I keep hearing this rumor.....
Apparently Microsoft has decided that it's going to try to stab Apple in the back -- and basically everyone else who is making 7" tablets.
By pricing the RT version of Surface at or under $400.
If they do this they'll likely take a loss on the hardware and figure on making something on the software and download sales, and since the unit is "locked" to their application store that might work.
This is going to get very, very interesting if the pricing winds up there. I've heard other rumors that the Windows 8 "Pro" version (Intel based) is slated to price closer to $900, which IMHO is too expensive.
The "Pro" version won't convince me to abandon my laptop, but a 10" tablet for $400 (and especially if it's $300!) with a keyboard just might convince me that I need one of those for the times when all I want to do is carry something small and light to toss a presentation through a projector or grab some notes. And it will do that off the rack as Office is included pre-loaded.
I guess we'll see in another couple of weeks. It's a ballsy move to play "Razors and Blades" with something this expensive, but provided that the "force everyone to go through the store and manage to get sales that way" game works, it might pencil out.
What it's guaranteed to do, however, is disrupt the existing market on the lower end.
Do not be distracted by all the noise over Huawei and their telecommunications gear, along with the screaming coming from their paid lobbyists. There is exactly one issue here.
In new accusations that came as the report was issued Monday, the chairman of the House intelligence committee said the panel has received "numerous" reports of Huawei equipment engaged in suspicious activities, such as shipping U.S. company data to China, a process known as "beaconing." Chairman Mike Rogers (R., Mich.), said the committee would forward its findings, along with other possible legal violations, to the Federal Bureau of Investigation Tuesday.
This is the beginning and end of the discussion.
If this company's equipment has been caught even once shipping data to China except when a Chinese destination was the intended original destination specified by the sender then the game is over and they're guilty.
Period, end of discussion, full-stop and the corporation must be indicted, tried, have their foreign corporate charter stripped and barred from ever selling anything in the United States ever again.
That's the beginning and end of it. There is no way for this to happen by accident. If it is proved that it has in fact happened, even once, that's enough. There is a back door in the code somewhere and it has been used. Period.
Nobody should get a second chance in this case, especially when there is state involvement, and that there is in this case is not disputed.
The above allegation is either true or false. If it is true then let's see the evidence and hang the bastards responsible for espionage.
If it's false then let's see the names of the people making the false allegations and hang them for the false allegations.
This is a trivial matter to document and prove; nothing more complicated than a packet trace is required, and if someone's complained about this happening, they are presumed to have one as that's the only way you will ever see this occur.
If you remember a few days ago a hacking group claimed they had stolen a laptop owned by an FBI agent and it contained a "master list" of Apple UDIDs -- unique device identifiers, many of them with customer information.
It now appears that the FBI was not involved.
That's the good news.
The bad news is that one of the companies that builds applications for Apple products, Blue Toad, appears to be the source of the file.
This points out one of the major issues with devices like the iPhone (and Android for that matter); unique device identifiers are often something that application publishers have as it is used as a means of authentication (e.g. whether you bought the product in question) for their products. This identifying number is then (through credit card or other records) tied to you.
This then make it possible for the application (and its publisher) to, in many cases, know not only who you are but exactly where you are as most phones have GPS chipsets built into them.
And if some nefarious entity (which might be the application publisher itself!) wants to abuse that information there is little -- if anything -- you can at present do about it.
Apple Inc. (AAPL) scored a clear victory in its patent dispute with Samsung Electronics Co. (005930) yesterday, increasing pressure on smartphone makers around the world to create handsets that stand apart from the iPhone and deliver more choices for consumers in a $219.1 billion market.
A jury awarded $1.05 billion in damages yesterday after finding that Samsung infringed six patents for mobile devices, a defeat for Apple’s biggest opponent in smartphones.
But before you go out and buy Apple stock at or near it's all-time high, consider that this decision will embolden different design choices and empower Nokia and, oddly enough, probably help RIMM.
It also opens up a broader discussion that will now take place over software and similar patents. The simply fact of the matter is that "form and function" patents are very difficult to parse in the context of the original patent system's intent, and often serve as little more than cudgels to enforce monopoly behavior. This is reinforced by the "time compression" that technology has brought to the fore; 17 years used to be a reasonable time frame, but today is it in the context of technology? I don't know.
In terms of investable ideas, however, I expect this will embolden Microsoft and it's upcoming Windows 8 release, along with the integration of Surface and Nokia's upcoming handsets. It may also help RIMM's BB10 models due out early next year, and which have now been confirmed "on track" with actual beta models in-hand by the company and shortly to go into test with carriers.
Apple's biggest problem is the reliance on this model to produce outsized margins. It's a good game if you can keep it up, but eventually it fades. The question for investors is "when?", and whether one of the other two upcoming options in the next six to nine months scores a big hit.
The "fanboi" brigade will of course say no, but I'm not in that camp. While I dislike Microsoft's business model with a passion, the fact remains that Win8's integration, if they price things aggressively and use their cash hoarde to take share, a strategy they successfully used with the XBOX in invading what was a market owned by others, they pose a very real threat.
