Daniel Eran Dilger in San Francisco
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Dear Ed Bott: No, Windows 8 is not the new XP

Daniel Eran Dilger

Windows Enthusiast Ed Bott of ZDNet compared the skepticism and apathy facing Windows 8 to the gradual adoption of Windows XP just over a decade ago, making the case that nothing has changed in over ten years and that everything is fine and there’s nothing for Microsoft to worry about. He’s wrong, here’s why.
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Pay no attention to the revenues behind the curtain

Microsoft certainly has reason to hope Bott is right: that Windows 8 will be critiqued and complained about but that eventually everyone will buy it anyway, one way (upgrading) or another (buying new PC hardware bundled with the Windows 8 “we won’t say Tax but that’s what it is when you levy a fee on all products within a market because you exercise dominion over it as a quasi-authority”).

Bott is right that people have complained about Windows as long as Microsoft has sold it. But he appears to be oblivious to a signifiant new problem facing Windows 8: people and businesses aren’t buying as many PCs as they once were. They’re buying iPads.

In 2001, Microsoft reported annual net income of $7.35 billion on sales of $25.3 billion, while Apple actually lost 25 million on revenues of just $5.36 billion. But something has happened since then: OS X developed and cloned itself into iOS, hitting Microsoft on two fronts: in profitability on the high end of PCs and in volume with mobile devices.

Apple surpassed Microsoft last year, earning $25.92 billion on revenues of $108.25 billion in comparison to Microsoft’s $23.15 billion in profits on sales of $69.94 billion. Things have only gotten worse for Microsoft this year, while Apple’s earnings are projected to hit north of $40 billion on revenues of over $140 billion – an unfathomable increase of nearly 40% over its blockbuster 2011.

It might be soothing to Bott’s Windows Enthusiast audience hear that Windows XP also had adoption issues at its launch in 2001, but it’s not honest to say that Windows 8 is fated to restore Microsoft’s former position or that all this doom and gloom for Microsoft will evaporate once the money starts flowing again.

The problem with the PC isn’t that the market desperately wants a new version of Windows that looks different and has a higher version number. The real problem is that the well has run dry, and new versions of Windows won’t fix this. And really, if they’re too different, they’ll just accelerate the shift to Post PC devices.

I’ve already written a bit about the magical new layer of Metro that is supposed to be an improvement in Windows 8, so I’ll limit myself to one overloaded summary sentence here: remember when people flipped out when iTunes 10 stacked the close/dock/zoom window buttons vertically? Well Metro makes slightly more substantial changes to how Windows works than that.

But for now, let’s focus on money, the primary reason why anything happens or fails to happen in the realm of capitalist enterprise.

Prices slashed, Windows smashed

In 2001, Microsoft was selling Office for $500 and offering Windows XP Pro upgrades for $199 on Amazon (non-upgrade package started at $299, and more if you wanted to connect to a company network).

Microsoft can’t command those prices anymore because of competition. Apple now hands out OS X upgrades for $29, forcing Microsoft to sell its new Windows 8 Pro upgrades for just $40.

But it’s worse that that. iPad sales have hit conventional PCs so hard that Microsoft has been giving away Windows 8 coupons for $15 with the purchase of a new Windows 7 PC just to induce sales.

It’s actually worse than that. Because PCs have peaked. There is not going to be huge annual increases in PC shipments anymore. Everyone knows this. What they don’t always seem to see as clearly is that you can have a personal computer without having a box under your desk blowing hot air away from an Intel CPU. It just takes a little more engineering savvy to build these “post PC” devices.

Microsoft’s historical of disruption of Apple’s Macintosh in the early 90s was caused by Microsoft shifting the value of the Macintosh (software, including its own Office apps) off the Mac and onto the generic PC. Apple disrupted the PC by shifting its value (an easy to target software platform) off the generic PC and onto mobile devices that don’t even use windows, let alone Windows.

