is to fund all this stuff with advertising. "But if everything is going digital, going onto the Net, where is the money for advertising going to come from?" Buxton asked. The Microsoft researcher cares about digital content going free, "because I can't design an ebook [reader] without thinking about that stuff. Because I don't want to design the most incredible experience of reading electronic things...[if] there's nothing worth reading by the time I do it, because there are no professional authors, no professional journalists because they can't make a living."

A Free Web Advocate

Buxton applies one view of economics -- cost of production -- to the value of content produced. Wired editor Chris Anderson puts forth another and one related in book Free: The Past and Future of a Radical Price. In a July 8, 2009, interview with WNYC promoting the book, Anderson asserted that on the Internet "free really can be free." Nobody has to pay. "Google doesn't show up on your credit card bill," he asserted. (Actually its does on my credit card bill, once a year for Google Apps Premiere Edition.) Anderson supported his view, which does allow for combo free and paid models, by way of marketing and economic history and theory.

But I don't agree with Anderson's economic construct or Buxton's even though I agree that the value for all content is in rapid decline. Contrary to popular belief, economics doesn't derive from human culture or society, but from the natural world -- where nothing is really free. Air doesn't cost you anything. It's free; natural processes over billions of years paid for the atmosphere we freely take for granted. But the process of breathing isn't free. It requires the proper functioning of interdependent biological systems and input of energy, provided by ingested food. There's always some price.

The same principal applies to human society. For example, as an American I seemingly drive on the highway for free. But that free is a deception. I didn't pay to build the highway, but sales, state and federal taxes -- including the gasoline fueling the car -- pay to maintain the roads. The price is hidden, but it's there. My point: Nothing is really free. Somebody pays. But with the Internet and proliferation of seemingly free content, will online consumers pay fair value for producing it? That question is at the core of Murdoch's desire to erect more paywalls and his threats to pull out of Google search indexing.

Modern economic theory is too hung up on prices, when value is more important. Often pricing is independent of value, as should be apparent from the housing market collapse. An artificial debt-driven bubble drove up home prices, which didn't make the real estate more valuable. For a teen the value assessment might be: Is it worth cleaning my room so my parents won't yell at me or will I get more benefit from chatting with my friends online? There is an associated value assigned to the action, but not an associated price.

People will pay for anything for which there is perceived or actual value. The problem with digital content is the overwhelming access to stuff produced nearly at no cost -- whether pirated music or aggregated news -- for which online users find enough value. They aren't willing to pay.

Gatekeeper to the Web

I sometimes blame Microsoft -- and its competitors even more -- for this free-out-of-control mess. In March 2001, the company outlined and ambitious Web services strategy called HailStorm. I wrote for CNET News.com:

HailStorm is a group of services, using Microsoft's Passport authentication technology, meant to provide secure access to e-mail, address lists and other personal data from virtually anywhere via PCs, cell phones and PDAs (personal digital assistants). The catch? Users of the services will be required to pay a fee to use them. Analysts said that if the HailStorm model is widely adopted -- and if people will pay a premium for security -- the days of ad-subsidized Internet services, such as free e-mail and messaging, may be over.

Microsoft planned to make Passport authentication -- and the paid services they would enable -- broadly available. But within a year after the announcement, Microsoft abandoned HailStorm and pulled back its ambitious single sign-on authentication system. Security and privacy concerns and business and technology limitations were among the reasons. Perhaps most significant: Competitor attacks -- what I call competition by litigation -- by way of legal complaints filed with the U.S. FTC and Justice Department. The prevailing theory: Microsoft would become gatekeeper to the Internet, if not checked.

A gatekeeper did come. Google is the master of free, around which it makes billions through keywords, advertising and other services related to search. Google search is the means by which most people access Internet content, for free. Free access, supported by SEO (search engine optimism)-driven aggregated digital content, creates perceptions of value -- what the content is worth. Too often, nothing is the value. But even that search-engine found content comes from somewhere. Somebody pays to produces it.

Perhaps if the content was harder to get at, such as going behind that paywall, people would value it more. That is if they can find it through search. Paywall content might not be accessible through search. Applying the old tree-falls-in-the-forest axiom, does content that nobody can find through Google really exist? How can someone pay for something they can't find?

During the Business Innovation Factory talk, Buxton told of having content in a book changed because the editors couldn't verify the information via Google. The contentious issue: Who invented the chalkboard -- or in the nineteenth century what was called the slate. "I realized, 'Oh, crap. We are screwed,'" Buxton said. "If it's not on Google, if it's not on the Internet, it doesn't exist."

Microsoft's Bing Bar takes the clutter and complexity out of browser toolbars

Joe Wilcox — Thu, 03 Dec 2009 15:33:59 -0500

By Joe Wilcox, Betanews

I despise browser toolbars. They're ugly, clutter up the browser and reduce viewable content space. But unexpectedly, I've found a better toolbar. This old crankypuss might soon be spending time at the new Bing Bar, which is a helluva good name, by the way.

There's much to like about Bing: The advertising, the name and most importantly the approach to user interface design. I love Bing TV commercials, by the way. Good advertising uses familiar motifs, scenarios and situations, stuff that most anyone can relate to. Familiarity is important. Who can't relate to information overload -- too much needless information coming too fast to process?

The Bing search page user experience (UX) is in many ways superior to Google, by the way the home page makes information easily available without loads of complexity (Sure, we could argue day and night about search term accuracy). Good design also should lead to discovery. Those photos on the Bing home page aren't just pretty. Moving the mouse across the image reveals hidden boxes and text -- reminiscient of photo comments on Flickr -- that lead to additional searches. For example, on today's pic: "These fish are swimming in the last confederate state to be admitted to the Union. Where are they?"

The UX carries forward to Bing Bar, which replaces MSN Toolbar. Bing Bar is UI and UX design done surprisingly well, for starters because of its spare appearance and generous use of white space. Bing Bar doesn't feel cramped or cluttered, characteristics that define most browser toolbars. Then there are tools for greater informational discovery, which are good for the user and for driving additional search traffic to Bing. Bing Bar is available for Internet Explorer 6, 7, 8 or Firefox 3.x

Buxton Bucks Convention

From broader UI and UX perspectives, not just Bing, I'm really liking many recent Microsoft products, which are cleaner, less cluttered, less complex and full of features available really only when needed. Windows 7 is one example, for sure. I'm convinced that one man, Bill Buxton, principal researcher for Microsoft Research, is main catalyst driving dramatic UI and UX changes throughout Microsoft. Buxton talks about good design broadly, culturally, historically, socially and software developmentally. He joined Microsoft in 2006, and it wasn't long after that the company's UI design started to dramatically improve. Some leaps were already midway, such as Office's version 2007 UI makeover.

Buxton recently spoke about UX at the Business Innovation Factory. Regarding technology, he asserted: "Without informed designed, it's more likely to be bad than good." Buxton emphasized: "It's an ethical obligation to make best efforts. To make the right decisions." Whoa, who talks ethics in design?

Buxton has a stereotypical mad scientist look, and he rambles like one. He looks to me a little like Uncle Monty from "Lemony Snicket's A Series of Unfortunate Events." I've embedded the video from his speech so you can see.

"For every 'generation n technology,' its role is to fix the problems of n - 1, but keep the good stuff," Buxton told BIF attendees in October. "But what about that? That's also a value judgment. It's all about ethics. It's all about values."

Bing Me Values

No question, user interfaces and the experiences they bring are all about values -- the values of a country, society or corporation. Search is intrinsically about values, because the search engine makes a value judgment about what's important to the searcher. Perhaps I should say "values judgment." Often that value judgment is wrong, which is one of the points of Microsoft's Bing "Search Overload" marketing. Too often, keywords don't lead the searcher to what's important to him or her.

In the late 1990s, when Yahoo was a search leader, people hired by the company made the value judgments about search rankings. In this decade, Google's algorithm makes the value judgments, and not always around the most sensible criteria. I consistently find that in helping my daughter do background research for a history paper on the French Revolution that Google search leads to popular destinations that are meaningless for her topic.

Bing Bar -- and this week's exciting Bing Maps improvements -- are values-oriented products. They reflect changing Microsoft values about what constitutes good user-interface design and values for making search more meaningful. A common undercurrent for both -- and so long it must be topic of a future post -- is storytelling. I predict that storytelling will be a major Bing differentiator over Google search in the coming 12 months.

Funny aside: Bing Bar also is a confection. Here's one of many recipes on the Web for making Bing Bars. Or perhaps you'd like to buy a Bing Bar from Palmer Candy, which debuted the candy bar in 1923.

Apple, can you do for video what you did for music -- perhaps saving us all from NBComcast?

