Daniel Eran Dilger
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The Case of the Top Secret, Missing Windows Mobile Phone


Daniel Eran Dilger

Stories of a top secret Windows Mobile phone being stolen have started making the rounds, suggesting that Microsoft is worried that its latest technology contained on the phone might be appropriated by its competitors, particularly Google’s Android and Apple’s iPhone. Is it a case of incompetence, marketing, or inventive journalism?

Secure remote wipe?

To be sure, Windows Mobile has its flaws. But the reason why so many Windows-centric IT shops, including the White House, have invested so much money into the mobile platform that the rest of the world is abandoning is its promise of air tight security … from the company that invented security with all the tightness of air.

When compared to the iPhone at its original unveiling, Microsoft representatives bragged that Windows Mobile phones had the inside track on secure management, allowing administrators to remotely wipe phones that might contain sensitive information (except for any data that might be on memory cards, where most data would actually be).

That makes it curiously puzzling that a development model containing Microsoft’s latest software, managed by the company itself, could possibly involve any threat of revealing its secrets. If Microsoft can’t manage its own phones, how can shops paying Microsoft to deliver a secure platform expect to not lose their own corporate data when phones end up missing?

Of course, Windows Mobile’s secure remote wipe is no longer a competitive advantage over the iPhone, given that Microsoft licensed that feature to Apple for use in iPhone 2.0, without the limitation on memory card wiping. Any enterprise-managed iPhone can be securely remote wiped.

Gartner approves iPhone for limited enterprise use

Secret features revealed?

Given the failure of the Windows Mobile phone to live up to its security hype, what top secret features might industrial spies obtain? Microsoft didn’t have much to show off at Mobile World Congress in Windows Mobile 6.5 apart from a new honeycomb app launcher and a less brain damaged version of Pocket Internet Explorer. The rest was just marketing fluff: a promotional deal with LG to not talk about Android, and an official expression of intent to eventually launch a software store and cloud services just like Apple’s.

Commenting on a Slashdot thread discussing the theft, user Cornelius the Great wrote, “This is pretty much non-news. WM 6.5 beta has been leaked in various iterations and some of the guys at xda-developers have already cooked these into roms for several devices.

”I’ve even flashed it onto my HTC Touch Pro just to see what it’s like. Guess what, (surprise!) it’s slower and even more bloated than WM 6.1. It didn’t last for more than a couple hours before I got fed up and rolled it back. Honestly, 6.5 didn’t add anything useful to 6.1. Just a honey-comb UI that looks crappier/more jerky than TouchFlo/Manilla or Spb Mobile shell.

“I don’t really think MS has to worry about trade secrets about its ‘new and improved’ mobile OS being leaked to Apple, RIM, or Google. The only benefit a competitor would gain is a quick laugh.”

Slashdot | Microsoft Secret Prototype Phone Stolen

Embarrassment or pride?

A report on Telegraph.co.uk stated that Microsoft “fears that leaks regarding the features and early bugs in the software could mar the launch of Windows Mobile 6.5 which the company hopes will give it the edge over the iPhone and the new Google Android operating system. The new product includes support for touch-screen technology similar to that found on the Apple iPhone.”

Of course, the first problem is that Windows Mobile 6.5 doesn’t really have touch support ‘similar to the iPhone,’ but instead supports stylus-oriented resistive screens rather than finger-savvy capacitance sensing technology used on the iPhone. That results in users needing to press methodically and deliberately on the screen, an entirely different experience compared to the iPhone. Resistance-stylus screens are required to keep alive the fantasy of Bill Gates’ future of Tablet PCs, where everyone walks around writing on electronic pads with big screens using a fake pen.

Never mind that that approach has failed to take off for twenty years now, pioneered by GRiD, developed graphically by Apple in the Newton, briefly sold successfully by Palm before it moved into smartphones with mini keypads, and replicated by a series of Windows CE devices that never went anywhere. Stylus touch screens are another videophone, something everyone anticipates for the future despite a long history of deliberate rejection in the market.