You say PC, I say Post-PC

Microsoft likes everything to be called a PC because the two letters have been closely tied to it every since it appropriated the consonants from IBM. Steve Ballmer even referred to Apple’s iPad as being a new form of PC, no doubt hoping to associate its credibility with Microsoft and suggest that just because the Windows XP Tablet PC and Slate PC and Windows 7 Tablet PC had all failed didn’t necessarily mean that an iPad-like tablet couldn’t run some form of Windows in the future.

Apple prefers to call these devices “Post-PC,” highlighting the change that’s occurring in their design, economics and software (particularly their operating system).

Rather than quibble semantics, let’s just note that Apple’s Post-PC iOS devices lack an Intel CPU, a hard drive, very much RAM, and are extremely simple to operate and manage. They are also cheaper, but (at least for Apple) remain very profitable. More so than typical PCs or even Macs.

PC-era think tanks like to credit PC shipments to Microsoft, so they sort smartphones, the iPod touch, and “media tablets” into separate silos, praying that soon Microsoft will awake from its slumber and return to its former position of owning all these markets (despite these predictions being false year after year).

Apple also likes to separate iOS devices from PCs, for different reasons of course. In reality though, Apple’s “post-PC” fixation is just one way of looking at the market. It’s also useful to realize that Apple didn’t just introduce new mobile device categories to disrupt the conventional market for PCs. What Apple essentially did is reexamine its prospects for the Macintosh, and then make a huge course correction.

The Mini Mac

Apple (and by that I mean Steve Jobs) realized that no matter how good the NeXT/Mac was, it would remain in a niche position while industry-standard Windows PCs continued to rake in the majority of available revenues and profits, due to vast economies of scale.

In 2001, the Mac was essentially starving itself to death (a problem exaggerated by the post dot com recession that helped to derail what progress Apple had been making). Jobs realized Apple needed revenues and economies of scale, so he initiated three major strategies: retail for selling Macs; iApps for selling more Macs; and the iPod for selling greater volume.

There were a finite number of Macs Apple could sell, particularly given the competitive constraints of a market saturated in low priced commodity PCs. Introducing the iPod allowed Apple to sell a new product broadly, using the same ease of use and design savvy it had put into the Macintosh. Five years later, iPod was generating more than half of Apple’s revenue.

More importantly, rapidly increasing iPod sales were supporting vast economies of scale, allowing Apple to take a controlling position in the global flash memory market. This helped position Apple for stage two: deploying a mobile version of the Macintosh as a smartphone.

Rather than just being a well designed bit of hardware like the Mac, the iPhone was a Mac, running the same core software. Apple rapidly went from selling fewer than a million Macs each quarter to selling a few million Macs per quarter, but added tens of millions of iPhones and iPod touches, and later iPads.

In first two quarters of this year, Apple sold over 50 million devices running OS X and iOS, each quarter. Ten years ago, it was selling fewer than one million Macs per quarter. So Apple is now consistently shipping more than 50 times (actually more like 67 times) as many devices as it was a decade ago. More profitably, to boot.

What’s happened to global PC shipments in the last ten years? They went from 128 million in 2001 to nearly 353 million last year. That’s growth of 2.75 times (across the entire PC market, including Apple) compared to growth of over 50 (67) times, just at Apple.

But iOS isn’t a PC!

Don’t think iOS devices aren’t PCs. They are personal computers and they are replacing PC sales. Microsoft recognized this would happen too, and in fact had plans in place to embrace this market and extend Windows over it. It just failed to execute.

In 2001, Microsoft was hatching plans to launch PlaysForSure (essentially a Windows for MP3 players) and it already had in motion an intent to create Windows-branded smartphones, nearly five years ahead of Apple.

However, after years of failure with PFS (and its Zune replacement) and despite its lengthy first-to-market position with Windows Mobile, Microsoft has expanded into the “post-PC” market by a figure really, really close to zero.

It has since completely given up on copying the iPod, and despite its perseverance in refashioning Windows Mobile as WP7 and now WP8, hasn’t gained any traction in smartphones. In fact, it has lost its once significant smartphone market share, plummeting from above 20% to its current share of less than 3% and shrinking.