Joe Wilcox — Wed, 02 Dec 2009 21:36:17 -0500

By Joe Wilcox, Betanews

Last month's rumors about Apple talking to networks and Hollywood about TV show subscriptions got me thinking about what CEO Steve Jobs & Co. should do for making video content more accessible. I'm musing even harder today, given the pending announcement that Comcast will buy NBC Universal. The deal should have wide-ranging impact for cable and online TV content and companies that distribute it -- everyone from Hulu to Apple.

Now would be a really good time for Apple to rethink its video content strategy and make changes that will hold what I'm unaffectionately calling NBComcast at bay. Since I'm in one of my know-it-all moods, I'd like to offer a few suggestions to Apple. It's time for Apple to leverage its strengths by offering something like "Complete My Album" or "Upgrade to iTunes Plus" for movies, TV shows and music videos. Such iTunes features could change how people electronically rent or buy video content.

Timing is right to do something, given recent buzz about Hulu and YouTube charging for TV shows. Then there is NBComcast to consider, which merger should include partial Hulu ownership. Maybe Apple should renew those rumored Hollywood/TV network talks. The suits suddenly have reason to worry about NBComcast and what muscle it can wield over program development and distribution.

An Apple deal for watching programming through iTunes -- at the rumored $30 a month -- ought to look a helluva lot more appealing with Comcast gobbling up NBC. Apple should have most of the billing and technology infrastructure in place from renting movies. Surely it couldn't be too hard to add TV shows.

Something else in favor of making some big iTunes video changes: Paywall is a suddenly popular topic thanks to News Corp. Chairman Rupert Murdoch. Not that Apple gives away much. At iTunes it's pay, pay, pay. Some of the paying is whacky. Yesterday, I stumbled on obscure, almost-one-hit-wonder-band Gun Hill Road at iTunes Store. Apple sells 1971 album "First Stop" for $4.99 -- say, a good deal for 22 songs -- but $1.29 for each track. Huh? What kind of pricing strategy is that -- more than 28 bucks at the single track price? But Gun Hill Road is off topic.

Back on topic: Apple, like everyone, is cranking out promotional emails for the holidays. Occasional iTunes sales and promotions do some of what I want to suggest ( and hopefully I haven't missed any important perpetual promotions or features): iTunes Store should apply the upsell "complete my this or that" music strategy to video. It worked for music, why not video? Of course, content copyright holders and distributors would have to be willing parties to the changes (if rumors be true about TV subscriptions, Apple already is talking to the right copyright holders). My requests/suggestions:

Complete My Purchase: People renting movies, particularly in HD, would be given a limited-time option to apply their rental fee to the full purchase price. So, if someone rents "Push" in HD for $4.99 and really likes it, he or she could buy the movie for $15 instead of $19.99.

Complete My Season Pass: Similarly, if someone buys a few episodes of "House," he or she could purchase the remaining Season Pass without paying for the already purchased ones.

Upgrade to HD: Someone who had purchased movies, music videos or TV shows in standard definition could go HD for the price difference between the formats. Long ago, I bought "Battlestar Galactica, Season 1" from iTunes in standard definition (HD wasn't available at the time). I would pay the difference for HD.

I'm convinced that options to upgrade to HD or purchase from rentals would extend the utility of the iTunes Store. How many more people would rent, if they knew of an option to buy discounted from their rental? How many people would buy standard definition today knowing they could upgrade to discounted HD when available?

Surely the licensing issues can't be insurmountable. Already, Apple offers standard versions with HD purchases for iPhone and iPod touch. Content providers would profit from the upsell, right? I ask that as a question, not knowing margin differences for rentals versus sales. I know that margins tend to be higher for subscription music content than tracks that are sold. I don't know the breakdown for video content.

So in closing I have to ask: What suggestions would you make to Apple about iTunes Store video content? Additionally, what do you think of Comcast plucking the NBC peacock's feathers? Please answer in comments.

Five compact digital camera myths and realities

Joe Wilcox — Wed, 02 Dec 2009 19:23:55 -0500

By Joe Wilcox, Betanews

The holidays are fast approaching and geek gift shopping with it. This year I will post several shopping primers for making the best decisions in buying tech gear. This first installment is about compact digital cameras and what features do and don't matter. It's particularly important because geeks used to buying PCs might wrongly think that more of this or that matters for digicams. Misplaced emphasis on the wrong features can lead to disappointing purchases.

Some background: I'm no professional photographer, but I do know digital photographic gear. I bought my first digital camera in 1997, the 1-megapixel Kodak Digital Science D120 (OK, I didn't know better). The D120 was one of the first 1-megapixel compact digicams selling for (barely) under $1,000. I purchased additional compacts from Canon, Kodak, Olympus and Sony over the next couple of years, but no compact satisfied until the 3.3-megapixel Canon PowerShot S20 in summer 2000. I got plenty of use from the S20, including shooting the opening of the first Apple Store in May 2001.

Since 1997, I've used about two dozen different digicams -- compacts and digital SLRs -- from Canon, Kodak, Leica, Nikon, Olympus, Sigma and Sony. These include, since 2007, the Canon EOS 50D, Nikon D200, Nikon D90, Olympus PEN E-P1 and Sigma DP1. When I say that I used these digicams, I don't mean tested.

In this first primer, I'll offer tips specifically for buying compact cameras that also can be applied to entry-class dSLRs. A follow-up post will offer my holiday pics for compact digicams that should satisfy the most discerning gadget geek or photographer -- even the pros. By the way, I define a compact as having a non-removable lens, meaning four-thirds, micro four-thirds and rangefinder digicams belong in a different category.

1. Megapixels don't matter. One measure of PC greatness is processor clock speed or number of cores. Greater often is better, but the same isn't true for compact digital cameras. More megapixels can actually be worse, because of compact digicam's smaller sensor size. Increasing number of pixels over a smaller CCD or CMOS sensor causes distortion, artifacts and grainy appearance -- or noise, as ISO increases.

More megapixels doesn't mean better; this photo was taken with 5 MP compact in 2003

For many smaller compacts, 5-megapixels delivers optimum performance. I took the picture above in 2003 with the 5MP Canon PowerShot G5, which produces sharper and more pleasing photos than many, newer compacts sporting more megapixels.

Among the compacts I'll recommend in a later post, nearly all are 10-megapixels -- not 12 or 14 MP -- and these cameras are designed to appeal to more experienced photographers. By comparison, more megapixels is usually good for dSLRs, where the sensor size is much larger and the pixels aren't as tightly packed. More typically is better.

Here's another perspective on why more megapixels don't matter. To double the resolution, number of megapixels multiplies by four. So a 12-megapixel image has twice the resolution of a 3-megapixel image. Apple's iPhone camera, at 3 megapixels, may not take the best photos, but plenty of people print or post acceptable images. Meaning: More megapixels isn't necessarily better.

2. Sensor matters more than megapixels. Digicams with larger sensors can produce much better photos even if megapixels are less than a camera with smaller sensor. With larger sensors, pixels are less compacted. As previously mentioned, as pixels compact across a smaller surface, image quality degrades and artifacts increase. For example, photos tend to be noisier as light decreases, in essence because of how little light must spread out over so many pixels.

The effective size of a 35mm frame is 36mm x 24mm, which is the sensor size of the "full frame" Canon EOS 5D Mark II -- a 21-megapixel dSLR. Many lower-costing dSLRs use "single frame" sensors that measure 16mm x 24 mm, such as the 6-megapixel Nikon D70. By comparison, the Canon PowerShot S90 -- a compact I would recommend -- is 10 MP with 1/1.7-inch CCD sensor. The Nikon P6000 sensor is same size as the S90 and a shocking 13.5 megapixels.

A "prime" lens delivers outstanding clarity but narrow depth-of-field

Pixel count isn't the only consideration. Smaller sensors require a shorter focal length to achieve the same angle of coverage as larger sensors. This results in numerous photographic irregularities along most of the focal range, such as vignetting.

Sensor quality and size are hugely important, particularly in compacts, where there are already so many compromises compared to dSLRs.

3. A good lens means everything. This rule is more true for dSLRs, where lenses can be swapped. Photo pros know that the lenses are more important than the camera body, and they hold their value and remain useful longer -- decades. Even for compacts, lens is hugely important but often overlooked in the sales process. D`oh, should it be rocket science that the optics -- the glass through which the photos are captured -- matter big time? Some general tips:

Optical quality matters. For example, Sony uses a higher optical quality "G" lens on its 10-megapixel Cyber-shot WX1/B. Ask about the glass when buying a compact. Canon and Nikon are optics companies.
Fixed focal length -- "prime" -- or shorter focal length zoom lenses are better; images will be sharper with fewer artifacts. Long zoom ranges are generally undesirable in compact cameras with small sensors and more megapixels.
The more light the better, particularly for compacts. The PowerShot S90 or Leica D-LUX 4 come with f/2 lenses which let in lots of light, overcoming some of the limitations of the camera's smaller sensors.

