Greg's Bite: The high tech race to mediocrity
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Greg's Bite: The high tech race to mediocrity

By Greg Mills

I just read an article where the author listed both the smart and stupid moves Microsoft made for the year. I was struck by the lack of anything revolutionary coming from the intellectually challenged Redmond campus. The Kinect video game sensor more or less topped the list of recently smart moves made by Ballmer. Even Kinect was purchased technology rather than innovation that came out of the massively funded R&D efforts at Microsoft. Microsoft has entered the "declining to irrelevance" phase of tech company evolution.

Steve Jobs famously declared the PC dead and predicted the mobile OS in tablet form was the future of computing. Many would beg to disagree, but the falling numbers in the PC industry prove him right as rain. HP came close to pulling the plug on PCs due to a declining profit margins that may entirely disappear soon.

I was furious that my daughter's school spend money on new PCs rather than iPads. I told the principal that, had she asked me, I could have done a bit of dumpster diving behind the Apple store and retrieved a bunch of more recent PCs than they were currently using, for free. My daughter laments that the computers at school are "so dumb" compared to our Macs at home.

When the principal told me the PC platform choice was due to the computer teacher not being "familiar" with anything but PCs, I sarcastically suggested they ought to fire him and get someone who could teach something useful to our kids. My daughter will soon inherit my iPad 1 when I buy an iPad 3, and I have already told her to take it to school and use it there. Her teacher has already asked her to please dumb down some of her graphics projects assignments she did on the iMac, as "it was not fair to the other children for her to use a Mac when they were stuck with PCs." Hum, explain that comment away Microsoft.

Kodak, as another example of the tech business life cycle, might not be a living noun much longer. Who would have thought 10 years ago that the main brand name associated with photography would have been allowed to fade to black? Two or three years ago Blockbuster was the big gun in video rental with massive video rental stores on street corners around the country. Sears, the biggest retail store chain in the history of the US, is apparently in a rapid market decline that likely will see it go belly up. Even NetFlix recently shot itself in the foot. Apple could screw up, but that seems remote since they are clearly the industry leader and seem to be making all the right moves.

Companies go through distinct stages of development and can survive or fail during technologically challenging times brought on by innovation that didn't happen in their house. Radical competition in the high tech industry tends to be fostered by start-ups, Apple currently being the only major exception. Even the eternal "foot in the mouth," court jester of high tech writers John C. Dvorak, is going long on Apple stock and admitted that Apple is doing all the right things.

Microsoft has been a follower for so long that the company culture has developed there where a "just acceptable" level of product performance is okay. Unfortunately, the culture of innovation is hard to learn and elusive to teach. Entrenched managers can encourage out-of-the-box thinking or kill it outright, without a second thought.

Case in point: the Windows Mobile OS. While most reviewers agree that the very late-to-the-party, Windows Mobile OS is okay, no one has been able to find any killer features in it that compel consumers to demand a Windows smartphone. Apple long ago discovered the killer feature that drives sales had to be easily understood and heavily advertised to push viral sales. Siri, for example, isn't the first voice activation software, but it sure is the best. No article I have ever read that was written by someone outside of the Microsoft sphere of employment (MSNBC for example) says of Windows Mobile "that it wasn't the first, but sure is the best." That simply isn't true and everyone knows it, including Microsoft.

One of the amazing headlines over the last year was also tremendously revealing was, "Microsoft pays Nokia a billion dollars to ditch the Android OS in favor of Windows Mobile." Ballmer knew Nokia wouldn't choose to go with his new Mobile OS without a lot of "encouragement" or outright bribery. Actually, many at Nokia were furious and think their CEO, who came to them from Microsoft, made a mistake that will take Nokia down. That may well be true, as the long awaited Nokia smartphones that run Windows Mobile have not been selling worth a hoot.

Apple is poised to continue to eat Nokia and RIM's lunch as their smartphone market share continues to slide towards Apple and Android. While Microsoft recently announced that they are up to 50,000 apps for Windows Mobile, one has to wonder how much money developers are getting from their efforts. As I have blogged before, the infrastructure of a valid mobile OS is complicated and has critical elements that are required for the OS to survive. The HP Palm platform crashed and burned for specific reasons that might also doom Windows Mobile.

Hardware is important but at the end of the day, any of the big electronics companies can create acceptable handsets. The OS has to be solid, but even a solid OS isn't a slam dunk foundation for success, as there has to be a valid assortment of apps and a developer community that is making money creating content for the platform. How many platforms is there room for? Microsoft hopes the answer is three. I am not so sure it isn't two.

What good is great hardware without useful apps? Ask RIM that question. The reason the RIM PlayBook crashed was not for lack of good hardware, but for lack of useful features we have been taught to expect by Apple's successful iPhone/iPad platform. Who needs a tablet that can't even do email? How about a tablet that can only hook up to the Internet by tethering with just one brand of smartphone? Even die-hard BlackBerry users revolted, and the PlayBook disaster may actually take RIM down.

Rumblings in the TV manufacturing business segment foretell a shakeout there that may see Sony tumble from being the defacto industry leader to somewhere much lower in the TV market share index. Sony has tended to push quality and features as the reason to pay more for the virtual commodity flat screen TV. Newcomers like Visio have captured a significant share of what used to be Sony's chunk of the market. Sony failed to make the transition from the cathode ray "Trintron" to flat screen TVs that were competitive price wise. Even today, cruise a Wal-mart electronics department. While Sony is still selling TVs, the price is as much as 50% more that volume leaders such as Visio. Can Apple break into the declining TV market? It will take something so revolutionary, I can't think what it might be. Apple, I want to be amazed.

Amazon and Microsoft both claim to have an iPad killer in the wings ready to steal the bacon from Apple this spring. The problem for them is that the iPad 1 and 2 they are still trying hard to match will soon be eclipsed by iPad 3 and send them back to the drawing board. While the $200 Amazon tablet is selling, compared to the iPad, it is crappy and perhaps not worth less than half what an iPad is worth. The Android patent infringement situation is about to blow up in Google's face. 2012t will be an interesting year with a lot to write about.

That is Greg's Bite for today.


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