What is going on in the mobile world the requires Microsoft to act now? If the rumor mills are churning out real information and not just fairy tales, both Google and Android could be posed for a major attack on the mobile market that could change the scene forever.

What Apple is doing to change the mobile market

You’ve probably already heard that Apple is considering a budget iPhone. It seems more and more likely that this is a go. While we call it a ‘budget’ device, it seems more likely it will be a mid-ranger that aims for a $250-$350 price tag without a contract.

It is also rumored to utilize a new technique that combines plastic with glass fibre, to create a case that is stronger than your typical plastic phone. In other words, they will make plastic seem ‘more premium’ than ever before. The specs are also believed to be pretty solid considering the lower price tag, including the use of a 4-inch screen similar to what you find in the iPhone 5.

This is significant for a number of reasons. First, it means that Apple can now target countries where only a handful of people could previously afford iPhones, such as in China. Up until now, platforms like Windows Phone, Windows Mobile, Symbian and Android have enjoyed success in some of these developing markets largely because iOS couldn’t compete In a big way.

Outside of opening up the market, it also opens up consumer options if the handset comes to major markets like the United States as well.

What Google is doing to change the mobile market

Okay, so you can understand that Apple could be a problem with a new mid-ranger, if the rumors prove true. What about Google?

Google isn’t standing still either, and is hoping to change up the mobile world by releasing the Motorola X Phone. A new rumor claims that the way they are doing this is by creating a customizable cellphone platform through Motorola – which Google happens to own.

What is a customizable cellphone platform? In short, it would allow you to ‘custom order’ your handset by choosing from a range of specifications that fit within your budget. On the low-end, the device would come out to being as cheap as $199 (no contract), but premium features like more internal storage space, more RAM and a faster processor would bring the cost up.

Think of this idea as Google/Motorola doing to the smartphone market what Dell did for the PC market. There are certainly some obstacles to this approach, if it even proves true, but it could very much prove popular.

Remember how quickly the LG Nexus 4 sold out since it sold at low price point and great specs at the same time?

What Microsoft should consider doing

Both Google’s customizable phone hardware platform and Apple’s lower cost iPhone could prove false, I will admit that right away. Still, is Microsoft willing to take that risk?

Now is the time to prep a Surface phone that can arrive sometime around the same timeframe as Google and Apple’s new offerings. In order for this to be a success, it needs to meet a few targets:
1) It needs reasonably higher-end specs.
2) It needs EXCEPTIONAL build quality.
3) It needs to debut with something big, like Windows Phone Blue.
4) It needs to be cost effective. Heck, cheap even.

The last one will be the hardest for Microsoft, but they need to let go of the idea of making money off of hardware or even Windows for the Surface to have any chance at disrupting the market and helping stem off Google and Apple’s latest efforts.

To do this, Microsoft needs to sell at-cost and make up the difference through app sales and the use of its integrated services. Sometimes you have to lose money to make money, just like Microsoft did with the Xbox.

Even if Google and Apple’s ‘rumored’ handsets don’t pan out, or simply don’t prove competitive enough to disrupt anything, that doesn’t mean Microsoft shouldn’t consider such a move. What do you think, would you like to see Microsoft release a high-end Windows Phone 8 device with Nexus 4-like pricing?

In an ironic twist of fate, both Canonical and Google have now taken both of these elements and crafted them into their own projects – and yet many people are buzzing about them.

With Canoncial’s Ubuntu vision, you will have a unified look that scales from devices as small as a a phone to a tablet, and then to a PC. They will all look similarly but there will be minor differences between the UI presented for the phone, tablet and traditional non-touch PC in order to provide an optimal experience. They will all run the same applications and programs though, and are all unified at just about every level and aspect.

On the Google front, we have a touch ultrabook-like device called the ChromeBook Pixel, the first piece of hardware directly built by Google themselves. This sleek $1,300 ChromeBook runs on the web-based Chrome OS and has a touchscreen experience that they are touting as more immersive than anything else out there.

Both of these projects seem to borrow HEAVILY from what we’ve already seen with Windows 8. Yet somehow, both projects have been meet with quite a bit enthusiasm and less drama than Windows 8 and even Windows Phone 8.

What’s the Difference Between Microsoft’s Approach and their rivals?