Windows Mobile 6.5 shows clever burst of originality. Haha no
Newton Lessons for Apple’s New Platform
The Egregious Incompetence of Palm
The Spectacular Failure of WinCE and Windows Mobile

Pay no attention to the OS behind the curtain

Without having anything really new to expose, apart from an apparent “global opt out” program on its remote wipe feature, is the missing Windows Mobile 6.5 phone only a threat in that it might expose how little progress Microsoft has made in its efforts to catch up to the iPhone?

How could that be the case when it is common knowledge that Windows Mobile 6.5 is only a placeholder for the version that was “really” supposed to take on the iPhone: Windows Mobile 7. Recall that it was originally supposed to come out by early 2009, just two years and change after Apple unveiled the iPhone. Microsoft not only couldn’t get that together on time, but couldn’t even fake a vaporware version that could be convincing enough to parade out at MWC.

Or more likely, as Windows Mobile 7 slipped further into a Longhorn-style cattle drive to an unforeseen destination around 2010 or later, Microsoft realized that blowing its feature load in early 2009 would simply leave the company’s advocates fantasy-free as Apple trampled the company’s future roadmap with its predictable series of iPhone updates executed with the same brutal regularity as Mac OS X.

Microsoft’s Zune, Vista, and Windows Mobile 7 Strategy vs the iPhone
Microsoft plans “Skymarket” apps store for Windows Mobile 7 in 2009

If you like Copland, you’ll love Gershwin!

It was back in December of 2007, a year after the iPhone was first shown, that Microsoft publicly outlined in Copland-esque vagaries what Windows Mobile 7 (“zooming, scaling and a new suite of Win Mobile apps, including Internet Explorer, email, SMS and photo/music management, […] ‘there’s talk about doing some sort of collaboration with the Zune team, but that’s still up in the air.’”) and Windows Mobile 8 (“This is the version you’ve been waiting for, implementing a completely redesigned user interface, ‘revolutionary’ features like global search, and new concepts such as automation and connections within the phone, ideas borrowed from other smartphone operating systems. This means that you’ll be able to go from viewing a person’s address info in his contact card to seeing where he lives in map view in one click [just like the iPhone].”) were envisioned to offer. Essentially, they would catch up to iPhone 1.0.

A year later in September 2008, several months after Apple deployed iPhone 2.0, Microsoft was assuring the faithful that, while Windows Mobile 7 had again been delayed, this time from early 2009 to late 2009, there would be a minor release in the interim while the company spell checked the names of its own products, like “Internet Exlorer” (below).

With iPhone 3.0 now on the horizon, that interim release of Windows Mobile is now expected toward the end of 2009, and Microsoft isn’t even talking about 7 and 8 any more. Not to worry! “Customers don’t have to sit back and wait,” Microsoft product manager Scott Rockfeld said in one report. “There’s tons of stuff coming from us and our partners.”

 Wp-Content Uploads 2008 08 Pasted-Graphic-13
Microsoft outlines what’s coming in Windows Mobile 7, 8
Windows Mobile 7 release delayed

Vista II: This Time It’s Mobile

Not wishing to relive the Windows Vista debacle in the mobile world, a market where Microsoft doesn’t even have a monopoly to leverage, the company has clearly opted to keep its Windows Mobile 7 plans as tightly under wraps as possible and throw out a meaningless distraction in the form of Windows Mobile 6.5 in the interim.

In other words, Windows Mobile 6.5 is a stalling placeholder along the lines of Windows Me, designed to serve as the lightning rod for marketing hype until the company can manage to push out the next Windows XP for its mobile platform. The problem, of course, is that Microsoft doesn’t have the time to throw away another year or two.

As much as the company would like to think of the iPhone as another Macintosh that it can slowly overwhelm using its corporate presence, the fact is that the iPhone has already moved decisively into corporate use and has also firmly entrenched itself in the minds of consumers as ‘the smartphone to have,’ particularly in the US, the only region where Windows Mobile ever had any real presence.