Windows Phone is doing so badly that Nokia, Microsoft’s largest and staunchest mobile partner, actually sold more of its abandoned legacy Symbian devices (3.4 million) than its new Windows Phone Lumia phones (2.9 million) in the last quarter. Windows Phone is not just unpopular, it’s so toxic it lethally crippled what was not too long ago the world’s leading smartphone manufacturer.

Microsoft hoped its partnership with Nokia would give Windows Phone a footing in the market, but its incompetence in mobile software has instead taken Nokia out of the market, making it that much easier for Apple to expand (not just in phones but in maps, just wait and see).

Big expectations for Windows 8

Not to worry, the Windows Enthusiasts tell us. Microsoft doesn’t need a lack of competition, high ASPs, expanding revenues, nor even any support via Post-PC devices. The legacy pile of PCs out there will magically blow money in Microsoft’s direction once Windows 8 hits because that’s what happened in the past.

Well here’s something else to consider. Back in the day, I liked to point out that Apple’s Mac sales were unfairly compared with global PC shipments because lots of PCs were selling for uses that weren’t really competing against the Mac.

In particular, I liked to point out, tremendous numbers of Windows PCs were being used for cash registers or for terminal emulation, tasks that didn’t require a PC (and certainly not a Mac). The “PC market” of IDC and Gartner wasn’t comparable to the Mac market; it was a bunch of markets gerrymandered together to minimize Apple’s relevance.

In one sense I was right, but at the same time, Apple was still competing against the effect of those non-desktop PC boxes, because those millions of PCs were creating vast economies of scale that benefitted Microsoft but not Apple.

Over the last decade, Apple’s switch to Intel helped the Macintosh platform to also benefit from this scale. At the same time, however, Apple has now created vast economies of scale, first with iPods and then iOS devices, that solely benefit it and not Microsoft nor its Windows PC partners.

And today, you’re already seeing cash registers, terminal emulation, and other dummy tasks being performed by iPads rather than PCs. This is profound.

The value of this new economy of scale has been channeled into the development of iOS/OS X, Cocoa dev tools and third party apps and has funded the ongoing development of hardware that has enabled Apple to build extremely popular and profitable products like iPhone 4/5, iPad and the MacBook Air.

Volume value that once supported Microsoft and Intel (enough to coin a popular portmanteau) is now increasingly, and exclusively, benefitting Apple. This is enormously important.

A for effort, but no paycheck

Intel has desperately tried to get its Windows PC partners to clone the MacBook under its “Ultrabook” program, even as Microsoft has floundered in duplicating the iPod, the iPod touch, the iPhone and now the iPad. Turns out it’s really, really hard to match the efforts of a competitor that is already selling in such quantity that their economies of scale put you at a tremendous disadvantage.

This reality is what drove Atari, Commodore, Acorn and everyone else (apart from Apple, but nearly so) out of the PC business once Windows ramped up with too much volume to buck against. In the history of personal computing, we’ve only seen Microsoft win. But that history hasn’t been very long.

Windows Enthusiasts have a lot of faith that Windows 8 will turn Microsoft around by giving the company an alternative to the iPad to sell in comparible volumes, leveling the playing field. But they are assuming a lot about the simple appearance of a new product.

Microsoft was late to market with PFS, but by 2004 there were a large number of iPod competitors offering “choice.” Microsoft was also a bit late with the Zune and Zune HD, but didn’t gain a damn worth of traction with either over several years. The same could be said of Windows Phone. And the original Surface (the big ass table).

Ask any sports enthusiast: showing up is not the same as winning.

Scratching the Surface

There are tremendous problems facing the Surface. The first: it’s based on a lie. It’s called “Windows 8 RT,” but consumers associate “Windows” with two things: a familiar interface and the ability to run Windows apps. Surface RT supports neither. I pointed this out from the start and was ridiculed for it right up until the critics realized they had to agree.

