An often irreverent look at this week's other news ...
No Update on Windows 8 License Sales
Microsoft watchers were eagerly awaiting word of Windows 8 license sales in yesterday’s Microsoft earnings release, either in the initial release or the post-release conference call. But despite flat earnings for the Windows division (excluding the recognition of pre-release upgrade sales), which is unexpectedly good news given how the PC industry is going, no word came. Historically—meaning, back to October 2009—Microsoft has sold a suspiciously even 20 million Windows licenses per month, and the first two months of Windows 8 sales basically mapped to that figure. But it’s been a full quarter since Microsoft announced the last sales figure (60 million units, January 2013) and, well, inquiring minds want to know. My guess is that the PC downturn is going to eventually catch up with Microsoft and that the company will have to eventually release license sales figures that show a cooling off. Maybe we’ll find out at TechEd 2013? Related: "PC Sales Tank Again in Q1 2013"
Microsoft Confirms Smaller Devices Are on the Way, but Not from Microsoft
I exclusively reported that Microsoft was working on an 8" Surface tablet, and more recently The Wall Street Journal claimed the firm would release a 7" Surface. Microsoft didn’t confirm either of these reports during its earnings conference call. But it did say it was working with partners to deliver “small devices powered by Windows” in the coming holiday selling season. But we already knew smaller devices were coming. Why all the secrecy, Microsoft? Related: "Surface Pro vs. Surface RT: An Honest Comparison"
Yes, Virginia, Microsoft Is Bringing the Start Button Back to Windows 8
And it’s going to let you boot to the desktop, bypassing the loathed new Start screen, too. I’ve confirmed these rumors with my own sources, as has my Windows Weekly co-host Mary Jo Foley, so I think we can move this one into the “fact” category, though of course details about how these changes will be implemented remain foggy. I do find it interesting that Microsoft CFO Peter Klein, while not explicitly acknowledging the changes, did oddly admit that the company update to Windows 8—called Windows 8.1 and code-named “Blue”—will include changes guided by “customer feedback.” I’m of two minds regarding this news. On the one hand, I’m glad Microsoft is finally listening to customers, many of whom have been very clear that Windows 8 as currently implemented isn't hugely interesting to them because of its too-radical design change. But on the other hand, what the heck, Microsoft? What took so damned long? The past six years—the Sinofsky regime, basically—are most obviously marked (to me, at least) by the Windows division’s abject disinterest in customer feedback. No, not disinterest. Disdain. And I really do hope that’s changing. This is a black mark that the company, and Windows, will find it hard to recover from.
Google Sells Ads, Delivers Solid Financial Results
Microsoft wasn’t the only tech-related company to deliver better-than-expected quarterly financial results this week: Online advertising giant Google reported profits of $3.35 billion on $12.95 billion in revenues, gains of 16 percent and 22 percent, respectively, year-over-year. And for those who still bristle when I describe this firm as what it really is, make no mistake: The conversation around its quarterly earnings is all about advertising dollars. The average price of Google ads per click dropped 4 percent in the quarter, compared with an 8 percent drop in the previous quarter. But the number of ad clicks rose 20 percent, helping offset any drop-off. Ad “conversions” apparently remained pretty stable. Any of that sound like technology, or some cloud service thing? No? No. And go read the press release yourself. Not a lot in there about Android, Google Apps, or any other product. In fact, those terms don’t appear even once. It’s all about ads. (OK, “Motorola Mobility” is in there. That unit posted an operating loss.)
Wall Street Finally Turns Its Back on Apple
One question I often pose to the Apple acolytes is this: When was the last time the company released a truly innovative product? If you’re being honest, that time was mid-2007, when Apple shipped the first iPhone. Everything it’s done since then has been entirely evolutionary in nature and designed to extend its iOS-based ecosystem to new form factors, new apps, and new services. Smart, yes. Successful, obviously. But not innovative. Not in the slightest. So as Apple’s stock price has rocketed into the stratosphere during this same post-2007 time period, I’ve often been amazed to see mainstream commentators so routinely use the word “innovative” when describing Apple, as if the company had some never-ending bucket of exciting new products to release on a regular basis. Increasingly, however, the world is waking up to the lie of this belief. And although some are still feebly cheering on expected future TVs and smart watches—hooray?—many more are finally waking up. And now that includes Wall Street: Apple’s stock price has been on the wrong end of the rollercoaster drop for the past several months now, falling 44 percent since September from unworldly levels (over $700, somehow) to simply stratospheric levels. (That drop wiped out an incredible $290 billion in value.) At roughly $400 a share, Apple is still in rarefied company. But there is only one way to describe people’s very misguided views of Apple and its products over the past few years. And that’s irrational exuberance.
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