Microsoft should have figured out by now that Apple isn’t the same company it ‘black widow-partnered’ with in the early 80s. Today’s Apple is a consumer company with retail outlets, not a high-end print and multimedia niche solutions provider. That’s why Apple trounced Microsoft with the iPod; Microsoft was simply far outside of its element with the Zune. Similarly, Windows Mobile doesn’t solve unique problems for corporate users that the iPhone doesn’t; instead the reverse is true.

Windows 95 and Vista: Why 2007 Won’t Be Like 1995
Windows Vista, 7, and Singularity: The New Copland, Gershwin, Taligent

Separated at Birth: the Apple and Microsoft Story

If Microsoft’s Windows Mobile division weren’t part of Microsoft, it would be a frail underdog not unlike the Apple of the late 90s. While Microsoft was large enough back then to where it didn’t face much threat in pushing out Windows Me as a weak placeholder in advance of XP, Apple’s parallel efforts, to coast on its re-warmed versions of System 7 (shipped as Mac OS 8 and 9) in advance of its ability to launch Mac OS X, were the best the company could hope to do given its circumstances.

Apple gambled it all and ended up with a struggling win, but Mac OS X only really hit the mainstream in 2002 and it took until 2005 before Microsoft began taking it serious as a competitor. It’s taken another three years for Apple to really leverage Mac OS X’s strengths to create major new growth in desktop Macs, as well as to use its OS software to deliver the iPhone, iPod touch, and Apple TV. And some of Apple’s success can be attributed to slack competition from Microsoft related to its inability to push out Vista over that same half decade.

Microsoft doesn’t have a decade to plug away at Windows Mobile. Unlike Apple ten years ago, Microsoft faces intense competition, not from a bungling monopolist asleep at the wheel, but from Apple, Android, Symbian, RIM, Linux, and now even Palm. When faced with real competition from peers on equal standing, Microsoft does not have a great track record. Each of Microsoft’s competitors in the mobile space have key and striking advantages to wield as weapons against it: Apple has consumers; Android has cost advantages; Symbian has entrenched, mature business worldwide; RIM has an edge in enterprise messaging; and Palm has something new and flashy to show.

SCO, Linux, and Microsoft in the History of OS: 2000s

Zune II: Phone Edition

Of course the reality is that Microsoft doesn’t have too many options. It has no Windows Mobile 7 to ship. Like Apple in 2007, the company has chosen priorities for this year, and in Microsoft’s case it has needed to focus on shipping Windows 7 to put out the Vista fires. Two years ago, Apple had the luxury of delaying Leopard for several months to finish the iPhone, because Tiger was doing well enough, Mac sales were booming after the Intel transition, and the iPhone offered the company more sizzle.

For Microsoft, Windows Mobile 7 does not offer much hope. By the end of 2009, the company will have similar market share in the smartphone market as it once claimed with the Zune among hard drive MP3 players. No new software release is going to bump “Windows Phone” sales back up into the air after another year of iPhone advancement and the onslaught of every other smartphone maker working claim a portion of the smartphone pie.

And once the few remaining advocates of Windows Mobile discover that the interim placeholder release of Windows Mobile 6.5 isn’t even compatible with their existing phones from 2008 (just as Windows Mobile 5 killed backward compatibility with earlier devices), who will be waiting for Windows Mobile 7?

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  • http://bretbenziger.com bretbenz

    I love when you literally bash Microsoft and praise Apple. Love it! I’m curious, why does Microsoft suck so badly? Why are they always late? Is something wrong with its employees or could it be their management? Or better yet, their philosophy?

  • RobC

    @ bretbenz
    I think you nailed it at the end. A philosophy is largely determined by one’s founder/foundation. Going back to the early days of each company, it’s obvious that Jobs was driven by vision, and Gates by profits. Once the foundation is laid and built upon, changing philosophies is self-destructive. Chasing a dream may not always be profitable, but it always brings more satisfaction than chasing the bottom line.

  • Jesse

    There’s a blog called Mini-Microsoft that will give you some clues. And it’s written by a guy who claims to live them!

  • Jesse

    Oops live=love.
    As it should be, after all.

    Gates’s philosophy was “win.” It seems the same as a profit motive, but isn’t. A company obsessed with profit wants to out-sell its competitors; a company obsessed with winning wants to destroy them.