The non-RT, Intel x86 version of Surface not only isn’t available yet, but it’s going to be too thick, expensive and heavy to compete with iPad, just like any other Ultrabook or previous Windows Tablet.

So Microsoft is giving users a choice: a tablet that advertises itself as more powerful than the iPad when it’s really not, and a netbook that’s less powerful than a MacBook. Two phony products that will leave users unhappy, just like the Zune and Windows Phone.

More problematically, even the cheaper Surface RT isn’t profitable. It’s a desperate move by Microsoft that is very similar to Amazon’s loss leader Kindle Fire or Google’s loss leader Nexus 7: try to get established at a competitive price point and then somehow convince buyers to start paying profit-supporting prices at some point in the future. That’s a stupid plan, but beggars can’t be choosers.

Hardware is hard

On top of this, recall that the Surface comes from a company that only has had one moderately successful hardware product: the Xbox. That success has been in volume sales, not in profitability, as Microsoft has shoveled more than $8 billion into its Xbox program and is now only barely turning a profit on it.

Now consider that four years after the 2005 launch of the Xbox 360, Microsoft’s customers were still dealing with a 54.2% failure rate due to the Red Ring of Death, the result of sloppy manufacturing.

Apple also has dealt with a series of manufacturing issues, but it has been making hardware for more than 30 years. And for all the coverage of Antennagate and melting batteries, Apple hasn’t ever had to write off a billion dollars in warranty expenses as Microsoft did on the Xbox 360.

In contrast, Apple has become particularly adept at making razor thin, super light, incredibly precise, impressively engineered devices over the past decade, the result of those vast economies of scale in iPod, iPhone, iPad and Mac shipments that Microsoft doesn’t have.

Microsoft’s Surface is a 1.0 hardware experiment following a series of dismal Zune failures and the Xbox 360, which was the worst consumer hardware product in the history of consumer hardware.

Soft on software

But Surface also runs software. Microsoft has over 30 years of experience in creating software, but not necessarily good software. Unlike pundits creating a list of Apple failures, we don’t need to go back to the early 80s to discover Microsoft’s blockbuster turkeys. The last decade is chock full of them.

Outside of Server products that can command high profits, Microsoft’s consumer software history over the past decade has included such memorable events as the Windows XP security meltdown that wasn’t mitigated until its fourth Service Pack (a problem big enough for Apple to drive its “Get a Mac” bus through).

There’s also: every release of Windows Mobile; a series of bungled, belated Windows Phone releases that have viciously pummeled the fragile remains of Nokia; a web browser so bad it couldn’t hold on to half of its market share, despite being free and tied to a monopoly platform; Silverlight, an Adobe Flash competitor that couldn’t survive the onslaught of iOS either; Windows Vista; a series of Office for Mac titles so terrible Apple had to develop its own iWork suite and, of course Bing, that incredibly popular search product nobody uses because it’s awful.

Saying that the Surface is a combination of Microsoft’s Xbox 360 hardware savvy and its Windows Phone software savvy is like one of those jokes about a train engineered by Italians, serving English food, managed by Portugal and financed by Greece.

Microsoft needs to focus on what it is good at, and stop chasing Apple just because it wants to be good at what Apple is good at. Because as much as Steve Ballmer and Bill Gates want to be Steve Jobs, they are not.

24 comments

1 broadbean { 10.22.12 at 1:06 am }

I really enjoyed this article. Can’t wait for your Christmas lunch with Steve Ballmer.

This one, though “you can have a personal computer without having a box under your desk blowing hot air away from an Intel CPU” was both ungracious and freakin’ funny! Ok, not Mac Pro funny, but still memorable!

2 jfatz { 10.22.12 at 1:23 am }

*counts Windows XP Service Packs on fingertips*

Um…

[Security problem still isn't fixed, is it? - Dan]

3 markos741 { 10.22.12 at 1:49 am }

I always enjoy your articles. And of course, your tweets as well.
But in this case, I think you are “forgetting” two things. Or better yet, not evaluating them as important.
First, although people are buying iPhones and iPads like they used to (or even more), there is a significant chunk that are getting tired of iOS. I love iOS, it works, and I can’t work without it. There are very few apps on Windows that can replace the ones I use on iOS and sadly, that does not include the professional apps (like medical apps). But, one part of me, is getting tired of looking at the same old iOS screen. And I’m not the only one. It is a strange feeling, I know, since we’re talking about a great OS, but many of us experience it.

