Microsoft changing value chain

I think part of Microsoft DNA is running after Apple in the consumer arena. After copying the window User Interface of the Mac computers 25 years ago, they are currently copying its value chain. I mean Apple integrated value chain. If you think of Microsoft as a software company, you are wrong. It is now a service and device company.

Microsoft value chain

Microsoft value chain

As Apple did they want to control every step of their value chain from content and services to devices.

They have services like skype, skydrive. They aggregate content and provide platforms both software and hardware. And since it is a device maker with Xbox, Surface PCs and tablets, and Mobiles with the recent Nokia acquisition.

What they still miss is some retail presence like apple stores. The danger here for Microsoft is to upset its long standing partnership with PC manufacturers. But can they fight back at Microsoft move in their backyard? The answer seems no. Linux isn’t an alternative in the mass market, neither is Chrome OS from Google or Android. Microsoft has been upset at their tablet attempts with Android. Now PC makers have a few years before Microsoft gets the lead in the PC consumer market. Some are trying to reinvent themselves like Dell who wants to focus on the business segment.

The missing part for Microsoft is Distribution and Retail. Will Microsoft open some flagship store or some corner within existing stores like Darty, Fnac, Saturn, Currys, or PC world ? I bet they will.

Vertical integration seems to be the unstoppable business model, every IT giant is running after including Google and Amazon. Until someone finds a smart and disruptive new business model.

2013 : the moment of truth for Windows

I was invited to a Microsoft event recently and it started very odly. The guy from Microsoft started with a comparison of the cumulative shipments of Android devices and Windows devices. The Guy was chespounding that there were more than 1,5 billion Windows device in use compared with as little as 500 M Android devices.
So the real threat for Microsoft isn’t Apple but Android. And when you look closer and start to do some forecast there is a serious risk for Microsoft to be outnumbered by Android device in not a so distant future.
Here is forecast, I have cooked up aggtregating numbers from different sources.

Android vs Windows shipments forecast (M units)

Android vs Windows shipments forecast (M units)

As there is very little growth in the PC segment, the Windows growth will come from 2 sources : smartphones and tablets.
Next year 2013 will be a truth moment. If Microsoft Windows 8 or if Windows Phone fails, Android devices will outnumber Windows devices and will become the dominent computing platform.

Which Windows to do some word processing ?

Office Home and Student will be bundled for free in every Windows RT tabtop (tablet + laptop). So if you buy a more powerful Windows 8 Intel powered PC you will have to buy it at an average 89€ on most online stores.

> Engadget article

The logic behind this choice is beyond common understanding. On the entry level tabtop running Windows RT you’ll get more software to create content than on a regular laptop running Windows 8.

My understanding of the frontier between the two OS is that with a taptop you do some light work and you consume a lot of Internet and multimedia. On a laptop running Windows 8 you work and produce content with the like of Microsoft Office software.

My view is that the Office giveaway on Windows RT is there to justify the price of the OS in front of Android.

But is it a wise choice or will it upset high end consumer that might start to be upset being milked so obviously on Office software?  Will it create some appetite for Libre Office software?

2012 : the year of the Tablet & PC merge

I was mentioning in some previous posts that the PC industry was colliding with the mobile industry. For every accident one expects a big boom. It will be the case with the launch of Windows 8 next year.

Windows 8 transforms the way we see tablets and computers. There will be no clear frontier between a PC and a tablet anymore. The tablet will be able to change its finger friendly UI into a mouse friendly UI when docked with a mouse and keyboard.

On this video I shot you can see the Metro UI and a switch to the PC legacy UI.

In the past we used to think a machine = a UI = a processor. This paradigm is no longer valid.

OS/UI/processor

Now an OS will be able to run on different chipset architectures (ARM or x86) and to run different UIs depending on the context.

OS/UI/Processor

It is already the case with UBUNTU 11.10 which runs on X86 and ARM.

Toshiba AC100 running Ubuntu 11.10

I really love my Toshiba AC100 running Ubuntu. OK it’s really sluggish due to the lack of RAM (only 500MB) so it’s more or less a mono task computer but never the less it works. For more information on Ubuntu on ARM > Ubuntu Wiki

One can expect next year a revival of the long lasting war between MAC and PC. I expect Apple to merge its MacOS and iOS for Tablet UIs into something new that will combine the 2 product categories. Apple will most probably manage it smoothly to avoid damaging its healthy iPad business as it did in the past managing the transition from iPod to iPhone.

OS UI Processor future

Microsoft which has no presence in the tablet space will be far more aggressive in merging the 2 segments. The unknown factor remains Google. Will Google be able to strengthen its Android value proposition and combine it with Chrome OS?

Why Apple should stop making Macs (but not iMacs)

I had a discussion with the Marketing Director of a tier1 PC manufacturer last Friday. This discussion was around the PC segment of the All-in-one.

I learnt a very interesting fact: apparently Apple is enjoying a huge market share in the All-in-one segment with its iMac range. Today around 70% of the All-in-ones sold are iMacs. Furthermore this segment is growing faster than the PC industry which has a growth rate of around 4% this year (2011) according to most of the analysts.

Hence, the iMac should be in the upper spaces of the BCG matrix, either a cash-cow or a star product.

So it is more the Apple laptop segment which is in a danger zone. But when Apple is investing in software for the iMacs there is no reason the MacBook, or MacAir shouldn’t benefit of it. Especially if the margin level is good.