In a Windows world we bought the product. In Google's world we are the product. Judging from market share trends, we apparently don't mind being bought and sold. At least, so long as the price is right. Yes, Apple gets all the news (and profits), but it's Google Android that is set to displace Microsoft Windows by 2016, …
It does exactly what it says on the tin...
... and does it pretty damned well.
The only smart-phone device I've been asked to help decode for a relative is... an Android one. (Running one o the 2.x releases. It's a Samsung Galaxy Advance.) That device's GUI is such a godawful pile of shite, it completely explains why Apple's kit sells so well. It's exactly what's wrong with the old school approach of leaving design entirely to programmers with no imagination, creativity or design talent. Not for nothing were the first few major versions of Android referred to as a nasty iOS knock-off that completely missed the point. And the 2.x releases are still by far the most common.
There is such a thing as "too much choice". Ask any good designer. There are textbooks and such explaining all the science behind it, you know. It's not as if Ive and his team just make this stuff up. You can even get degrees in design. It's a science, not an art. Cognitive Science really does exist.
Reading the endless wanking here about how much "better" [INSERT PRODUCT OR OS HERE] would be if it offered millions of pointless options and features only a tiny, tiny minority would ever bloody use is shocking. This is supposed to be an IT site. You'd think, after nigh-on 15 years of companies like Apple proving the value of good design and integration, some of you would have grokked it by now.
The days when the programmers and nerds who worship solely at the feet of the fallen gods of Technologis and Bulletpointia are over. Just deal with it and shut up, because you're not just wrong. You're not even part of the problem with the IT sector today. You ARE the problem.
Apple never dominated anything.
At least not outside of some graphic design and publishing businesses. They had a brief blip due to putting a proper web browser in a mobile phone and having a shit-ton of advertising done for free by fans in said design & publishing businesses. Now a less vertically-integrated (and mostly free) option is available, surprise surprise it's overwhelmingly popular.
This is a good thing. Apple are worse than Microsoft in some ways. Two peas in a pod, I call 'em.
Re: Apple never dominated anything.
O So Wrong Mr Gale.
They dominate the profits made in the mobile industry. They dominate the NYSE in terms of market cap.
Ignoring those facts in an attempt to pander to your irrational hatred of apple is just sad.
Im not a fanboi but credit where credit is due their approach has propelled them to the top of the mobile heap for longer than anyone except nokia and whilst all good things come to an end - I cant see it happening that quickly.
Re: Apple never dominated anything.
My dislike of Apple is far from irrational. If it was, I wouldn't mention "proper web browser in a phone".
My dislike of Apple comes from their attitude of locking people into an expensive ecosystem, in ways that Microsoft only wish they could emulate. It's been going on for far longer than the iThings, too. Want a new power supply for that G3 power mac? Sure, that'll be a couple of hundred quid please. Never mind that it's a bog standard ATX power supply with the pins changed and a 21V line for some reason. The iThings with the curated app store, no other way other than Apple's of doing anything at all, and every chance a popular app could be emulated by Apple and then banned due to replicating functionality, is just a logical progression for this company.
Ignoring that in an attempt to make me look irrational is, well, just sad.
Re: Apple never dominated anything.
Apple do dominate a couple of things:
1. (and I hate this word) Innovation in user interface, the iPhone was the first committed touch based device and UI. Yes others have copied that since but they didn't come up with a working product until they saw another one. I have stopped counting the amount of MacOS and OSX features Windows and Ubuntu have tried to emulate over the years. They really do make very sophisticated UI where the last word in sophistication is 'SIMPLE'. Making things simple should be the purpose of computers in most people's eyes. Nobody delivers on this like Apple do.
2. Focus on a coherent end user experience. Other organisations have a tendency to focus feature comparisons (including the price). Getting a tick in the box is often missing the point.
All that said they are or will become just as monopolistic in attitude as Microsoft.
by the thought of sexy nuns, I neglected to finish the article...
On a related note, Hitman: Absolution in 21 days!
Does not account for the fanboy
It is probably true that Apple could give away iPhones and iPods and still make a profit from their iTunes store. They choose not to because there is a general perception that something that costs nothing is worth nothing and something that is cheap is worth even less. The battle is not just on dollar price...it is on intangibles like perception. The biggest thing that Winodws 8 has for it currently is the rather natty (or not) ad.