[If iOS is really "too boring," then Android and WP7 are doing a terrible job of exploiting that problem. Too much excitement (Vista, Honeycomb) is far more dangerous than not enough (Windows xp) - Dan]

Second, Nokia is a die hard company. The Lumia hardware is first class. I understand that you are the expert and see the big picture in numbers, while I only hear what my narrow circle of friends talks about. But surprisingly, I see many of them excited about the Lumia 920, more than they are about the iPhone 5.

In conclusion, I do not think that Windows will dominate the mobile market in the near future, nor that it is a big threat to Apple, but I’m not sure that people won’t buy the new Lumia 920 (or 820). And if they do, and really good apps start coming on Windows marketplace, then the OS game could eventually change.

I think, only time will tell.

[Nokia has a history of making really nice hardware that nobody buys because it has an goofball OS on it. High end Symbian/MeeGo phones didn't burn the house down either. - Dan]

4 simonrobins { 10.22.12 at 2:53 am }

As I sit here waiting for the latest Windows 7 service pack to install, which seems to be causing the virus scanner to become apoplectic and insist on rescanning my entire machine every time the installer software writes so much as a single byte of information, a process I have been a passive spectator to for nearly 2 hours now; I do wonder how this experience has been improved in Windows 8 and Windows 8 RT because if it hasn’t then I can see quite a number of Surface tablets being used as Frisbees. That would increase sales if not market share I suppose.

5 albertop9 { 10.22.12 at 2:54 am }

Your lucidity always puts a smile on my face, Dan. Take care and keep it coming! Cheers.
A long time reader from Spain.

6 StonehamMel { 10.22.12 at 3:51 am }

Dead on target. Microsoft likely believes that the sharp decline in PC sales is because customers are waiting for Windows 8. Delusional. Many Apple critics contend that the iPad (and all tablets) are a “fad” already fading – but if true, one should see laptop sales edging back up – and except for Mac sales, they aren’t.

The brutal truth is, the market has changed, and neither Microsoft nor Google are driving – or even out front of – that change. The advertising revenue model established on desktops seems staggered by mobile, to the detriment of Google and Facebook. Amazon seems sort of safe, because its mobile app enables reasonably easy ordering from mobile, and its Kindle app for the iPad lets it easily sell media to owners of a competitive platform.

What Microsoft and Android platform purveyors are realizing is, once a buyer goes to Apple, they rarely come back. Apple has seized the high ground of teens, college students, middle management and – thanks to the iPhone and iPad, the C-suite. Generations now know computing without ever dealing with msconfig, “system restore” or a blue screen of death. They’ve never gone on a snipe hunt for a driver, or put a parallel-port printer into the trash. They’ve become accustomed to turning on an Apple device and just getting on with it. Office-simulating apps cost less than $20 for their iPads, OS updates less than $30 for their MacBooks.

There’s no space left for Microsoft, and – unless they solve the mobile ad challenge, darn little for the money-making components of Google and Facebook.

7 Raymond { 10.22.12 at 4:51 am }

What amazes me about Windows 8 is that Microsoft seems completely unaware of who its customers are and what they what. Windows is primarily used in 3 areas

1. Corporate Desktop
2. Low end budget laptops for home setting
3. High end gaming rigs for LAN play

No 3 is a very small market that has increasingly been taken over by gaming consoles. Vista was poorly received with No 2 because of the increased hardware demanded to perform adequately. Ironically Microsoft realised this with Windows 8, as it performs similarly to Windows 7 on the same hardware. Unfortunately they failed to realise that budget laptops are unlikely to have touch screens, and using Win 8 in a non-touch environment is plain awful. No 3 are just going to baulk at the changes.

