Microsoft has announced plans to get into the hardware business in a serious way with its announced (but not shipping) Surface tablet computers. This would make them a direct competitor to its biggest customers like HP and Dell.
Now Microsoft has raised this as a risk issue in its public filings:
In an annual report that it submitted to the Securities and Exchange Commission on Thursday afternoon, Microsoft finally conceded something that has been rather obvious to anyone with a rudimentary understanding of the personal computer industry and Microsoft’s historical role in it. On page 14 of the document, Microsoft acknowledges that its Surface family of tablet computers could weaken support for Windows among Microsoft’s partners in the PC industry, known as original equipment manufacturers, or OEMs for short.
The company says in the document that “our Surface devices will compete with products made by our OEM partners, which may affect their commitment to our platform.”
Competing against your customers is generally not considered a path to success.
Well, Steve, I think there’s more than one way of looking at it. I think it’s more like we both had this rich neighbor named Xerox and I broke into his house to steal the TV set and found out that you had already stolen it.
– Bill Gates, in response to a claim by Steve Jobs that Windows software was a rip-off of the Mac, as reported in the new book Steve Jobs.
Image via CrunchBase
People aren’t going to buy Windows 8 tablets because they’re just like the PCs they know and love. In fact, if anything, people won’t buy them for that very reason. Microsoft thinks people love their PCs. They don’t. They’ve been chained to them for years. They want to be set free. The iPad allows for that. Tying Windows to their don’t-call-it-post-pc strategy is dangerous for Microsoft. Disdain is starting to outweigh comfort. Further, there are no more windows in this world for chrissakes!
– MG Siegler, from an article noting the huge and continuing move to tablets (i.e., the iPad) and away from the traditional and increasingly hated PC. If nothing else, the trend for Windows PCs points to serious long-term trouble.
Disclosure: I am long AAPL.
Umberto Eco, way back in 1994, penned an essay in which he argued that DOS was equivilent to the Protestant religion, Apple’s OS was Catholic, and Windows was Anglican. The analogy was certainly apt at the time, and perhaps remains so today. Here is an excerpt quoted in The Telegraph:
The fact is that the world is divided between users of the Macintosh computer and users of MS-DOS compatible computers. I am firmly of the opinion that the Macintosh is Catholic and that DOS is Protestant. Indeed, the Macintosh is counterreformist and has been influenced by the “ratio studiorum” of the Jesuits. It is cheerful, friendly, conciliatory, it tells the faithful how they must proceed step by step to reach – if not the Kingdom of Heaven – the moment in which their document is printed. It is catechistic: the essence of revelation is dealt with via simple formulae and sumptuous icons. Everyone has a right to salvation.
DOS is Protestant, or even Calvinistic. It allows free interpretation of scripture, demands difficult personal decisions, imposes a subtle hermeneutics upon the user, and takes for granted the idea that not all can reach salvation. To make the system work you need to interpret the program yourself: a long way from the baroque community of revelers, the user is closed within the loneliness of his own inner torment.
You may object that, with the passage to Windows, the DOS universe has come to resemble more closely the counterreformist tolerance of the Macintosh. It’s true: Windows represents an Anglican-style schism, big ceremonies in the cathedral, but there is always the possibility of a return to DOS to change things in accordance with bizarre decisions…
Robert X. Cringley argues that the real purpose of iCloud is to kill Windows for good. He may have a point.
Both companies [Apple and Google] will be grabbing for data [in the cloud], leaving Microsoft alone to defend a desktop that will soon cease to exist.
And what happens once all our data is in that iCloud, is there any easy way to get it back out? Nope. It’s in there forever and we are captive customers — trapped more completely than Microsoft ever imagined.
Apple and Google will compete like crazy for our data because once they have it we’ll be their customers forever.
Today, the day after Microsoft announced a significant drop in sales of its flagship OS, Microsoft Windows, its stock dropped more than any day in two years. Seems like investors are nervous that iOS (i.e., iPads) and Android tablets (such as they are) are likely to continues to adversely affect Windows sales by shrinking the market for netbooks.
Here is a picture of Steve Ballmer, at CES, demonstrating one of the stunning new Windows tablets set to ship in a few months.
This picture was taken at CES in 2010. Last January. Where are the Windows tablets? Will he wear a different color sweater this year when he shows the supercool new Windows tablets?