4. RAW is more desirable than JPEG. At least RAW should be an option. Most compacts only shoot photos in JPEG format, a flat file that can be manipulated with limitations. RAW isn't a format but raw data coming off the camera's sensor, and it can be manipulated extensively by numerous photo-editing software applications. Example: I've taken pictures at dusk that were too dark because of available light. But the camera focused correctly. Using software, I could change the exposure and fill-light on the RAW image, salvaging the photo. A JPEG photo would have been throwaway.

Some compacts, like Canon PowerShot G series, shoot RAW

Some compacts that can shoot RAW: Canon PowerShot G10, G11 and S90; Leica D-LUX 4; Panasonic Lumix DMC-LX3K; Sigma DP1, DP1s and DP2.

5. Compacts don't match dSLR performance or output. I have yet to see a compact digicam that can equal or better a dSLR. But some come close in some areas. For example, the Sigma DP1, DP1s and DP2 all deliver exceptional image quality -- better than even some dSLRs. It's a combination of a high-quality "prime" lens, dSLR-size sensor and unique "Foveon" sensor technology that captures red, blue, green in layers -- reminiscent of film. Color reproduction is exceptional, and there is no discernible vignetting or other artifacts in RAW photos. Disappointingly, these Sigma compacts also are slow shooting, and they're ergonomics are rough, at best.

A different example: I recently started using a Leica D-LUX 4 compact, which has surprisingly fast shutter response. I have yet to see the shutter lag so common in compacts. Shutter response is one of the major benefits of choosing a dSLR over compact. Click. Click. Click. But speed of shooting doesn't change that the Leica camera comes with a smaller sensor and is handicapped by other limitations common to compacts.

The point: Compacts are great, and it's even possible to use one shooting RAW to fill for a dSLR. But holiday shoppers will want a dSLR if better performance, greater photographic quality and choice of lenses are priorities.

In a future post, I will pick the top compacts for Holiday 2009 shoppers. Please watch for it.

[Photo Credits: Joe Wilcox]

Microsoft's 'Black Screen of Death' denial solves the blame not the problem

Joe Wilcox — Wed, 02 Dec 2009 00:26:26 -0500

By Joe Wilcox, Betanews

Microsoft's response to the so-called "Black Screen of Death" problem is a throwback to an older and equally ineffective strategy -- what I have called "security by PR." Rather than managing the problem, Microsoft is managing the reaction. That simply is the wrong approach to quality customer service or instilling users with confidence about using Windows. With Windows 7 only in market for about six weeks and the holiday sales season just started, the company's priority should be fixing the problem rather than denying culpability.

Recap: Some Windows users are complaining of a Black Screen of Death (KSoD), where the operating system essentially fails to fully load at startup. KSoDs aren't new, but there have been recent reports suggesting an increasing number starting in mid November. Last week, British security firm Prevx claimed that November 10 Microsoft security updates caused recent KSoDs. However, in a late-day blog post yesterday, Prevx backed away from its assertion:

"Having narrowed down a specific trigger for this condition we've done quite a bit of testing and re-testing on the recent Windows patches including KB976098 and KB915597 as referred to in our previous blog. Since more specifically narrowing down the cause we have been able to exonerate these patches from being a contributory factor."

The post followed Microsoft's denial by many hours. But Prevx's update doesn't exonerate Microsoft from having mishandled the situation, because Windows security may yet be an issue. Prevx still identifies a registry problem, just one it now asserts could be caused by malicious software:

The issue appears to be related to a characteristic of the Windows Registry related to the storage of string data. In parsing the Shell value in the registry, Windows requires a null terminated "REG_SZ" string. However, if malware or indeed any other program modifies the shell entry to not include null terminating characters, the shell will no longer load properly, resulting in the infamous Black Screen with the PC showing only the My Computer folder.

The malware modifying the registry caught my attention, and Microsoft mentions it in yesterday's blog post denying culpability as deflection of responsibility:

We've conducted a comprehensive review of the November Security Updates, the Windows Malicious Software Removal Tool, and the non-security updates we released through Windows Update in November. That investigation has shown that none of these updates make any changes to the permissions in the registry. Thus, we don't believe the updates are related to the 'black screen' behavior described in these reports.

We've also checked with our worldwide Customer Service and Support organization, and they've told us they're not seeing 'black screen' behavior as a broad customer issue. Because these reports were not brought to us directly, it's impossible to know conclusively what might be causing a 'black screen' in those limited instances where customers have seen it. However, we do know that 'black screen' behavior is associated with some malware families such as Daonol.

But neither Microsoft's denial nor Prevx's retraction resolve the issue or answer why some Windows users report experiencing new KSoDs after installing Microsoft security updates. What if, say, the security updates corrected changes made by malware that results in black screens? I certainly have seen Windows PCs rendered partially unusable after removing malware. Example: Networking features disabled after some spyware is excised.

The point: Prevx only just made its assertions about Microsoft security updates and KSoDs last week, offering up a fix, too. How can either company definitively say that Microsoft security updates aren't involved? In the scenario I arbitrarily suggest, Microsoft could still claim its security updates weren't the cause, since the updates would fix changes made by malware. That's great security by PR.

Even if the security updates aren't the cause, Microsoft should show customers that it's aggressively looking for what might be causing the KSoDs -- particularly if malware might be mucking with the Windows registry. I expect more from Microsoft. Security by PR shifts the blame. Real security seeks a solution for the benefit of customers that might have comprised systems and, more importantly, to protect other users who might be assaulted by others' infected Windows PCs. Afflicted customers don't want to hear what's not causing their KSoDs. They want to know the cause and how to fix the problem. Microsoft's denial fixes nothing but blame.

The holidays have historically been a time of increased malware attacks. That's all the more reason for Microsoft to show customers -- and even malware writers planning holiday attacks -- that it's prepared for most anything. But is Microsoft really on the job, or are too many security professionals without a job because of the company's 5,000-plus layoffs? I'm not feeling confident because of Microsoft's response to Prevx? Are you?

My Windows 7 confession (and why you should confess, too)

Joe Wilcox — Tue, 01 Dec 2009 18:56:34 -0500

By Joe Wilcox, Betanews

They say that confession is good for the soul -- or the mind. I'll make mine but insist that you read no further unless you're willing to make yours in comments. Deal?

My confession is the real reason for running Windows 7. In September, I wrote "Why I chose Windows 7 over Snow Leopard (and why you should, too)." In that post, I explained about Windows 7 being my primary operating system since January on two different Sony VAIO notebooks (I see from comments how many Betanews readers remember the Sony rootkit and just love the company for it). As I explained in that post, two primary reasons led to my picking the newer version of Windows over Mac OS X: Windows 7's fresh, new user interface and VAIO Z720 hardware features -- mainly higher-resolution display -- compared to 13-inch MacBook Pro. But neither of these reasons is why I stuck with Windows 7, even for the productivity gains realized from using the operating system over Mac OS X Snow Leopard.

As much as I like Windows 7, there is still no iLife equivalent for Windows. The need -- the want -- for iLife has left an empty longing for Mac OS X. After all, people buy computers for applications not operating systems. I blame Microsoft's severely back-asswards content strategy for my terrible Mac OS X longing.

The company controls the last-generation application stack: Office-Windows-Windows Server. Office productivity suites defined PC computing during the 1980s, 1990s and early 2000s. There is enormous infrastructure and huge revenues tied up with this aging, and quickly becoming ancient, application stack. Microsoft seeks to preserve this aging stack through productivity suite ties to SharePoint Server and with new versions like Office 2010, which is beta testing now and due for release in June next year.

The application stack of the present and future is in the cloud. Most people generate content on a non-PC device, manipulate or edit on a PC and share via the Internet -- perhaps by email or more likely Facebook or other online community or service. Granted, text is often created on a PC, but who really uses Word, other than a few stuck-in-the-past businesses -- and, of course, Microsoft? (If you use Word, it's OK to confess.)

Wordprocessing is a commodity. The basic formatting features most people need are available in most any product using text -- blogging service, email client, instant messenger or online community, among many others. None of these products require a separate, dedicated wordprocessor, with Microsoft's Outlook being one of very few exceptions (and there is a longstanding bug -- hopefully not a feature -- that sends attachments to non-Outlook clients as unusable DAT files).