So what’s going on here, why isn’t Windows 8 receiving the same kind of enthusiasm? Windows 8 and Windows Phone 8 are robust operating systems that share a lot under the hood. Unlike Canonical’s Ubuntu effort though, Windows 8 and Windows Phone 8 integration feels incomplete.

As mentioned in a past article, Microsoft has yet to unify the Windows Phone and Windows 8 marketplaces under one roof. That also means you can’t run Windows Phone apps on your Windows 8 tablets. With Ubuntu, you can run a tablet app at the same time as a phone app, which can snap to the right side of the tablet display.

Then comes the new Modern UI. It is sleek and solid, but again things like odd placement of the shutdown button make it feel a little clunky.

Next, let’s look at the ChromeBook Pixel. How does it differ from ultrabooks running on Windows 8? Actually, it is better. It has the full power of Windows 8, and that means legacy apps alongside a touch display. A lot of the Pixel’s hype is probably just from Google fans and those that like the idea of a high-end cloud device. Still, $1,300 is rather steep and ultimately Windows 8 ultrabooks will probably have a better overall value.

Should Microsoft feel threatened?

Honestly, I don’t believe so. While Windows 8 isn’t perfect, it is an established product (Windows) and is less limited than either Ubuntu or Chrome OS. It has tons of legacy programs and the Modern UI is very useful once you adjust to the changes.

The other reason for why Microsoft shouldn’t worry too much is that many of the “problems” holding Windows 8 back are fixable. If rumors of Windows Blue are to be believed, we will see Windows Phone and Windows come closer together through a unified marketplace and more, soon enough. We will also seem more customization and improvements to the Modern UI.

Microsoft shouldn’t worry about Ubuntu or the Pixel in their current forms, but they should look at them as warning signs. Now is the time for Microsoft to focus on remedying the aspects of their Windows ecosystem that are holding them back, before Pixel or even Ubuntu – or perhaps even a new competitor – shows Microsoft up and beats them to the punch.

What do you think of the Pixel or of Ubuntu’s new tablet/phone/PC unification? What does it mean for Microsoft’s future, if anything?

Interestingly enough, a new survey by Ponomon was issued recently to dive into the topic of brand trust. The survey found that in the top most trusted companies when it comes to protecting their privacy and their personal information, the number one company is American Express. As far as computing and technology is concerned? HP is the highest, and the 2nd overall in the top twenty list.

Considering HP sometimes a bad rep for some of its products but is still a very big name when it comes to selling computers, it is clear that trust must have at least something to do with it.

Now let’s talk about the big boys in tech: Apple, Google and of course Microsoft. Where is Apple and Google on the list? They aren’t. In 2011 Google was number 19, Apple was number 14. Going to data from 2012, they’ve dropped of the top twenty entirely.

Here’s where it gets interesting though. The list goes back to 2006. Microsoft has NEVER been on the top twenty most trusted brands list, until 2012. With anti-trust issues and other problems, it isn’t surprising. What is a bit surprising though is that out of nowhere they are now number 17.

So how is that data gathered? Ponomon polls over 100,000 adults total and asks them to name the companies they trusted most to protect the privacy and personal info. From there they derived 6,704 usable responses and that provided a total of 39,890 positive and negative company ratings.

So what does all of this mean?

Microsoft is more trusted when it comes to privacy then Google or Apple. What does that really mean though and how did things come to this point? Bottom-line, people are getting fed up with Google sharing their data, selling positions in their search engine, and other tactics.

Additionally Google has recently become caught up in anti-trust issues which could affect how people feel about the company trust-wise as well. Apple additionally has come into some trouble in the past when it comes to tracking issues.

Is Microsoft clean here? Probably not, but it certainly isn’t affecting their trust ratings the way it has the competition. So how can Microsoft use that to their advantage when it comes to building up additional customers for its products? They already have to some extent.

Microsoft attacked Google’s data practices several times last year, enticing folks to use their products, including their browser (Internet Explorer) over their competitor’s offering.

Here’s the big question though, how do you feel when it comes to trusting your private information with companies? Would you consider Microsoft worthy of the top 20 position? What about Apple and Google?

With Windows Phone 8, Windows 8 and the Surface, we seem to be looking at a very different Microsoft than we’ve seen in the past.

Microsoft is continuing to push towards a more direct approach that is considerably more “Apple-like” in nature. With Windows 8/RT we see a more controlled UI (Start interface) that only allows one marketplace and limited customization. This isn’t much different from the dynamic seen with OS X and iOS.