  • gus2000

    The perfect WinMo phone…I see it! It’s right over there, behind the lucky pot o’ gold, and between the Unicorn and WinFS.

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  • http://johnsessays.blogspot.com John Muir

    Great article. It’s sad to see where MS are now when it comes to the obvious platform of the future: phones.


    You hit the nail on the head there. Microsoft is a colourful rival because of it’s irrational philosophy. Companies are supposed to aim for profits. But MS does not. Redmond is forever lured away by *power* instead of efficient profit making. Microsoft are in a way just as “idealistic” as Apple – a company proud of its design tradition – but that interest of theirs lies in megalomania instead!

    I can see the battle lines being drawn as we speak for the next round in all of this.

    In the one corner: Apple, RIM and the rest of the successful Smartphone makers

    In the other: Microsoft and its OEMs, with Windows 7 Netbooks

    I think the fight will be which becomes the ubiquitous device. The mainstream desktop computer is already doomed. So which will it be? I expect Daniel will have lots to say about it!

    My money’s on the smartphone and iPod touch.

  • luisd

    @Jesse – Wow! That mini-Microsoft blog is quite a place! And I’m sure it is just the tip of the iceberg. After reading the comments there, from MS employees, it is clear why the company is going the way it is going.

  • carlo.98

    @ Jesse

    Also checked out the mini-microsoft blog. It’s a nice read.

    @ John Muir

    I don’t think the battle lines will be that simple. Microsoft could win this one but not through WinMo. Drop WinMo. License Exchange/ActiveSync integration to Google, Nokia, whoever else crops up (they’ve already licensed that with Apple while RIM has a messaging system they have to protect). Voila! Exchange becomes a de facto reality in smartphones, then a strategic leverage against other vendors almost on par with the MacBU. Microsoft can’t dominate this industry. But they can still make money out of it.

  • addicted44

    In my opinion, its a customer issue. The kind of customers MS has historically served are twofold (1) Corporates (2) OEMs like HP.

    What is most important for these customers is stability. They don’t want their OS changing, because all it means is more costs for the extra testing. In the absence of a true OS competitor (Apple was only selling its OS on its own hardware, and businesses don’t want to be tied to 1 company. With PCs, customer service was provided by Dell/HP, etc), this suited MS just fine too.

    The party went along nicely, until the internet came along, and companies realized they were better off standardizing their corporate systems on browsers, rather than OS’es. So IE took off. Once again, it became the defacto default browser for everyone, and being available only on Windows, made MS rich, without needing progress.

    And then Firefox came along, Linux got more powerful, and companies realized they were better off standardizing on open HTML standards, as opposed to IE. And then all hell broke loose, because folks did not need Windows anymore to work.

    Unfortunately, that culture still remains in MS. Which is why it is headed by a sales and marketing guy (Ballmer) because thats all they needed to do over the last few decades. Product development is not a major focus.

    Unfortunately, many really good employees (they really tend to hire the best) are getting suppressed under the weight of bad management.

  • tundraboy

    I figured this out long ago. Microsoft is not a software company. Microsoft’s expertise is in the acquisition, extension and perpetuation of monopolistic market positions through shrewd deal-making and contracting with both its upstream and downstream business relations. That it did so in the software industry is an accident of history. It just so happened that the software industry in the early 80’s was ripe for the taking by an aggressive smart monopolist who was willing to cross the bounds of legality.

    In an earlier era, the aggressive monopolist was Standard Oil. Standard Oil didn’t sell a better brand of crude, but they were great at smothering their competitors with a combination of legal and illegal methods. Just like Microsoft, eh?

  • tundraboy

    @addicted44 “Unfortunately, that culture still remains in MS. Which is why it is headed by a sales and marketing guy (Ballmer) because thats all they needed to do over the last few decades.”

    Just goes to show the extent of cognitive dissonance going on at Microsoft. They really thought they were great marketers because they were selling product like hot cakes. Of course this was only true for the products were they had a (near) monopoly. But against a real savvy marketer their real talent, or lack thereof, was quickly unmasked.