The majority of content people produce today is either textual, using features already part of the aforementioned products, or audiovisual. For example, the PowerPoint of the 2000s is the Web-hosted photo slideshow. Photos and videos easily top the list of content that most people regularly produce and want to share with others. Music is another, although for most of it there are sticky copyright considerations.

Apple understands and has taken a commanding lead in both consumer and professional markets for digital audio, photo and video content creation. Apple controls an applications stack, too: Final Cut Studio-Mac OS X-Mac OS X Server, and it's hugely popular among people that professionally produce content. There's a smaller application stack, with iLife at the front end.

Microsoft needs to understand how important iLife is to the Mac, and how much more important an iLife-equivalent would be to Windows. The company's recently renamed Windows & Windows Live division is supposed to deliver something during MIX10, which last I checked is scheduled for mid-March. By the way, any Microsoft employee thinking that Windows Live Essentials and iLife are comparable is seriously delusional.

So, I've been pining for Mac OS X because of iLife, which would be hugely useful for my work as a journalist. But something has held me back from giving up Windows 7, and it also is part of the new cloud and content stack Microsoft has failed to adequately embrace: Google Chrome. I confess. I'm a Chrome junkie. The browser is fast, elegant and (seemingly) safe, all without those nagging warnings that make Internet Explorer 7 or 8 a spiteful nuisance (C`mon, you know it's true. Confess!). There's something about the Web and cloud content that is simply better on Chrome, but that's topic for another post.

As the official Chrome for Mac beta approaches -- albeit minus many features -- I find myself considering putting away the VAIO Z720 for the 13-inch MacBook Pro. Yes, I'd give up the simply gorgeous 1600 x 900 LED display, but I could always run Windows 7 and Mac OS on the Apple laptop.

The new application stack is the cloud, and Google gets it perhaps even better than Apple. I've got to wonder, will I be running Chrome OS in 2011? Will you? OK, so it's time for your confession. For what applications do you run either Windows 7 or Snow Leopard?

Where did Apple's Black Friday sales go?

Joe Wilcox — Tue, 01 Dec 2009 13:45:16 -0500

By Joe Wilcox, Betanews

Yesterday, Piper Jaffray analyst Gene Munster issued a report indicating that brick-and-mortar Apple stores sold 8.3 Macs per hour on Black Friday versus 13 per hour in 2008. Will Macs sales really be down this holiday and could it be because of, gasp, Windows 7?

Microsoft and its PC partners didn't have anything really new to offer consumers last holiday season. Macs had -- and still have -- a newness for many holiday shoppers, the majority of which already use Windows PCs at home or work. The only real barrier to buying a Mac during Holiday 2008 was price: Spending $1,000 or more. Same barrier remains this year.

Another difference -- and this must have some sales analysts scratching their heads: State of the economy. Holiday 2008 seemed so much worse, because of the late-September stock market crash that sucked billions of dollars in savings and equity out of world economies. Surely a year later things should be the same or better, not worse.

Yet another difference: PC manufacturers pulled back inventory for Holiday 2008, which turned out to be a smart stocking decision. Ahead of Holiday 2009, PC sales improved, despite truly gloomy analyst forecasts. Last week, Gartner predicted that worldwide PC sales would grow year over year in 2009, rather than decline as previously predicted. If more people are buying PCs, surely that should be good for Apple, right?

The reasons for Apple's Black Friday sales slowdown are probably more complex, and it's yet too early in the season to write-off Macs. But if there is a sales slowdown, even super secretive Apple will tell all. Poker players look for a "tell," some behavior that reveals what kind of hand the opponent might hold. If Mac sales are slower, Apple will tip off by discounts, promotions or other activities ahead of Christmas Day. Meanwhile, here is my shortlist of factors likely affecting Mac sales -- and they all in some way or another have to do with economy:

1. The econolypse's effects will impact holiday sales more this year than 2008. Absolutely, the stock market crash and uncertainty about larger economic collapse hurt Holiday 2008 sales. In November a year ago, many credit card companies started raising interest rates and minimum monthly payments, which also curtailed holiday spending.

A year later, consumer confidence may be higher, but not necessarily spending power. I'd contend that more people had more to spend a year ago than today:

According to analyst estimates, in the United States one in five homes is worth less than the mortgage obligation. Credit Suisse predicts that unchecked the number could reach nearly 50 percent by end of 2010.
Unemployed rose all year, now above 10 percent nationwide.
More credit cards have raised interest rates and minimum payments, squeezing spending from the majority of Americans carrying some debt.

It's not surprising then that a recent Nielsen study found that 42 percent of Americans plan to spend less this holiday than last year and another 44 percent plan to spend about the same.

2. Consumers shop differently during the holidays than any other time of year. They wait for sales -- plain, pure and simple. Given the economy, many consumers are likely to wait and see if retailers will offer even better deals closer to Christmas. Wait and see is likely to be this holiday's mantra.

On Black Friday, I typically shop the shoppers and stores. This year, at anchor stores in several San Diego malls, I asked sales associates about Black Friday 2009 compared to last year. Consistently they said that shopping traffic was up, but spending was down from the same day in 2008. The point: Shoppers are spending more cautiously, looking for better deals and delaying purchases.

3. Mac dealers are offering sweeter deals than is Apple. Apple Store was not the place to shop for Macs this holiday, despite some pretty good deals. Online dealers like MacConnection or MacMall offered better pricing. Some of those discounts continue, typically using rebates. For example, Apple discounted MacBook Pros by $101 for Black Friday. MacConnection's price for the higher-end 13-inch MacBook Pro: $70 less than Apple, with $130 mail-in rebate, putting the price at $1,299, or $200 off typically selling price. Most buyers would pay tax on a Mac purchased from Apple, but not to online Mac dealers, which typically offer free, faster shipping during the holidays.

Sales shifting to dealers still means Macs sold, which is good for Apple even if its online and brick-and-mortar store sales don't zing this holiday. The question to ask: Where are the rebates coming from? Is Apple subsidizing them? That's a question I'll seek to answer as the holiday season proceeds. Apple subsidies would be a tell, suggesting slower overall Mac sales.

4. Windows 7 is likely pulling away some would-be Mac switchers. Mac has finally got some real Windows competition. More importantly, Microsoft and its PC partners are aggressively marketing Windows 7 computers. Marketing matters, just look at Apple's persistent iPhone and Mac TV commercials. Windows 7 is the brand new thing, and it will be available on PCs selling for much less than Macs.

In this economy, low-cost Windows 7 PCs will be good enough for many people. It doesn't hurt that Windows is familiar to most computer shoppers. Then there is the netbook phenomenon. Gartner asserts that Windows 7 will have negligible effect on 2009 PC sales, based in part on holiday forecasts. I'm not convinced, because low-cost netbooks running Windows 7 Starter or Home Premium will be a new thing to many shoppers -- and for ridiculously attractive prices compared to Macs. Then there are perceived benefits around size and portability.

So there remains question: What do you think? Will it be sales as usual for Apple this holiday or sales decline? Please answer in comments; please offer your reasons for Black Friday's apparent Mac sales decline.

Windows desktops and notebooks reach near price-performance parity for Holiday 2009

Joe Wilcox — Tue, 01 Dec 2009 00:01:00 -0500

By Joe Wilcox, Betanews

Historically, Windows portables sold for considerably more than desktops, while delivering less performance or features. This holiday season, prices will be closer than ever -- and, aside from netbooks, there will be little significant difference in performance for price. The question: If prices are about the same, who wouldn't buy a notebook for portability over a desktop? Further: At what point should desktops go the way of the dodo?

At U.S. retail in October, the average selling price for a Windows portable PC was $519, just $28 more than desktops, according to NPD. A year earlier, the portable ASP was $659 and $556 for desktops. Windows desktop and portable ASPs could grow even closer, as super low-cost netbooks continue sales gains. Go back a few years and the gulf between desktops and portables is greater -- as is the ASP. According to Merrill Lynch, in 2006, the portable ASP was $1,160 and $775 for desktops (high Mac ASPs inflate these numbers, which are for the whole PC market not just Windows).

Comparing Cyber Monday Deals

The sales battle between Windows desktops and notebooks can be seen in so-called Cyber Monday deals offered by the same PC manufacturers -- for example, two Dell systems compared at their default configurations and prices. The notebook is the Inspiron 15, which lists for $549 but Dell discounted to $449: 15.6-inch glossy display with 1366 x 768 resolution, Intel Pentium 4300 dual-core processor (2.1GHz with 1MB cache), 800MHz front-side bus, integrated Intel Graphics Media Accelerator X4500HD, 4GB DDR2 memory, 250GB SATA hard drive (5400 rpm), 8X dual-layer DVD burner, 802.11g wireless and Windows 7 Home Premium 64-bit.