Even Microsoft’s store designs are VERY similar to Apple’s approach. The Surface is a sleek, solid looking tablet that again brings Apple to mind.

The problem is that Microsoft isn’t Apple, and it doesn’t need to be. Microsoft built itself up on working closely with hardware vendors and partners. It was never a controlled, one-man effort and that worked for them.

Apple on the other hand, has always preferred an approach where they have their hands directly in everything. They pushed beautiful aesthetics and due to needing to support limited hardware models, were able to create a stable mobile and desktop OS that didn’t have the same problems you find with an OS that is designed for a broad range of computing drivers and hardware.

So why switch to Apple’s model all of a sudden? Microsoft saw the writing on the wall. They realized that the PC wasn’t as significant as it used to be and wanted to find a way to change its image and approach to better reach out into new sectors, including the mobile market.

What was wrong with their old approach?

Microsoft’s older method of allowing a somewhat-open UI and working closely with their partners – not alienating them – wasn’t a bad way to go. Apple found success with a different approach, but that doesn’t mean anything.

Take a look at Google. Google has an open OS, but they control certain elements (like having solid Google tools, including their Google Play store). They do technically own a hardware company but haven’t directly branded anything as “Google” as haven’t given any special priority or attention to Motorola. Google’s Android continues to expand at a rapid pace. Even their Chrome OS is starting to see some growth.

Google is proof that working with partners, and not controlling the hardware game is still a profitable solution. So really, why change?

Fear of Competition?

I personally enjoy Microsoft products and want nothing more than for them to succeed, but you have to wonder if Microsoft is a bit scared of Google and Apple. They see their PC marketshare declining and they feel that hunkering down and “controlling” things might save them.

This is evidenced further in the rumor of Microsoft’s involvement with Dell’s privatization effort. If this rumor is true, Microsoft is planning to pitch in around $2 billion into helping Dell buy “itself back”. In exchange, Microsoft wants more control over Dell’s direction.

Its possible that Microsoft believes that this ownership could keep one of their biggest partners from considering further Linux and Android alternatives going forward. By controlling its own hardware and directly controlling “certain partners” through partial-ownership, Microsoft could be attempting to limit Android’s growth and keep vendors and customers from jumping ship.

The problem though is this could all backfire. Google is continuing to reach out to vendors and make them feel “welcome”. Microsoft is starting to alienate them. Like it or not, Microsoft needs its partners if it wants to continue to grow.

What should Microsoft be doing?

I don’t know what the future will bring for Microsoft, but I personally believe that Microsoft needs to pick a direction and follow it. They don’t need to be Apple, they don’t need to be Google. The problem with their losing PC marketshare wasn’t that their old “partnership approach” was broken. Honestly, it was more that Microsoft had become out of touch when it came to reaching out to consumers. Their products weren’t cool, and people were only buying “if they had to”.

Microsoft has solid products with Windows 8 and Windows Phone 8. They just need to find a way to market their products in a way that reaches out to consumers, while at the same time working tightly with partners not trying to “control them”.

Does that mean that Microsoft shouldn’t be doing the Surface line? Not necessarily. They can have their own hardware, but they need to work closely with their partners and make sure that the Surface isn’t getting “special treatment” that further angers these partners.

Microsoft is at a crucial point. They can go forward and expand into the mobile marketplace or they can continue to slowly fall out of grace.

The next few years are extremely important for Microsoft and will likely shape their future and seal their fate– for better or worse.

Apple had a great Q4 last year.

The company posted a record $13.1b profit on a record $54.5b in revenue, compared to last year’s record of $13.06b profit on $46.33b in revenue.

Google did pretty well.

Google reported earnings for Q4 on January 22. The company’s stock rose 5% after market as the company reported consolidated revenues of $14.4 billion, up approximately 36% year-over-year.

Microsoft just came out with their earnings for Q4 and were surprisingly strong.

Microsoft’s overall revenue for the quarter stood at $21.46 billion, with a net profit of $6.38 billion.

I have been asked what these numbers mean for Microsoft and Windows 8. Well, there are several things I would take away from the stated financials of Apple and Google.

First of all:

Apple and Google mobile devices represent a very clear and present threat to the PC.

