Daniel Eran Dilger
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CES: Fear and Loathing in Las Vegas

Daniel Eran Dilger
The 2008 Consumer Electronics Show wrapped up Las Vegas after a week of conspicuously non-noteworthy events. The highlight of the show was Bill Gates’ formal announcement of retirement from Microsoft, along with marginally larger TVs and boxes that look suspiciously like the Apple TV that everyone loves to hate on. Along with Gates, CES appears ready to itself comfortably retire into inconsequential clouds of vapor.

The event started back in 1967. Throughout the 70s, it served as the launching pad for such consumer electronics milestones as the VCR in 1970, Laserdisc in 1974, and Atari’s Pong in 1975. From 1978 to 1995, the show was big enough to fill two events in two cities, one in the winter and a second in the summer. However, since in 1995 CES has scaled back to become an annual January event held in Las Vegas.

CES recently gobbled up the remains of the COMDEX show after the US decided it didn’t have the attention span for multiple trade show events where so little ever actually happened. The arrival of the web also helped reduce the need for such big, general purpose trade shows. In addition to COMDEX, the E3 video game trade show similarly whittled itself down from a big event into a small, invitation-only conference this year.

Showing Off the Emperor’s New Clothes.
Both CES and COMDEX frequently served as podiums for Bill Gates and Microsoft, making the fall of all four into increasing irrelevance an interesting turn of events. Why the consumer electronics world ever thought it made any sense to pause and listen to Gates is hard to understand. Microsoft has never ever delivered anything interesting in the consumer electronics space, and has lost billions of dollars in every attempt to do so outside of its rebranding of Logitech mice and keyboards.

Gates’ consistent inability to predict the future of consumer electronics or to even deliver his pet visions using the massive market power and wealth at his disposal made him the perfect showman for consumer electronics events in the pathetic throes of decline. In 2001, two years before COMDEX died, Gates stood up to announce:

“The Tablet takes cutting-edge PC technology and makes it available wherever you want it, which is why I’m already using a Tablet as my everyday computer. It’s a PC that is virtually without limits — and within five years I predict it will be the most popular form of PC sold in America.”

Tablets are still very dead today in 2008. At CES, Gates similarly trotted out silly ideas for the press to celebrate, the majority of which never even materialized as products. Of the few that were sold, none became noteworthy successes. Microsoft repeatedly announced applications of Windows CE that went nowhere, along with SPOT watches, Mira LCD terminals, and various other ideas that drew polite applause before fading off into obscurity.

Innovation: Apple at Macworld vs Microsoft at CES

Innovation: Apple at Macworld vs Microsoft at CES

The Failure We Don’t Speak Of.
While it’s not hard to deliver a product that fails to exceed expectations, Microsoft has done nothing but throw out monstrous failures year in and out, an effort that seems statistically improbable considering the engineering and marketing resources available to the company. For reasons that are not obvious, this reality has been nearly taboo to point out in print, particularly among tech critics whose job it is to castigate failure and celebrate innovation.

Microsoft’s fans like to think of the 2001 Xbox and 2005 Xbox 360 as successful products, but both have only lost the company billions of dollars. Over the last seven years, Microsoft has shipped 24 million Xbox units and 17 million 360 consoles to stores, but has yet to make any profits. By way of comparison, Apple in its “beleagured” decade of the 90s sold over 30 million Macintosh systems, generating far more revenue and making a significant operational profit throughout. In the last seven years, Apple has sold around 30 million more Macs, earning record profits rather than losing billions per year.

Why was Apple “beleaguered” for making money on Macs in a competitive market in the 90s, while the Xbox is considered a “success” for burning up around eight times as much cash in its best year of deploying a disposable platform than Apple lost in its worst year? The main difference is that Apple didn’t pay wags to spin stories that were not a realistic portrayal of reality. In terms of devices under $500, Apple has sold a 120 million iPods in the last seven years.

Myth 7: The Xbox Success Myth
Ten Myths of the Apple TV: Xbox and Hardware

Macworld Expo vs CES.
While Microsoft led CES into irrelevance with years of vaporware announcements, Apple has turned Macworld into a hotly anticipated event. Last year, both were held at the same time, which was particularly embarrassing for CES because the iPhone froze the remaining life out of the boring announcements of slightly larger TVs and Microsoft’s snoozy Windows Home Server.

Over the last year, Microsoft failed to find much interest at all for its 2007 CES products, including Windows Vista, Windows Home Server, the Zune, and the remains of the Windows UMPC while Apple stole the headlines month after month with its new mobile, revised iMac, and updated fleet of iPods.

Microsoft tried valiantly to take credit for the touch interface Apple delivered in the iPhone, both with the Surface bathtub vaporware it was unable to ship as planned, and in nebulous announcements that oddly insisted that Microsoft would invent the technologies of the iPhone for use in Windows Seven and Windows Mobile 7 several years from now. The problem with Microsoft’s “wait, we’ll copy it too!” attempts is that nobody believes the company can anymore.

Windows Vista was supposed to catch the Windows PC up to the level of Apple’s Mac OS X Tiger, but fell dramatically short in performance, usability, simplicity, and attractiveness. PlaysForSure and the Zune were supposed to catch up with Apple’s iPod, too; instead, Microsoft apologists at CNET and Wired were forced to favorably compare Microsoft’s 2007 music players against Apple’s classic iPod model, largely unchanged from 2005.

Outside of the Microsoft groveling tech press, reality more closely matches what the market has already decided. Next to Apple’s current models, the Zune just looks silly in terms of usability, battery life, software sophistication, and hardware design.

Why Microsoft’s Zune is Still Failing

Why Microsoft’s Zune is Still Failing
Winter 2007 Buyer’s Guide: Microsoft Zune 8 vs iPod Nano

It’s not just Apple that Microsoft is failing to copy; the Windows Enthusiasts also told us to hold our breath for Soapbox, Microsoft’s version of Google’s YouTube that never gained any traction. MSN Search similarly languished in irrelevance. Outside of its guaranteed revenues from the Windows and Office monopolies, Microsoft is a lumbering failure of epic proportions, particularly in consumer electronics, but also in embedded applications, online media sales, and mobile phone software.

In contrast to Microsoft’s seven years of embarrassing decline into me-too vaporware announcements and other impractical ideas nobody wants, Apple has been releasing regular new products that actually exist, earn revenues and profits, and expand the company’s business. Last year I published a year by year comparison of Microsoft’s announcements at CES versus Apple’s at Macworld: Innovation: Apple at Macworld vs Microsoft at CES.

How many years of yawning failure will it take before those flashing the applause sign decide to pull the plug and go do something productive with their careers?

Why Microsoft’s Copy-Killing Has Reached a Dead End

The Quiet before the Storm.
So what’s going to happen at this years’ Macworld? Apple has worked hard to keep things under wraps to build anticipation. Little seems to be said outside of a widely rumored ultra mobile laptop and an expansion into movie rentals that will likely pair iTunes 8 with mobile playback on the iPod and iPhone, and living room playback via Apple TV. In the next article, I’ll take a look at other possibilities.

Apple’s quiet pre-Macworld anticipation period is designed to build excitement around its latest offerings, and as a side effect, the delay between events offered an uncritical reprieve to the vapid dullness of CES. In the meantime, the usual suspects are working hard to spin together a climate of fear and loathing of all things Apple. That’s an article unto itself as well.

Ten Big Predictions for Apple in 2008

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