The Dell desktop is the Inspiron 546 MT, which lists for $697 but Dell discounted to $499: Dell IN1910N 18.5-inch external monitor with 1366 x 768 resolution, AMD Athlon II X2 215 processor (2.7GHz with 1MB cache), 800MHz front-side bus, integrated ATI Radeon HD3200 graphics, 4GB DDR2 memory, 500GB SATA hard drive (7200 rpm), 16X dual-layer DVD burner, 10/100 networking and Windows 7 Home Premium 64-bit.

For price, the Inspiron 15 is slightly better and for performance the 546 MT is slightly better. Yes, the desktop comes with a larger display, but it's VGA (not digital) and has the same screen resolution as the notebook (Trust me, most people shouldn't want an 18.5-inch monitor with such low resolution and VGA only). Graphics accelerators are comparable as are front-side bus and system memory between the computers. The processor is faster on the desktop and the hard drive is larger. Are these big differentiators? Not at this price point, I say.

Another comparison: HP desktop and notebook offered during Best Buy's two-day Cyber Monday sale. The notebook is the HP Pavilion dv4-1514dx, discounted by $100 to $499.99: 14.1-inch glossy display with 1280 x 800 resolution, Intel Pentium 4300 dual-core processor (2.1GHz with 1MB cache), 800MHz front-side bus, integrated Intel Graphics Media Accelerator X4500M, 4GB DDR3 memory, 250GB SATA hard drive (7200 rpm), dual-layer DVD burner, WebCam, 802.11g wireless and Windows 7 Home Premium 64-bit.

The desktop is the HP Pavilion s5220y slimline PC, which Best Buy offered for $479.99 non-discounted and with no external monitor: Intel Pentium E5300 dual-core processor (2.6GHz with 2MB cache), 800MHz front-side bus, integrated Intel Graphics Media Accelerator 3100, 4GB DDR2 memory, 640GB SATA drive (7200 rpm), 12X dual-layer DVD burner, 10/100 networking and Windows 7 Home Premium 64-bit.

Again, these two computers are fairly comparable, depending on which features matter more to the buyer. Graphics accelerators and memory are close enough, although faster for the notebook. The desktop has faster processor and much larger hard drive, while the laptop has 14.1-inch display, WebCam and HDMI port.

The point: At the prices where most U.S. consumers will shop for a Windows desktop or laptop, price is no longer major differentiator or inhibitor. As prices close together, holiday shoppers will choose more based on function, such as portability versus larger display.

Similarities at Higher Prices

Some Betanews readers will ask what about computers selling for more, which is a good question. I wouldn't buy any of these four systems, nor would I recommend them. Low as the prices seem to be, the value for buck is marginal at best. All four Windows PCs come with underpowered graphics accelerators for today's demanding digital media content creation or consumption needs. Nor am I swooning with excitement about the AMD or Intel processors. Considering that most shoppers will have at least one computer at home, they should reasonably expect to get something better for their bucks spent. So, I will do another desktop-notebook comparison at higher selling prices.

SonyStyle store raises features and price into the $800 range. The Sony notebook is the VAIO VPCCW13FX/R, which is sold non-discounted for $799.99: 14-inch LED glossy display with 1366 x 768 resolution, Intel Core 2 Duo T6600 processor (2.2GHz with 2MB cache), 800MHz front-side bus, 256MB dedicated nVidia GeForce G210M graphics, 4GB DDR3 memory, 320GB SATA hard drive (5400 rpm), dual-layer DVD burner, 802.11n wireless, Bluetooth and Windows 7 Home Premium 64-bit.

The Sony desktop is the VAIO VGCJS410F/S all-in-one PC, which is listed as backordered and non-discounted for $849.99: Built-in 20.1-inch monitor with 1680 x 1050 resolution, Intel Pentium E5400 processor (2.7GHz with 2MB cache), 800MHz front-side bus, Intel Graphics Media Accelerator X4500HD, 4GB DDR2 memory, 320GB SATA hard drive (7400 rpm), dual-layer DVD burner, WebCam, 802.11n wireless, 10/100/1000 networking and Windows 7 Home Premium 64-bit.

Once again, the systems are fairly comparable, depending on which features matter more to the buyer. The processors should deliver reasonably similar performance because of differences beyond clock speed. The notebook has better graphics accelerator and faster memory. The desktop packs a much larger and higher resolution display and faster hard drive.

Not long ago, Windows desktops packed more features and performance for much lower selling price than notebooks. But as prices have fallen and closed together, so have the features and performance gaps diminished. No doubt, some Betanews readers will write in comments about quad-core systems that cost a little more than portables packing less performance or features. I will concede that you can find them. The point here is what the average -- not necessarily the most sophisticated -- computer shoppers will see at retail.

All six of these computers share one feature in common: Windows 7 Home Premium 64-bit. There is no differentiation in operating system. During Holiday 2008, Windows Vista 64-bit differentiated higher-cost portables from cheaper laptops. This year, 64-bit Windows is standard across most price points.

I have to ask: What's your dream desktop, laptop or netbook this holiday? Please answer in comments.

Is Microsoft Store just a cheap Apple Store rip-off?

Joe Wilcox — Sat, 28 Nov 2009 16:14:10 -0500

By Joe Wilcox, Betanews

Yesterday, Black Friday 2009, I drove 70 miles north from San Diego to Mission Viejo, Calif. My goal: To answer that question. In October, Microsoft opened two retail outlets, in Arizona and California, that do remind of Apple Store.

Tech bloggers, particularly those in the Mac camp, have repeatedly slammed Microsoft for imitating Apple and doing so badly. But as the saying goes, imitation is the best form of flattery -- and imitation is quite common in retail.

"It is not like there are infinite ways of doing retail," Stephen Baker, NPD's vice president of retail analysis, recently told me. "There are prescribed best practices; everybody copies everybody else if something works."

Geekdom seems obsessed with Apple and Microsoft copying each others' products or strategies, with retail stores being but the most recent example. In a November 3rd Betanews comment, reader Viking369 asked: "With more people on the web and tuned into the 'blogosphere,' is the perception of Microsoft copying Apple in terms of stores as bad for the brand as the presence of the stores is good? Does anyone actually know or care outside the geek world?"

My answer to the first question: The stores' presence is more important. To the second question: Probably not. My 15 year-old daughter accompanied me to The Shops at Mission Viejo, where the second Microsoft Store is located. Upon seeing Microsoft Store she immediately observed that it looks like an Apple Store. But she quickly added that Microsoft "could do things to improve" on the store concept. Those improvements are crucial to Microsoft reviving its brand.

Microsoft Store banner prominently hangs in The Shops at Mission Viejo

Looking Inside Microsoft Store

Microsoft's Mission Viejo store is ideally located, and the company has fully capitalized on the advantage. Microsoft Store overlooks the mall's open-air pavilion, diagonally across from the food court, on the upper level. The store is easily visible from either of the mall's two levels. A large Microsoft Store banner rises above the large open space. Microsoft marketing placards adorn the second-level rails encircling the open-air area looking down on the lower level. Visibility is important in retail, and Microsoft Store has got plenty of it.

Like Apple Store, Microsoft's retail shop front is all glass (or perhaps plexiglass) that opens onto low, wooden tables displaying products. The floors appear to be wooden (even if they might not be). The layout is very reminiscent of Apple Store, with products displayed along both walls, as well as tables throughout. Along the left-side back wall there is software; games and gear can be found along the opposite back wall.

Yes, Microsoft Store bears striking resemblance to the Apple Store on same level

One of Microsoft Store's most distinctive features are video panels that go down the side walls to the back. In an Apple Store, colorful marketing material adorn the walls above products displayed below. By comparison, the video panels allow Microsoft to frequently change the content along the walls.

Down the store's center, towards the back is Microsoft's version of Apple's Genius Bar. There, Microsoft Gurus assist customers with technical service problems. Behind the Guru Bar is another Apple Store knock-off, a theater where Microsoft offers training and other tech activities.

Video panels behind products change marketing messaging throughout the day

In perhaps a sign of how much alike the Apple and Microsoft stores might look to regular consumers, I observed a woman with a MacBook at the Guru Bar early yesterday afternoon. I thought maybe she sought assistance with Macintosh Office. But looking over her shoulder, that's most certainly not what I saw on the Mac's Finder.