It’s as it Microsoft were trying to tailor their product for the admiration of the tech media and not the people that use their products. Microsoft needs are customers that want to move with the cutting edge, who aren’t afraid of change and who think differently. Unfortunately for Microsoft those people have been getting their computing products from someone else for quite sometime.

PS While Bing might not be popular, I’ve found it to be very good at core search, without the increasing clutter google is adding to their products like social functions.

8 Wizywig { 10.22.12 at 8:41 am }

I demand that “Microsoft Tax” is no longer an allowed phrase when talking about OS upgrades. MS charges money, Apple charges money. Only Cannonical (ubuntu) does not.

[A tax is what you charge when you exercise dominion over a market. Apple doesn't "tax" anyone else's products apart from Made for iOS and iTunes/App Store, and one can deliver products that skirt that "tax," as Square does, as Amazon MP3s do, and as web apps do.

Nobody can create PCs without licensing Windows. Alternatives (ChromeOS, Linux) are not commercially viable. - Dan]

Oh and MS is offering upgrade discounts. And special pricing so non-oem buyers can finally pay reasonable prices.

MS must compete with a changing world. Apple does their own thing and the world follows or ignores. MS is fighting with the fact that 90% of the world’s computers use it’s OS. Which means someone will be guaranteed to hate the change. And most corporations use it. And so on. Apple just upgrades, shit breaks, some programmers yell, nobody cares, it’s Apple. But nobody complains that “oh, apple’s 10.8 breaks tons of applications”.

Sorry dude, if you make arguments, more than FUD please.

Now having said that. I do not think MS will be restored to it’s former glory. Because it now has real competitors. But I hope that MS will die and give rise to a new MS which will focus more on the customers. Less piece of fucking shit hardware, and crappy software, and more good designs and solid hardware.

9 The Mad Hatter { 10.22.12 at 9:12 am }

On top of this, recall that the Surface comes from a company that only has had one moderately successful hardware product: the Xbox.

Ah yes. The good old XBox. You forgot to mention that the first generation caught on fire. Nice design work.

Wayne

10 Maniac { 10.22.12 at 3:58 pm }

@ Wizywig re: “But I hope that MS will die and give rise to a new MS which will focus more on the customers.”

One of your wishes just might be granted. The “die” one.

11 Maniac { 10.22.12 at 4:16 pm }

@ Dan re: “The non-RT, Intel x86 version of Surface not only isn’t available yet, but it’s going to be too thick, expensive and heavy to compete with iPad, just like any other Ultrabook or previous Windows Tablet.”

And it needs “perimeter venting” for, as you say, “blowing hot air away from an Intel CPU.” The Intel Surface highlights two of the killer problems Intel is facing in the mobile space. Unacceptable power drain, and resulting heat dissipation problems. Intel got fat and lazy making chips for power-sucking desktop PCs running Microsoft bloatware. They flirted with RISC designs, but management stayed the course and they’re stuck with the excessively complex and inefficient x86 architecture forever now. For. Ever.

Then there’s the cost of Intel chips. Rock bottom low-end chips go for $117 or so. High-end i7 chips go for about $1000. Apple’s A6 chip? $17.50 each. Add the Windows Tax (c) on top of Intel price gouging, and poof. Your iPad killer-wannabe now has zero profit margin.

And it gets worse. Not that Apple’s business is all that important to Intel any more, but Apple can and will migrate their consumer Macs and OS X to ARM. The 64-bit ARMv8 instruction set was published almost a year ago. It’s only a matter of engineering until Apple has their own custom-designed ARMv8-based 64-bit quad-core processor that’s fast enough to replace x86 in the MacBook Air and iMac lines. Maybe by 2014 – 2015.

12 benlewis { 10.22.12 at 4:26 pm }

One thing that jumped out at me (aside from you being completely right): MSFT still makes $25B in profit even after a more than a decade of astonishing failure. Unfortunately, like Clarence Thomas or that picture of Steve Balmer you used two days ago, they will plague us for the rest of our natural lives and there is not a damn thing anyone can do about it.

