An often irreverent look at this shorter-than-usual week's other news ...
It’s Wednesday, Right? Right?!
Thanksgiving is this week in the United States, so today is Short Takes day, even though it’s only Wednesday. Penton’s offices are closed Thursday and Friday this week for the holiday, so we’ll return on Monday, but please stay tuned to the SuperSite for Windows, where I’ll be providing daily updates as always.
Microsoft Helps Pirates Steal Windows 8
A report in Venture Beat—since verified by others—claims that Microsoft is helping pirates get Windows 8 Pro for free. (Actually, this publication doesn’t seem to understand that Windows 8 and Windows 8 Pro are two different things, but let’s ignore that for a moment.) This sounds dramatic until you realize that for this trick to work, you must first install Windows 8 Pro, which requires you to have typed in a product key to begin with. So, assuming you can find a pirated Windows 8 Pro product key, you could theoretically install Windows 8 Pro, then grab the Media Center feature pack online—it’s temporarily free—and, thanks to a bug in Microsoft’s activation servers, have your illegal copy of Windows 8 Pro activated, apparently forever. I’ve not verified this procedure, and won’t, but I’m sure Microsoft will work quickly to plug the hole. And, more to the point, if you’re going to pirate Windows 8 Pro, this is only one of many simple ways to get the thing activated. So, again, it sounds dramatic. But these goons already had ways to make this work: This one is just funny because Microsoft is allowing it to happen.
Analysts Souring on Windows 8
Industry analysts are turning on Windows 8 like the feral pack of wolves they are, citing the OS’s launch as “lackluster” and “disappointing.” It’s probably a bit early to say how well Windows 8 is selling, and of course I do agree with the assessment that Microsoft is playing a long game with Windows 8 and setting up its core franchise for the mobile computing future. But what the heck, it’s apparently sport in this country to kick you while you’re down, so let’s see what the clowns are saying this week. “Windows 8 will have a more muted impact than prior [releases],” a Deutsche Bank research noted claimed. “Windows 8 orders are much lower than PC makers originally expected a few months ago,” Topeka Capital Markets noted. And Computerworld, which I believe has a side business of bashing Microsoft, says that “Windows 8 is being run by less than a fifth as many people as ran Windows 7 in the same months before its debut.” (Thanks to CNET’s Brooke Crothers for the quotes.) I think the most important thing to remember is that Microsoft has missed its own internal estimates for Windows 8 sales, and that the software giant blames PC makers for not delivering their promised launch devices on time, and for not having enough product in the market. This actually suggests … wait for it … that Microsoft believes it could have made its own internal numbers, if only PC makers had actually shown up. It’s a tough thing to blame others on your own defeat, but then Microsoft’s past successes in the PC market were largely due to this same crowd, so maybe that’s fair.
HP Says It Was Duped Into Overpaying for Autonomy
Struggling PC maker HP will take an incredible charge of $8.8 billion and a quarterly loss, which it attributes to a “willful, sustained effort” by software maker Autonomy (which HP acquired in October 2011 for $11.1 billion) to inflate Autonomy's financial success. According to HP, Autonomy misrepresented its fiscal strength in an accounting scheme that appears to be straight out of Breaking Bad (minus the drug dealing, presumably). And it has asked the US Securities and Exchange Commission (SEC), Federal Bureau of Investigation (FBI) and the UK Serious Fraud Office to investigate. While shocking, it’s also only one of several major controversies that have enveloped the once proud firm in recent years. And it’s unclear how much drama HP can sustain: The company fired CEO Mark Hurd after he admitted having an affair with a contractor, forced out his replacement Leo Apotheker (who led the acquisition of Autonomy and tried to get HP to exit the PC business), and then hired the controversial Meg Whitman. Former Autonomy CEO Michael Lynch described HP’s allegations as “utterly false.” I assume he made that comment from a place that doesn’t have an extradition agreement with the United States.
Is Best Buy Now Spiraling the Drain, Too?
The last giant electronics retailer in the United States might soon follow in the footsteps of CompUSA and Circuit City: Best Buy reported worse-then-expected quarterly results this week and warned that the holiday selling season could be a bloodbath, too. Worst of all, the firm’s cash flow for the year will be $500 million less than originally expected, and somewhere in the $850 million to $1 billion range. That’s a problem because it means Best Buy might not be able to pay some suppliers, which could lead to less product in stores and even fewer sales, triggering a death spiral for the struggling firm. Best Buy’s core problem is the same one that sunk bookseller Borders: Customers come into the stores to see and test products but then buy them online, wherever they can get the best price. And it’s unclear how you fix that problem, short of demanding that customers check their smartphones at the door. Please don’t make me shop at Wal-Mart.
HTC CEO: Not So Fast, Rumor Mongers
When Apple and HTC settled their mobile industry patent lawsuits last week, the tech blogger goon squad immediately assumed that, in this case, “settlement” meant “HTC is clearly paying Apple on a per-device basis and not vice versa,” and some of the crazier ones estimated/guessed that HTC would therefore pay Apple as much as $8 per Android device it sold as part of this very one-sided settlement. But HTC CEO Peter Chou said this week that these biased media reports are “outrageous” and that the settlement—whose terms are undisclosed—won't impact its fourth-quarter earnings, suggesting that HTC is paying little, if anything, to Apple. “These estimates are baseless and very, very wrong,” he said. “I believe we have a very, very happy settlement and a good ending.” Actually, I’d be surprised if HTC wasn’t on the paying end of this one.
Patent Boss: Patent Wars Mean the System Is Working
Ask anyone who knows anything about technology what they think of the rampant patent lawsuits that are sweeping our industry and, chances are, you’ll hear that the patent system is broken and destroying innovation. It’s a familiar refrain. Unless of course you’re David J. Kappos, the director of the United States Patent and Trademark Office, and the man most personally responsible for this disaster. According to Kappos, who addressed the smartphone patent wars this week in a speech, criticism of the patent system is “flippant rhetoric” because courts have upheld the validity of over 80 percent of contested patents. In other words, the system is working. “It’s both natural and reasonable that in a fast-growing, competitive market, innovators seek to protect their breakthroughs using our patent system,” he said. “The explosion of innovation that we see across consumer electronics hardware and software is a direct reflection of how our patent system wires us for innovation.” Well, there you go.
Listen to Paul. No, Really Listen. Or Watch. Or Both!
I recorded What the Tech with Andrew Zarian on Tuesday as usual, but we’re taking the week off with Windows Weekly because of the Thanksgiving holiday. The new episode of What the Tech is now available on the web, and via iTunes and wherever else quality podcasts are found. You can also find all of my podcast activities on the SuperSite for Windows.
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