Microsoft Store was high energy on Black Friday. There is simply no better way to describe the chatter and excitement. Microsoft Store was extremely busy, like I've seen Apple Stores located in California, Maryland or Virginia. Microsoft Store employees kept the energy high by clapping for every customer buying a computer. The energy is as high outside the store as inside, where Microsoft has a Xbox 360 gaming display area. During my visit, I saw Microsoft Store employees and customers singing Karaoke together.

Microsoft Guru Bar is so similar to Apple Genius Bar, customer brings in Mac for service

By the way, I didn't count number of Microsoft Store employees, but there sure were lots of them. Even with the store packed with customers, it felt like a 1:1 ratio between staff and shoppers. (By the way, the photos intentionally don't show many customers, for permission-use reasons.)

Geek versus Neat

Employees at Apple and Microsoft stores wear colored T-Shirts. There is something oh-so original Star Trek about Microsoft Store employees' red, yellow, blue and green T-Shirts. They subliminally add to store staffs' geek mystique. Surely, Microsoft has some unwritten policy that employees must look geek, because every employee at Microsoft Store Mission Viejo surely does. Better said: The staff looks more like normal people, just like the majority of customers. For me, the geek mystique instilled subliminal confidence every employee could answer any Windows PC question. The look is so different from employees working the Apple Store on the same level as Microsoft Store.

Microsoft Store employees clap whenever a customer purchases a Windows PC

Microsoft is smart to put its stores in malls where Apple has retail shops, too. Microsoft has announced plans to do this, although there is no Apple Store at the Arizona mall -- Scottsdale Fashion Square. Mall colocation creates a sense of competition that is more personal. Employees at one store compete with others several hundred feet away -- if that far. They're competing not just for sales but for customers who will chose one of two different digital lifestyles. The Mac-Windows rivalry coalesces around people working the actual stores, not two ambiguous companies. I visited the Apple Store located near anchor store Nordstrom, for comparison. The energy was much higher at Microsoft Store.

Energy is one thing. Perception is another. Copycat accusations from the geek elite and reach of the social Web magnifies everything that Microsoft does. Example: Microsoft Store line dancing video that appeared online about two weeks ago. Baker and I discussed the video, which led to sneers and jeers from some tech bloggers, particularly in the Mac camp. I pointed out that near the end of the video, customers can be seen dancing with Microsoft Store employees. "That's nice! That's a positive thing that people are connecting with them in the store," Baker said.

Like Apple Store, Microsoft Store has a theater for training and other tech activities

As I've repeatedly written: Perception is everything in business, and Microsoft struggles to manage perception -- something I got a whiff of yesterday. I told one Microsoft Store employee that all the staff looked to me like real geeks, which set the discussion off on an unexpected tangent. "I just want to feel good about Microsoft," the staffer expressed. The employee clearly understood the mystique following Apple, while among many vocal techies there is disdain for Microsoft and continued copycat accusations. The staffer didn't need say how difficult feeling good about working for Microsoft could be when videos posted to YouTube make the company and its retail store employees look like goofballs.

"They can't get a break," Baker acknowledged. "Everybody turns it into goofy things," Baker said about the line dancing or Windows 7 House Party. I said it for him: They are not.

Microsoft Store employees are real geeks

As for Microsoft Store, yes, it is an Apple Store imitation. But is it a bad imitation? No. Is imitation a bad thing? No. It's what retailers do. I enjoyed my visit to Microsoft Store. I hope Microsoft opens plenty more stores and nearby to Apple shops. The competition will make computer shopping better for everyone.

[Photo Credits: Joe Wilcox]

For additional pics, please visit my "Black Friday at Microsoft Store" Flickr gallery

Nearly half the money spent at US retail on desktop PCs goes to Apple

Joe Wilcox — Wed, 25 Nov 2009 14:24:06 -0500

By Joe Wilcox, Betanews

In October, Mac US retail desktop computer revenue share was 47.71, percent up from 33.44 percent a year earlier, according to NPD. It's a stunning number, given just how many Windows PC companies combined command so much more market share, while competing for the same revenue share.

NPD measures in-store and online sales to compile the numbers. Contrary to blogs or news sites that will link to this post, NPD did not issue a report with this data. I asked for it. That's what reporters do -- ask questions.

The larger questions: Can Apple sustain such high desktop dollar share? Does Apple benefit long-term from the trend? "No" is likely answer to both questions.

Stephen Baker, NPD's vice president of industry analysis, attributes some of Apple's October gains to the release of fast, new iMacs during the same month that Windows PC sales declined ahead of Windows 7's October 22nd launch. "You only really had 10 days to catch up some 20 days of lost [Windows PC] sales," Baker said.

Additionally there is the recession, which force hit following the late-September 2008 stock market crash. "You're comparing the [iMac] launch month this year to the month last year when people stopped going into stores to buy things," Baker said. "To some extent it's a little bit apples and oranges."

He emphasized: "While those are great numbers, that's probably not sustainable." Perhaps, but even a decline to 40 percent revenue share would put Apple head and torso above every single competitor selling Windows PCs. It's worth noting that Mac desktop revenue share had already risen to 44.91 percent in April 2009, although Baker attributed some of that "pop" to the "residual effects" of new iMac upgrades a month earlier.

One factor helping Apple is average selling price. The Mac maker has largely chosen not to compete with Windows PC manufacturers below $1,000. While price wars continue at the low end among Windows PC manufacturers, Apple's entry-level iMac starts at $1,199. True, Apple offers the Mac mini for $599 or $799, but the ASP is considerably higher than comparably priced Windows PCs. Low-cost Windows PCs typically come with monitor, keyboard and mouse, which are all extra-cost items for Mac mini unless the buyer uses existing gear.

In October, the Mac desktop ASP was $1,338, down from $1,390 in April and $1,581 in October 2008, according to NPD. By comparison, Windows desktop PC ASP was $491, or nearly $900 less than the Mac desktop. Generally, Apple also captures more revenue share on much smaller sales. For example, according to Apple SEC filings, worldwide, the company shipped 3.05 million Macs -- only 787,000 of them desktops -- in third calendar quarter. By comparison, HP shipped 16.1 million PCs and Acer 12.5 million, according to Gartner.

Where Apple's sales are stronger, in notebooks, it's revenue share is by no means as high -- yet still an enviable percentage for any single computer manufacturer. Mac notebook US retail revenue share was 33.66 percent in October, up from 30.07 percent in April but down from 38.13 percent in October 2008. In the year-ago month, Apple released its first unibody MacBooks and MacBook Pros, which lifted revenue share. The change in revenue share from October to April to October bookends the new Mac laptop launches and corroborates Baker's assertion that Apple revenue share will recede in coming months.

"Apple gets a huge bump out of new products that no one else gets," he said. "Those [share increases] haven't tended to be sustainable in the long term."

Maybe, but one third of sales going to one company is an amazing feat -- and it's where the market is growing fastest: Portable computers. The Mac laptop ASP also is much higher than Windows notebooks: respectively, $1,410 to $519 in October, according to NPD. Apple sells fewer units, but commands higher margins on every one than Windows PC manufacturers.

The question ahead: What about Windows 7 and the holidays? On Monday, Gartner predicted that Windows 7 wouldn't lift PC sales in 2009. That's a question to answer in January when the sales figures are final. But based on Apple's ability to defy the recession's downward pull on computer sales and just how consistently busy are the company's retail stores, I'll predict that Mac overall US retail revenue share will stay well above one-third and more than 40 percent for desktops. Surely any Windows PC competitor would want make so much on so few computers sold, comparatively.

Can you come up with a better brand for AOL than 'Aol.'?

Joe Wilcox — Mon, 23 Nov 2009 19:11:01 -0500

By Joe Wilcox, Betanews

The new, much maligned "Aol." logo has upped its failworthiness. Newest buzz: A 27-year-old with no marketing expertise was the driving force behind AOL becoming Aol.; that has many people wondering what the company was thinking.

Age isn't so much concern as lack of marketing expertise. What was AOL thinking, particularly with the rebranding being so important to a company spinoff planned for early December?

I think Betanews readers could do at least as well, and probably a lot better. So I ask: What would you have done with the AOL brand? Please respond in comments. Be graphic. Be creative. Be critical, if like me you think Aol. spoken aloud sounds like "A-hole."

[Update: Betanews reader Jason Syth submitted the logo above. I'll add others as they come in from other readers.]

AOL's decision to rebrand as Aol. takes a bad brand and makes it worse

Joe Wilcox — Mon, 23 Nov 2009 18:06:25 -0500

By Joe Wilcox, Betanews

Not since AT&T gobbled up Cingular and rebranded as at&t with that ugly Death Star-like logo has a company erred so far from sensibility. The new AOL brand, Aol., is coming soon to frighten you. AOL's attempt to be hip is anything but. Not that AOL, distributor of a billion CD coasters, was ever cool. The service may have been the biggest online community of the 1990s, but it was never hip. Nor will the lame rebranding make it so.