Apple (and Google) mobile devices are eating into all types of PC and MacBook sales.

During Apple’s conference call, Tim Cook stated the following:

On iPad in particular, we have the mother of all opportunities here, because the Windows market is much, much larger than the Mac market is, and I think it is clear that it’s already cannibalizing some, and I think there’s a tremendous amount of opportunity there. I’ve said for three years now that I believe the tablet market would be larger than the PC market at some point, and I still believe that. You can see by the growth in tablets and the pressure on PCs that those lines are beginning to converge.

Microsoft and OEM’s are in real trouble here unless they can turn the Windows 8 narrative around. The threats from Apple and Google mobile devices will only continue to grow and Microsoft have to come to the table with a counterpunch

The Microsoft Windows 8 Surface Pro has to be a hit

Based on the tepid response the market has given to Windows RT and the Surface RT, the Surface Pro running Windows 8 has to be a winner. Microsoft have to do everything possible to guarantee that this device

• Works
• Has serious mindshare

Iphone and Android sales are still a huge problem.

iPhone sales were a record 47.8m compared to 37.04m iPhones a year ago and 26.9m iPhones last quarter.

No matter what the papparazzi say about the iPhone 5 being stale and the relative lack of innovation, the device is being gobbled up in HUGE numbers.

In addition, Samsung have made it their mission in life to sell beautiful and powerful Android phones.

Microsoft, HTC, Nokia and all other Windows Phone 8 partners are going to need to do something different to stop the bleeding. If things continue at this pace, Microsoft will continue to struglle and lag behind all the rest of the vendors.

China will be a mobile battlefield.

Apple have stepped up their sales game in China and they are starting to see the fruits of their labor.

According to Tim Cook:

We increased 70 percent from the year-ago quarter. In terms of geographic distribution we saw our highest growth in China. I would characterize it as we’re extremely pleased.

It’s critical that Microsoft find ways to do the same in that territory. There are too many consumers coming online in Asia to be ignored and if an Apple/Google culture takes root, that would be a disaster.

Windows 8 will be too expensive for consumers – Microsoft need to reconsider

Microsoft’s promotional Windows 8 is coming to an end soon and consumers aren’t happy.

I took a poll on my site to see whether people would be willing to pay triple digit upgrade pricing for Windows 8 and the answers are pretty overwhelming.

As of Thursday 1/24/2013, the poll results are:

Would you upgrade to Windows 8 for for $129.99 or $199.99?

• Yes – Great Value – 5%
• Yes – Reluctantly – 8%
• Hell No – Are you nuts? – 25%
• No – Too expensive – 51%
• No – I was never going to upgrade anyway – 8%

84% of poll respondents have said at that price they wouldn’t upgrade ( 8% wouldn’t upgrade for any price). The bottom line is, the software is too expensive and unnecessarily so.

We will have to see what happens in the next couple of quarters but I am pretty sure that 2 quarters from now, Microsoft will reflect a sharp dip in licenses purchased by consumers.

This seems to be a predictable disaster coming but Redmond seem convinced for now that raising the price of Windows 8 makes sense.

To be continued…

Microsoft need to preempt Apple’s attempts to re-invent TV

Here we go again. We know Apple are working on some new way to make watching television a more pleasant experience. Steve Jobs said he thought he had it licked and now Tim Cook is being secretive.

Microsoft need to get to the end zone first for once.

It would be nice just this once to see Redmond do something large and revolutionary that had changed the way the entire world did something. I can dream can’t I?

Having said all that, it’s important to remember that Microsoft is still in the game.

Microsoft’s numbers out today are a good, stiff reminder that the company is still a very rock solid and profitable company. They make a ton of money, they have the Enterprise solidly behind them (for now) and still make very good products (Windows Server 2012, Azure etc).

The competition is really stiff and the pressure is really on for the next 24 months.

I believe that Microsoft have a couple of years left to fight the solid fight with Apple and Google in the mobile space.

If Google and Apple continue to expand at the rate they are and Microsoft is unable to make SUBSTANTIAL gains with Windows 8, Surface or OEM hardware, it becomes difficult to see success in the cards.

It doesn’t mean Microsoft goes away or folds up. It just means the company slowly becomes a niche player and less relevant.

That would be a dark day indeed.

What do you all think? Is Microsoft in trouble despite the solid financials they put up?

Let me know in the comments below.