13 The Mad Hatter { 10.22.12 at 4:50 pm }

What Microsoft and Android platform purveyors are realizing is, once a buyer goes to Apple, they rarely come back.

Actually once a buyer leaves Microsoft for ANYTHING, they rarely come back. I know a lot of people who moved to Linux, and won’t touch anything Microsoft now.

Apple is getting the biggest share of the migration on Personal Computers. Apple also rules tablets. Apple is second in Mobile.

End result, people are learning that they don’t need Microsoft, and Microsoft is scared witless.

Wayne

14 sohst { 10.23.12 at 1:22 am }

“And today, you’re already seeing cash registers, terminal emulation, and other dummy tasks being performed by iPads rather than PCs. This is profound.” – Sorry, up to now I never saw an iPad running a cash register or similar devices any where.

[Look up Square. There are also lots of kiosk merchants and now I'm seeing restaurants/salons outfitted with an iPad as a point of sale register. Urban Outfitters just began switching across thousands of stores. - Dan]

On the contrary, Apple is very “modern” as it tries to convert our whole life into leisure and entertainment: just have a look at some facebook entries here, stop by that nice movie there and so on. Nothing wrong with this – but I’m still sitting 8+ a day in front of my desktop, trying hard to earn my money. During that time: Facebook? Zippo. Movies? Pack it in! So, for whom in the huge industrial world Window 8/RT is useful in any way? Does anyone expect anytime soon a flock of bookkeepers switching to iPads or tablets to type in their entries? Seriously?

What I’m betting is that the next “revolution” for human interfaces will come in this sector of life. How can we improve our real lives in these really dread offices spread all over the world, waiting for a little sunbeam to enchant us while busy doing our work? Fancy little iPads and tablets are certainly not appropiate for this task.

Give me a really good idea in that area, and I promise you we’re becoming billionaires.

[I agree, tablets probably aren't going to replace offices full of PCs used by accountants. But those accountants are already using PCs to approve iPads for use by people who walk around on their job, whether sales people or executives. You say "fancy little iPads," but they can be put in a case or bolted to a desk. - Dan]

15 barbiomalefico { 10.23.12 at 2:32 am }

I agree with you when you say that Microsoft is going to die.
I don’t think that Apple will become the de facto standard for a simple reason: there are a lot of hardware developer that will want to continue to sell hardware. Apple made both hardware and software so it’s a competotir for both hardware and software producer. If the pc market will fade, hardware developer like acer, hp, asus, dell, fujistu, lenovo, toshiba, packard bell etc. etc will produce modern hardware platform. In that case they will not use the IOS they will use something else, like android.
In conclusion I don’t think apple is strong enough to remove from the market all the software producer and hardware producer. They earn a lot selling low price thing at an high price, but it will end soon.

16 neilpost { 10.23.12 at 7:20 am }

Microsoft seem to ‘get’ Post PC is here.

Microsoft don’t get that Metro is basically a Windowless interface destroying the whole historical look, feel, interaction and usability of the **Windows** interface.

Metro-ing up Window’s is a bit dumb.

17 SeeThrough { 10.23.12 at 12:09 pm }

I think that a lot of you guys are just saying thing without thinking about the consequences. Can you really immagine a world without microsoft?
I’m sure you would say ‘yes that would be perfect, only Ipads, Iphones and so on… long live to the Apple!’, but what you are not considering is that only one company in a market means monopoly. Only iPads at the cost of $3000 and super cheap Android tabled that get slow and unusable in less than a year. You don’t realise that the ecosistem NEEDS Microsoft and Google and so on…
I want to give you an example, to the people who never moved from their country: in Switzerland the cost of a all inclusive contract for the mobile phone (calls, SMS and internet) is 160 CHF (=171 USD), the price is so high because the market is led by two big providers who decide the prices.

Not thinking about this aspect is from narrow minded people or, of course, fanboys.