AOL previewed the new brand identity overnight ahead of its unveiling on December 10th, for the company's spin-off from Time Warner. By measure of big tech sites and Twitter, the rebranding is a total fail before even being officially launched.

Giga OM's Om Malik opined: "The new logo fails to capture what is going to be a smaller, nimbler AOL, one that is represented by a collection of smaller, iconic brands such as Engadget and Joystiq. AOL should ask for its money back!"

NBC Washington's Jim Iovino blogged: "Give those image consultants a year's worth of dial-up and a few thousand AOL CDs packed away in the Dulles campus boiler room. And yes, they're officially calling the logo 'aol-dot'. Dot-what you ask? Good question. We'd suggest 'dot-lame,' but whatever."

Designer Daily blogger Mirko Humbert likes the basic lower-case logo and period, but still gives it a fail: "Unfortunately, there are many chances that you won't even notice the nice changes to the logo since it also features some horrible background images."

The logo was a big topic on Twitter today, too. Some random tweets:

Web designer Will Ayers: "AOL's new branding + identity is nothing short of a complete disaster. Wow. Speechless."

FASTforward blogger Paula Thornton: "And in lower case it is now subjected to pronunciation. How would YOU pronounce aol? : )"

Business Insider writer Alaska Miller: "Iterate, get trolled, re-iterate. Ad nauseum. Maybe now AOL can finally compete. Good on them. TS on the shareholders, though."

Web developer Bruce Clark: "AOL, the world is crying for you. How in the world did you ever seriously consider this...much less make it real?"

Marketer Doug Chavez: "Does anyone else think the new Aol logo looks like it was designed by a 5th grader?"

The branding announcement comes at a strange juxtaposition. AOL execs are on the road trying to woo investors to next month's public offering, while also looking to lop 2,500 heads from the 6,000 payroll. You've got to wonder who would want to leave a company right before a spinoff. I lived in Washington, D.C., when an earlier incarnation of AOL went public and turned even the lowliest of employees into instant millionaires. Surely this past isn't lost on the AOLers looking at the big exit sign.

AOL is giving employees some untoward exit options. Last week, All Things Digital's Kara Swisher blogged:

AOL is offering those who 'volunteer' to leave the company now a departure package that ranges from three to nine months of pay, compared to one to four months for employees laid off in the first quarter of next year. It's a depressing rock-and-a-hard-place choice. An AOL spokesperson confirmed the offer.

Say, AOLers, if the new brand is any indication of things to come, maybe you should take the money now and run. But use that rebranding as bargaining chip for 12 months pay with benefits and a bunch of cheap AOL shares. You can look for reemployment at leisure instead of going down with the good ship Aol., which can't be all that good for you. How cruel is it to take voluntary departures until December 4th, only to trot out the big public offering days later? The point: AOL's execution problem is much bigger than just the rebranding.

Wait. Now when is that public offering again? Officially, it's December 9th. But according to Silicon Alley Insider's Nicholas Carlson, AOL stock could start trading as early as tomorrow under "when issued" trading rules. Sure enough, there's an 8-K filing dated November 20th explaining AOL's plans.

Can you come up with a better brand for AOL than Aol.?

Uh-oh, netbooks -- not Windows 7 -- will lift 2009 PC sales

Joe Wilcox — Mon, 23 Nov 2009 14:01:47 -0500

By Joe Wilcox, Betanews

Gartner is just full of bad news that will suck Windows PC manufacturers' thanks out of American Thanksgiving -- and Christmas along with it. Ho Ho Ho Ba Humbug. Today, the analyst firm predicted that based on fourth-quarter PC shipment estimates, for 2009, the market would grow -- but not because of Windows 7 -- and with deep declines in average selling prices. Combined, the latter two predictions spell lower profits for Windows PC OEMs and potentially overshipment of PCs for holiday 2009.

"We just don't see consumers buying new PCs solely because of Windows 7," Gartner research director George Shiffler said in a statement. "We are expecting a modest bump in fourth-quarter consumer demand as vendors promote new Windows 7-based PCs, but the attraction will be the new PCs, not Windows 7."

Microsoft and many of its PC partners were looking for Windows 7 to bring a big sales uplift during the holidays. Microsoft already got its big bang, recording in third quarter the highest quarterly sales ever for any Windows version. Strong OEM Windows sales make sense as PC manufacturers stocked store shelves for holiday sales.

Gartner predicts that globally 298.9 million PCs will ship this year, for a year-over-year increase of 2.8 percent. For 2010, Gartner predicts PC shipments will grow 12.6 percent year over year to 336.6 million units. But Gartner warned that 2.8 percent growth is by no means sign of a recovery, because of the weak year-over-year comparison. Holiday 2008 PC shipments stalled, as manufacturers pulled back inventory following the late-September stock market crash.

More disturbing, in what looks to be a long-term trend, rapidly falling average selling prices are pulling down the total value of the PC market. Gartner predicts a 10.7 percent year-over-year decline in 2009 to $217 billion.

"We don't see PC ASPs rising any time soon," Shiffler said in the statement. "As a result, growth in the market value of shipments will significantly lag shipment growth next year and beyond."

As I've complained all year, netbooks are a menace. Netbooks, what Gartner calls mini-noteboks, pull down ASPs and cannibalize notebook and desktop margins. According to NPD, US retail Windows portable PC ASPs fell to $519 in October from $558 in April and $659 in October 2008. Without netbooks, declines were less severe. By comparison, the Mac portable ASP was $1,410 in October.

Gartner predicts that of the 162 million portable PCs shipping in 2009, 29 million will be netbooks. For 2010: 41 million netbooks out of 196.4 million portable PCs shipped. Next year's netbook shipment gains will come with slower growth, but not enough to lift already sunken ASPs.

"Mobile PC shipments continued to get a significant boost from mini-notebooks," Shiffler explained, adding that "Mini-notebooks are facing increased competition from other low-cost mobile PCs, as well as alternative mobile devices. They are rapidly finding their level in the market, and we expect their growth to noticeably slow as early as next year."

But for holiday 2009, Windows PC manufacturers are looking at netbooks' continued ASP downward pull, even while Windows 7 looks to give only marginal lift to PC sales, if any at all. Meanwhile, Mac US retail laptop ASP was nearly $900 higher than Windows portables in October. Apple will be selling at top dollar and capturing higher margins, following another record quarter of Mac shipments. In third calendar quarter, Mac shipments increased 17 percent year over year to 3.05 million units.

Netbooks are only a part of the problem facing manufacturers and sellers of Windows PCs. The question: Did OEMs and retailers overstock? If the answer is yes -- as Asian component orders and high third quarter Windows 7 license shipments suggest -- retailers will have to heavily discount PCs to clear store shelves during the holidays. All while Mac pricing is expected to remain much higher.

The good news for consumers and retailers, according to Stephen Baker, NPD's vice president of industry analysis: "We anticipate very strong unit volume growth in the core tech categories like flat panels and notebook PCs." The bad news for retailers and PC manufacturers but potentially good for holiday bargain shoppers: "PC Pricing will be very difficult to maintain, and we expect to see aggressive pricing all through the holiday."

No thanks to Windows 7.

10 things about Microsoft's PDC 2009: The good, the bad and the ugly

Joe Wilcox — Fri, 20 Nov 2009 16:00:00 -0500

By Joe Wilcox, Betanews

Microsoft's 2009 developer conference wrapped up yesterday in Los Angeles. Not since PDC 2003 has Microsoft talked so much and said so little. As I listened to the keynotes and have reviewed the sessions, words "series finale" repeatedly popped into my head -- like a TV show coming to its end after a long run. Good or bad for Microsoft, a computing era is ending. Perhaps PDC 2009 demarcates the transition.

PDC 2003 was memorable for demos that wooed but seemed insubstantial. Within weeks after that developer conference, I began telling my clients (I was a senior analyst for JupiterResearch then) to expect Microsoft to delay Windows Longhorn sometime in early 2004. The delay came, followed by several others, as Microsoft dumped features to get Windows Vista out the door -- late -- missing holiday 2006.

PDC 2009 had a quality that reminds me of the event six years earlier. Much of the big new stuff came off a bit airy, and there are gapping pot holes in the product strategy -- mobile being the biggest -- that Microsoft executives tried to walk around or jump over. Ignoring these holes doesn't make them go away, unless perhaps sticking one's head in them like an ostrich might.