At the same time RIM's BB10, if it has the sort of stability and power management advantages I expect to see come to fruition, are likely to take a chunk on the enterprise side -- perhaps a very large chunk. One thing to keep in mind folks is that while many count RIM out, the browser on their Playbook tablet is the best I've found on a mobile device and the advantages are not subtle. This will translate directly to BB10 on the handset since it's the same code for all intents and purposes, and then on the Microsoft side you of course have the equivalent of IE on Win8.
That's been one of Android's key weaknesses; the Webkit browser has always blown chunks with it being barely in the category of "reasonably usable", and yet neither Google or anyone else has fixed it over multiple iterations.
We live in interesting times.
I find it amusing the lack of historical context that so-called technology writers have these days. One of the shining examples of late is to be found here:
If the Surface tablet is a success — and with its design, specs, price point, and Microsoft’s marketing dollars, you have to assume it will be — then I think we can say goodbye to the OEM PC market. HP and Dell will live on, selling enterprise hardware and support, but their PC divisions will be shut down — or perhaps sold off to Lenovo. Perhaps Lenovo can subsist at the bottom end of the market, or maybe it too will shut up shop.
This could be a very exciting period for PC owners. Microsoft’s tablet is a first-party device with unified software and hardware — just like an iPad, or a MacBook Pro. You won’t have driver or app compatibility with Surface, because they all have exactly the same hardware inside. Devs will be able to make Metro apps that perfectly utilize the hardware — like Android and iOS — and, if we’re lucky, we might even see the rise of Desktop apps, such as Photoshop, that are specially crafted for the Surface’s touchscreen.
Take a look at our deuded author's "bio photo" -- is that a wee-bit much of a Jesus Complex, my friend?
Let's set the wayback machine to the late 1980s, when MCSNet was MCS -- Macro Computer Solutions. The key word here being Computer.
It was a nice little two-man Sub-S corporation, doing installations of, (no surprise) computers. We were one of those grand little companies that took OEM machines and put them into places where IBM had the former "lock."
We had a few secrets up our sleeve, with one of the prime ones being money. That is, it was cheaper to buy our stuff (even with our mark-up) than it was to buy IBM's. We also had a knack for technology (largely mine) and what actually made a difference in the user experience. So, for example, we knew how to sift through the crap made by companies like Tatung and similar (yes, early OEMs ala Compaq) and find the gems -- like, for example, track-caching disk controllers that resulted in actual workload speedups of 100% or more. And finally, being a local company you could pick up the phone and yell at us when something broke and in an hour, during the business day, I'd show up with a replacement for whatever had broken and plop it on your desk.
Oh, and did I mention that we typically pulled all of our new hardware out of the box and ran it for 24 to 48 hours on the bench first (unless you demanded that we install it now) and thus it was damned rare that you'd have to call us to fix things since we pretty-much eliminated infant mortality concerns? Yep.
Now back in the day there was predicted the "Death of OEMs", of course. One of the more-amusing aspects of this was a company called Televideo. They were known for making dumb terminals -- much cheaper versions of what DEC sold in the VT220, for example, (and nicer too if you ask me.) They came out with a line of PCs in the 80286 and 80386 paradigms that were a bit more expensive than the "you build it" white-box OEM versions, but they had two serious advantages over the competition: Build quality and a track-caching disk adapter.
We sold a metric crap-load of them; in fact, we were selling them as fast as we could get them, which wasn't fast enough!
IBM of course tried to prevent this sort of thing with OS/2 and famously Apple has always tried to prevent it with their operating system offerings. Apple has seen a fair bit of success. Microsoft, on the other hand, has not.
Will Surface spell the death of OEMs, turning Microsoft into another Apple? I sincerely doubt it. Microsoft's big draw isn't Windows, it's Office. And yet the reality of the situation is that Office has become more and more insular with less and less value over time, as other alternatives have popped up. Sure, none of them do today what I want, and I'm an Office customer, but I may not always be one.
Never mind that while Microsoft is trying to meld the tablet and laptop with Surface the jury is out on whether they'll succeed. I like the concept, but I'm not sold on the execution and cost as of yet. It's a particularly difficult problem to solve too, given the price-point -- the same argument I have against things like the iPad as a replacement for the laptop.
The simple fact of the matter is that tablet computers, no matter their premise, are not used to create -- they are used to consume. As media consumption devices they're great -- they are lightweight and small, which are their two best attributes. But their storage is questionable, they thus rely on the cloud, which is dangerous (at best) and in a disconnected state (e.g. on an airplane anyone?) they're far less useful than you might expect.
Surface tries to address the lack of a keyboard but whether that will succeed is an open question. The chiclet/soft keyboard may provide keys but it does not provide tactile feedback necessary for touch-typing, and like it or not if you type much (like, for example, this article) that's important. Solving that problem has eluded everyone that has attempted it thus far -- we'll see if Microsoft is different or not.
My expectation is that Surface will change a few minds and move the needle, but it won't kill OEMs. If Microsoft attempts to become an integrated products company (that is, you can only buy the bundle much as you can with Apple) I expect the attempts to break that model with lawsuits and innovation to immediately appear and rise to a deafening crescendo.
Don't count the OEMs out just yet.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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