  • Michael

    great article dan, i dont think anyone really cared to report what was happening behind the scenes on WinMobile deal-making ;) of course, in the same sentence, they also bash apple and its innovative interface that everyone is now desperately trying to rip off. And yeah, it makes sense that WinMobile is not nearly as relevant as the desktop version when it comes to dominance and sales… thankfully :D And thanks to comparisons that they made the interface WORSE than the previous versions, we can all laugh, and so can everyone else… like most microsoft products (shoddy, unstable, energy-inefficient).

    as for ballmer, the world would be better without a guy like that…

  • http://all.net/ hylas

    Nicely put. You’d be hard pressed to fit the edge of a piece of paper between that tightly formed volley.
    Death by a thousand cuts?

    Pretty priceless piece of prose – music to those of us fed up with contrary -isms.
    Truth rings.

  • http://www.cyclelogicpress.com Partners in Grime

    Apple has so many great innovations. I can hardly wait to see what they have planned for iPhone 3.0.

  • jayK

    Nice stuff daniel, clearly reflects the lack of innovation on microsoft’s part and their stupid publicity gimmicks. Reminds me of a Mac\PC ad in which PC is throwing all money in publicity instead of actually fixing vista, lol

  • iLogic

    Good article Daniel, and it has provoked me to my first post!

    I kind of feel bad for Microsoft, it feels like for the last couple of year the company has really had no soul. I don’t understand what they’re trying to prove. Why stretch thin to compete in so many markets? Even if you do have the cash to burn…

    If you have the highest market share (85%??) of computers worldwide, wouldn’t you do everything in your power to consistently exceed the expectations of your millions of users? I mean to really be the best out of knowing that you have the responsibility and opportunity to be a greatest software company to those countless people? That would be what would drive me every day if I were senior at Microsoft, screw having my name on every piece of hardware, I’d want to be king of the PC and then build upon that…

    I once believed that building a PC slapping Windows on it was the ultimate freedom of having a great PC, but that’s not really the case. Great hardware sucks with poor software. And I think that consumers in general aren’t buying that “get the best hardware system to have the best PC experience” anymore. Proof of that is that cheap OEMs like eMachines are surviving just fine, and people buying Netbooks too. That really affects the way Microsoft is perceived. “I don’t really need all that power, I don’t really need Vista” – With Apple the opposite is happening, higher quality hardware is desirable for it’s fantastic operating system.

    And my point is, that this “throw my seeds everywhere and see which one sprouts” is again manifested in Windows phones. The software apart from it’s main honey comb screen doesn’t really shout software excellence. It says of Microsoft, that it doesn’t really know how to compete in this space and it’s trying to wing it because that’s what it does. It’s a fledgling spawn from a sickly old Windows Mobile platform that was neglected for so long. And why was it all of a sudden resurrected into stardom? Because the iPhone made Smart Phones red hot and the company has arrived to the party too late to have a real foundation. I think Windows Mobile 6.5 is a complete fake, even 2 years into the arrival of the iPhone, it fails miserably at saying it will come for Apple.

    This whole thing is more evidence to manufacturers that they really don’t need Microsoft. If software is what sells their hardware, then Microsoft is a plague. If they go Microsoft then they’re forced to compete on the hardware level. If they do well with one model, the next model won’t do so well because hardware is easy to copy. (Yikes if they want to introduce a patented technology if they stick with MS) They’ll hit a brick wall with Microsoft again. Software is what makes OEM products truly different and Microsoft won’t let manufacturers touch it’s software, which may lead them to compete on price, and that gets ugly because their products lose value. I think everybody else who licenses Android, Symbian, etc, should develop their own interfaces and modules combined with competitive hardware specs to truly standout.

    Yet this won’t solve it for them, because they still don’t own that software in it’s entirety. (Which begs the question, why on earth did Nokia open Symbian?)

    Apple, after all is said and done, has the highest potential because of owning it’s unique hardware and software combination with superb integration to it’s services and devices. There is nothing that the iPhone can’t do right now, in terms of software, and so the value of having better hardware to push that possibility is the direction it will take, this will make it the best device hands down for a couple of more rounds.