Windows is no longer the satellite around which trendy development projects revolve. Windows gravity remains strong in the enterprise, for which switching costs to competing platforms hold tight the orbit. Increasingly, Web development and the mobile device capture pull developers away from Windows. Microsoft didn't increase enough the gravity to pull them back. For example, Internet Explorer 9 demos were laughable in context of continued and aggressive Apple Safari, Google Chrome and Mozilla Firefox development. Meanwhile, Microsoft had virtually nothing to say about Windows Mobile/Phone.

With that introduction, I've compiled my thoughts about PDC 2009 -- and related announcements this week, such as the Office 2010 public beta -- into a list of 10 things. The things are in no particular order of importance.

1. Two screens aren't enough for a three-screen strategy. The most baffling Microsoft messaging coming out of PDC 2009 was the continued talk about three screens -- mobile device/phone, PC and TV. But Microsoft only really has one of those screens down, the PC. The TV screen is more about Xbox gaming and entertainment, without enough synchronicity yet with the PC.

The mobile phone strategy is a disaster. Microsoft has got no software or service that can effectively compete with Apple, Google, Nokia or Research in Motion mobile operating systems. Windows Mobile is losing licensees to Google's Android, and Apple's App Store/iPhone/iPod touch platform is a black hole sucking in developers.

Actually, it's embarrassing for Microsoft to pitch three screens when the software and strategy around one of those screens stinks so badly. I actually felt sorry for Microsoft executives trying to make the three-screen pitch. I was embarrassed for them.

2. A laptop isn't a bribe, it's an investment. During the PDC Day 2 keynote, Steven Sinofsky, Windows & Windows Live divisional president, told paying attendees they would each receive a free laptop. Microsoft and Acer designed the thin-and-light laptop, with 11.6-inch touchscreen. The other features seemed quite underwhelming,

But underwhelming really was an overwhelming achievement. Microsoft accomplished two important objectives by giving away the laptops:

Every developer attending the conference now has Windows 7 for creating new applications.
The laptop establishes a baseline for which developers should create their new applications.

The latter is important. Many Windows XP and Vista systems can be upgraded to Windows 7, and they won't have the fastest processors, best graphics capabilities or highest screen resolutions of computers shipping now. Then there are all those underpowered netbooks that businesses and consumers are buying. Microsoft set an appropriate baseline for where the market is and where Microsoft wants the market to go -- touchscreens.

3. A big conference should justify attendees' investment of time and money. PDC 2009 didn't offer any big surprises, aside from the the free laptop. Perhaps that's OK, as Betanews' Scott Fulton expressed yesterday:

The big stories here in Los Angeles this week were more evolutionary than revolutionary. That was actually quite all right with attendees I spoke with this week, most of whom are just fine with one less thing to turn their worlds upside down. It's tough enough for many of these good people to hold onto their jobs every week.

Perhaps some other attendees would like to keep their jobs by justifying the time and expense of attending Microsoft's developer conference. Microsoft should have skipped doing a developer conference this year. It's better to saying nothing if you really have nothing to say.

4. A shipping operating system is better than none. Windows 7 is here. It's real, and it's really much better than either Windows XP or Vista. Windows 7 is fun and productivity boosting. During PDC, Microsoft made a pretty good pitch for why Windows 7. Yesterday, during a Webcast, Google made an operating pitch, too -- for Chrome OS. After months of rumors, Google finally explained what to expect from Chrome OS. The news was everywhere yesterday. But for all the buzz, Chrome OS is, at least for today, vaporware. The software release is a year, maybe even more, away.

But the timing of the announcement felt deliberate, like Google had looked into the Microsoft playbook and copied a few strategies. During the 1990s, Microsoft was notorious for announcing big new -- coming someday in the future -- things about the same time competitors released new products. Some of these forthcoming Microsoft products were real vaporware; they never shipped. But whether real products or not, the announcements gave businesses and consumers reason to wait on the competing thing available in the present for the one that sounded so good in the future. Chrome OS is Google's reason to wait on Windows 7. I say that nothing is no reason to wait on something.

5. Being Amazon is no way to launch Azure. During PDC 2008, Microsoft's Web services pitchman, Chief Software Architect Ray Ozzie, gave a rousing pitch for Azure. He convinced that Azure would be a cloud-based operating system developers would write their applications to. The strategy beamed with innovation. A year later, the pitch came across as something much different. Ozzie still talked about a cloud OS, but the deliverables and new services were about databases.

It seemed as if Microsoft had pulled a Windows Longhorn, dumping features and shifting strategies before reaching the destination. Azure, which won't launch until Jan. 1, 2010, now looks less like a cloud OS and more like an up-and-coming Amazon Web Services. Chasing Amazon is not a winning strategy, even with all the leverage Microsoft commands from existing PC desktop and server software.

Like PDC 2003, where Microsoft employees showed lots of Longhorn facade but not much structure behind it, Azure seemed not only less substantial than PDC 2008 but missing pieces even ahead of the launch. What about Windows Live and important services like Windows Mesh for which there was supposed to be synchronicity with Azure?

6. Silverlight can light Microsoft's way to the Web. Scott Guthrie made a compelling pitch for the new features coming in Silverlight 4.0, which is now in beta. The Microsoft corporate vice president showed that at least with this one product, Microsoft is innovating -- and remarkably fast. New features include Adobe AIR-like capabilities, support for microphones and Webcams, standalone Silverlight containers and better HTML support, including HTTP streaming. There is much for developers to like in Silverlight 4.0.

But Microsoft also is acting like the old Microsoft and not the more open one presented during PDC 2008. Some new features are specific to Windows, which potentially fragments Silverlight functionality across different platforms.

7. People don't want to work more, they want to live more. The most baffling Microsoft marketing messaging of the week had to be for Office Mobile. Tagline: "Take work with you?" Exactly what is aspirational about that? Microsoft expects so-called knowledge workers, whose computing habits already mix professional and personal lives, will want to take even more work with them? The tagline is reason not to use Office Mobile. That is unless the marketing goal is to generate fear: It's better to take more work home than to not work at all, given the increasing chances of otherwise being laid off in this economy. Such approach is perhaps motivational, but certainly not aspirational.

8. Real open-source supporters improve Azure's allure. Ozzie has consistently and persistently pitched Microsoft's Web services strategy as being more open. He made his case during PDC 2009 in a surprising -- and I'd say shocking -- way. He brought out two surprising Azure supporters It was a simply brilliant marketing maneuver. The first: WordPress creator Matt Mullenweg came out on the PDC stage to announce that Automattic would begin using Azure in production ahead of the official service launch. From a marketing perspective, it was a stunning announcement, since Automattic uses open-source tools like Apache and MySQL. The message: Azure isn't just about Microsoft products or development tools.

Additionally, Vivek Kundra, the US government's chief information officer, appeared via satellite link. Many news reports have painted Kundra as a Google hosted apps lover. That buzz has raised questions about how much the Obama Administration might embrace Microsoft software or services. Kundra is on record supporting the use of open development tools for government online services. While the Federal CIO mostly spoke about the government's open-development efforts, his appearance at PDC was good for Microsoft by association. Kundra concluded by saying that he looked forward to the "thousands of applications that are going to be created." But he didn't specifically say with Microsoft development tools or services.

9. SharePoint and Windows Live are not social networks. On Monday, Microsoft released Office 2010 beta, ahead of PDC 2009's official opening. Among the announcements with potential developer appeal: Office Social Connector. Microsoft is attempting to make Outlook 2010 the hub for users' social connections. But right now, the major supported product/service is SharePoint 2010. While Microsoft acts like SharePoint is a social network, it most certainly is not. Meanwhile, Microsoft promises Windows Live support for Office Social Connector sometime next year. Third-party services must support a Microsoft proprietary XML schema to appear in Office Social Connector.

10. Digital natives are looking elsewhere. The biggest tech news of the week was about competitors' vaporware -- the aforementioned Chrome OS and Apple's rumored tablet. How outrageously laughable. Apple's rumored tablet is rumored to be delayed. It was all over the InterWebs during PDC! A product that doesn't exist will ship late. Later than what?

The point: Apple and Google are having much more success appealing to geeks and digital natives than is Microsoft. While Microsoft executives talk big iron -- the kind of blathering heard from IBM a generation ago -- Apple and Google offer products or services meaningful to everyday users, such tools for creating or managing content that matters, like photos and videos, rather than static text documents. Just look at the bazillion of iPhone/iPod touch new App Store application stories that post to the Web in any week.

Apple and Google have got the buzz. By comparative perception, Microsoft makes software for aged computing users and IT stiffshirts. Microsoft did little to change perceptions through PDC 2009.