[Competition is great, which is why I lamented Microsoft's monopoly control over PCs in the 90s, when OS innovation crawled to a halt as the company killed off every competitive threat with often illegal tactics.

Apple has ruled MP3 players for over a decade. They didn't get more expensive and less competitive. They got thinner, faster, easier to use, more powerful and cheaper. Apple didn't need to repress competition with illegal conduct to remain the favorite choice. - Dan]

18 samunplugged { 10.23.12 at 12:13 pm }

Well, you’re no Ed Bott! He is more experienced than you.
You are part of that American culture that hates successful companies for one reason or the other. Yes, kill Microsoft, so many others want to kill Google and when you guys are done with that please kill Apple as well – so many developers are pissed with them too. America is the worst place to be a successful company because of all you people who can’t stop bad-mouthing. There are thousands and thousands of engineers working on the Windows platform but yes take away their jobs and kill their careers too. Help your already screwed up economy and short Microsoft shares today itself.

[I'm not recommending Microsoft be killed for being successful. I'm observing that the market is killing Microsoft for not being successful. - Dan]

19 gus2000 { 10.24.12 at 10:19 pm }

The iPad is just a fad and Apple is doomed unless it starts shipping a low-end netbook to compete with the…

oh wait, what’s a “netbook” again? hmmm

20 Mike { 10.25.12 at 11:02 am }

It’s actually amazing how incompetent everyone else looks in comparison to Apple, especially in tablets. But to be fair, Apple had a head start on the competition, who didn’t even imagine that tablets like the iPad would be possible. And certainly were hit by the blindside as the iPad grew an enormous collection of software to install and buy. Not only that, antivirus makers must be crying a river because the iPad makes their antivirus software moot. The only thing they might have to offer is a social engineering tool to help users not tap on those spam links… but the bar has been raised that much higher, and certainly for a lower cost to the consumer (because of the App Store pricing mentality). Microsoft has to do something to try to reclaim its profits, but it’s really too little, too late. They don’t have the volumes they used to, they can’t be a visionary like Steve Jobs or even execute like Tim Cook, and they don’t know how to design user interfaces. It’s just sad, really. They should just develop Office for the iPad and cut their losses on this train wreck and start making some profit on the iPad. But they can’t hear of that, because Bill Gates would have his worst nightmare come true. Office running on an iPad.

21 kdaeseok { 10.27.12 at 8:03 am }

Well,
I’m a Linux user so really don’t care what Windows 8 or OSX animal are about… but Windows still has more than 90% of desktop OS market share- way too early to say that it’s going down.

[Well the usefulness of considering "market share" is dependent upon the definition of "market." Is the PC market limited to desktop OSs, unless the mobile/tablet OS is being sold by Microsoft? Of course those numbers are going to flatter MSFT. If you look at what people are buying to do their computing, when there's choice they go toward Apple. And increasingly, MSFT is losing its ability to limit choice (the BYOB trend). - Dan ]

22 Dude { 10.27.12 at 5:39 pm }

I wish Apple would offer on demand cloud computing power and programs I could use from my iPad or iPhone.

[Well that's what iCloud is, but it's targeted to specific applications. There are lots of other companies that provide "cloud computing power and programs." They are, collectively, the Internet - Dan]

23 Player-16 { 10.29.12 at 7:24 am }

@Mike:
“Microsoft product manager Petr Bobek has confirmed that the software maker is planning to release native iOS and Android versions of Office 2013 next year. Bobek told Czech site IHNED that native apps will be made available from March 2013.”

tech.ihned.cz (Translated via sited press release. the Verge)

24 cheesewiz { 10.29.12 at 7:37 pm }

In a sea crowded with Microsoft-enabled hype-sters, it was a pleasure to finally find someone who has taken the time to layout the factual history and economic facts of life. I continue to work, at the urging of my customers, to get their custom applications off of the Windows environment. This is something of a major shift during the past 5 years or so, when the suggestion to leave Microsoft and Windows was enough to have a customer seek a different contractor.

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