    One area they are all desperate to catch up to is the App Store, the App Store is something truly remarkable because Apple already had the foundation of the iTunes store technology. Even if Symbian, Android, develop these, will their platforms risk becoming like Microsoft in that they would have to support different hardware? Maybe, Maybe not, I ask because I really don’t know.

    The iPhone has truly changed everything.

    Sorry about my long post, I was excited to share my first comment!

  • Dan Kurt

    re:tundraboy { 02.21.09 at 1:29 pm }
    “In an earlier era, the aggressive monopolist was Standard Oil. Standard Oil didn’t sell a better brand of crude, but they were great at smothering their competitors with a combination of legal and illegal methods. Just like Microsoft, eh?”

    Ahistorical myth about Standard Oil. Wish I knew the real truth about Microsoft.

    Dan Kurt

  • http://www.svpocketpc.com Pony99CA

    Another clueless article.

    First, remote wipe is about wiping DATA off of your device that competitors, identity thieves or phishers could use. As far as I know, it does NOT wipe the operating system itself.

    [Remote wipe can be used to lock the unit. After this story appeared, Microsoft announced it had wiped the missing phone. OF course, there was no way to verify that, as anyone could obtain WiMo 6.5 and say they’d stolen the missing phone to get it, and Microsoft could plausibly deny it – Dan]

    As I doubt the device in question had important data on it, remote wipe wouldn’t help. Microsoft is worried about details of its OS being revealed, not the data on the device.

    Second, Windows Mobile 6.5 isn’t incompatible with current devices. Even you proved that by citing people who have downloaded beta versions. You can’t even keep your facts straight within your article. There may not be any official upgrades available, but that’s another issue.

    [Beta compatibility is not the same thing as offering an upgrade. Snow Leopard betas once supplied PPC binaries, but the shipping version will be Intel only, for example.

    Microsoft has stated it simply won’t ship its new browser for current phones, a major portion of WiMo 6.5: “Regarding making IE Mobile available as a separate download or update, the rich media experiences that IE Mobile 6 enables require more powerful, advanced devices. That is why it will not be available as an upgrade or direct download for current phones, but rather will be made available on new phones.” – http://blogs.msdn.com/windowsmobile/archive/2008/11/11/internet-explorer-mobile-6.aspx ]

    Third, Windows Mobile 5 wasn’t incompatible with previous devices, either. In fact, Dell and HP both launched official WM 5 upgrades to some of their previous Pocket PCs.

    [WM 5 introduced a new run from RAM architecture that broke compatibility with the vast majority of the installed based of WM phones. The fact that you might be able to find some models that could be upgraded does not have any relevance. ]

    Finally, saying “No new software release is going to bump ‘Windows Phone’ sales back up into the air after another year of iPhone advancement and the onslaught of every other smartphone maker working claim a portion of the smartphone pie” is ridiculous rhetoric. The iPhone came from nowhere to grab lots of market share, Android is in a similar position, RIM has reinvigorated itself and improved its market share and even Palm, written off by many as dead, has been getting positive press and buzz with WebOS.

    If having a small share of the market for a few years meant the death of an OS, MacOS would have been dead before the 90s.

    [Mac OS had nearly a 100% share of the professional graphics desktop in the 80s. Losing that share to Microsoft’s Windows in the early 90s did mean the death of that OS and nearly of Apple itself.

    You seem to assume that everyone else will replication Apple’s success with the iPhone. Except that nobody did that to the iPod. And Android (and RIM BlackBerry Storm) have done nothing similar at their launch. Palm also got buzz over the Foleo, which it never even released. You can start talking about the Pre at the end of the year when it actually ships. ]


    P.S. It’s not likely this will be posted, I suppose. My earlier rebuttal to your WM 6.5 hit piece hasn’t been approved, even though found time to write this. Apparently you only like comments from sycophants telling you what a “great post” you wrote. There’s a word for people like that….

    [Unless your post is just strings of profanity, I don’t intentionally refuse to publish it. Sometimes WordPress will flag comments as spam, which makes them harder to post, but most comments are approved automatically unless they trigger some flag, such as posting lots of links. If you post something and don’t see it appear, you can email me. No need to be a douche nozzle though. ]

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  • http://home.comcast.net/~daguy daGUY

    So let me get this straight. 3 years after the iPhone was first demoed, Microsoft will be releasing a stepping stone (WM6.5) to another stepping stone (WM7) to finally their “real” iPhone competitor (WM8). To clarify, WM8 is their eventual iPhone *1.0* competitor, according to their own description of “revolutionary” features like linking a contact to their address on a map (wow!). This is the best they can do??

    Microsoft’s great at making announcements, talking about fancy features coming sometime in the future, etc., but they seem incapable of actually *shipping* something. They can talk all they want, but until they actually release a REAL product on par with their competition, they’ll continue to fade into irrelevance.

    Judging by what we’ve seen so far (like that fact that more mobile web browsing traffic comes from the iPhone alone than every WM device combined sold over the last 10 years), it may already be too late.

  • tundraboy

    @Kurt: “A historical myth about Standard Oil. Wish I knew the real truth about Microsoft.”

    A historical myth? The record is there for all to see. Do a little digging in your local library.

    As to the “real truth about Microsoft” you can always read the court record U.S. v Microsoft.

    Then again, there are people who will not be swayed no matter what evidence you present them. They’ll always find some junk history or junk science to cling to: Holocaust deniers, climate change deniers, and I guess there’s the new category of robber baron deniers.

  • sharp_jiang

    fantastic article. couldn’t be better.
    I like it !!!!

  • Dan Kurt

    re: tundraboy { 02.24.09 at 12:22 pm }
    “@Kurt: “A historical myth about Standard Oil. Wish I knew the real truth about Microsoft.”

    tundraboy: “A historical myth? The record is there for all to see [ on Standard Oil]. Do a little digging in your local library.

    As to the ‘real truth about Microsoft’ you can always read the court record U.S. v Microsoft.”

    Here is an essay on Standard Oil by an Economist who spent his career analyzing Antitrust, D.T. Armentano:

    “One of the most famous (and misunderstood) antitrust cases in history is US v. Standard Oil of New Jersey (1911).

    The popular explanation of this case is that Standard Oil monopolized the oil industry, destroyed rivals through the use of predatory price-cutting, raised prices to consumers, and was punished by the Supreme Court for these proven transgressions. Nice story but totally false.

    First, Standard never even monopolized petroleum refining, let alone the entire oil industry (production, transportation, refining, distribution) which would have been an impossibility. Even in domestic refining, Standard’s share of the market declined for decades prior to the antitrust case (64% in 1907) and there were at least 137 competitors (firms like Shell, Gulf, Texaco) in oil refining in 1911.

    “A free-market ‘monopoly’ supplier is theoretically possible but not necessarily harmful and would not rationalize any antitrust regulation.”
    Second, although predatory practices were alleged by the government at trial, Standard offered rebuttal on all counts. Neither the trial court nor the Supreme Court ever made any specific finding of guilt on the conflicting charges of predatory practices.

    Third, petroleum market outputs increased and prices declined for decades during the alleged period of “monopolization” by Standard Oil. For example, prices for kerosene (the industry’s major product) were 30 cents a gallon in 1869 and fell to about 6 cents a gallon at the time of the antitrust trial.

    Finally, the Supreme Court broke up the Standard Oil holding company not because of any demonstrable harm to consumers (there was none) but because it discerned some vague “intent” to monopolize through Standard’s many mergers, an “intent” that just as clearly never succeeded in producing any monopoly. Yet generations of economic and legal commentators have been misled about monopoly and the alleged efficacy of antitrust policy because of the ‘facts everybody knows’ concerning the Standard Oil antitrust case.”

    BTW, Microsoft “won” its case at the appellate level, no? The Armentano essay also gives a view on the Microsoft Antitrust case. If you or any of the lurkers are interested read it here: [http://mises.org/story/2694#4d]

    Dan Kurt

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  • Ringgo

    Very interesting, Dan Kurt’s info. Following links to Armentano was a roller coaster ride, culminating in a bizarre article…