Re: Does not account for the fanboy
I think it's the other way around, old chap. Apple make their money on hardware. The iTunes store has a high turnover, but the profits are small compared to what they make selling iPods, iPhones and iPads.
The problem with the 'give it away for free' model
And even the 'sell it at cost' model, Is that your customers absolutly have to purchase your content and services later to pay for it, which means the hardware is going to have to be locked down solidly if you expect to stay in business, otherwise you'll be reading the news one day to discover that some enterprising bastard has created a cluster out of a million of your free tablets.
I for one prefer the old school 'people get paid when I buy something and it's mine to do with as I like' model.
Re: The problem with the 'give it away for free' model
Upvoted, because I've been downvoted a few times for stating facts.
For "sell it at cost" model, see Playstation, Xbox and Wii. Oh, and Geohotz.
Re: The problem with the 'give it away for free' model
It doesn't have to be locked down if you provide the best buying/usage experience.
Apple need lock-in because while itunes is nicely integrated with your credit card and ipod/phone, it doesn't match the value for money, nor the breadth of products for sale that amazon has. You don't look on itunes for a new computer and it probably isn't the first place for books either.
It is much easier to say, "we have great stuff for you, use this device to get it," than, "We have this great device, please buy whatever we want to sell you through it and only use it for what we want you to."
What an enormous pile of unsupported conjecture.
Statements that would require a bit of support in any essay.
"But owning the desktop is like being the sexiest nun in the convent"
Global PC shipments were 351 million per year in 2010 according to Gartner. And it had been rising year on year up to that point. Has it abruptly nose-dived in the last two years, then? Probably not. So actually owning the desktop is less like "being the sexiest nun in the convent" and more like "being the provider of hundreds of millions of products to enterprise and home use every year." I feel that the original analogy therefore doesn't quite work.
And note that whilst laptops have been increasingly taking away from desktop machines, that's not yet been the same market segment as the tablet market (as tablets haven't yet filled the productivity requirement for most people). So if you want to extend the discussion to laptops, it doesn't really take away there either as MS have the lion's share of that market too. So a nun that is sexier than it's non-nun friend as well, I suppose. Analogies are not an argument. Particularly bad ones.
What else ? This :
"Microsoft put on a good show last week at its Windows 8 launch, but the only thing that really matters is how well Windows performs in mobile device markets."
The only thing? Hardly. MS are establishing an integrated ecosystem both in business and in the home. Success with home gaming and media, e.g. via the Xbox, obviously matters because this provides a big incentive to people to go down the MS route with their mobile devices. Smartglass is really impressive. MS's presence in the corporate market also provides a big enticement to go down the MS route with mobile devices. Everywhere you read "SkyDrive" you can substitute your corporate cloud service if you choose. MS have a really strong business set up for BYOD which is one of the next big things with this. Both of these areas feed in massively to the success of mobile devices. And that ties directly into the success of the Surface and OEM Windows 8 / RT devices too. What the Hell does "only thing that matters is... mobile devices" mean? Desktop, entertainment (games, music, movies), MS Office, services (Azure, Office 365, Sharepoint), server market (Server 2012) all matter enormously to the success of MS and also stimulate the mobile devices market. The "only matters" statement is worthless.
"Given Microsoft's continued reliance on an outdated, licence-based revenue model, Microsoft may have an uphill battle winning in mobile"
Outdated? It makes them over fifteen billion annually. It works and will continue to work for a long time. And what's the replacement models? Software as a service? Okay... Office 365, Azure... MS are doing this already. Or is Matt Assay arguing that the revenue model is outdated by Google's ad-based model. Riiggght. I can see Google out-fitting and supporting a massive IT roll out through ad-supported. Matt talks about selling devices "free hardware") through selling of content. Great - I'll have a five-hundred touchscreen laptops for my company, please. I can't promise that they'll be used to buy many ebooks or games, though. You're alright with that Amazon and Google, yes? Matt's statement shows a staggering lack of contextual awareness.
"And when that happens, Microsoft (and, eventually, Apple) can kiss goodbye to the developer ecosystem critical to winning over users. Developers go where the volume is, and that volume is Google's to lose."
Again, unsupported and lacking in understanding of basic market economics. Sellers (developers in this case) don't go "where the volume is", they go where the sales are. Different things. Matt should look up "market segmentation". There is a massive install base of Windows - their mobile device ecosystem overlaps with their entertainment and corporate presences which is hardly the case with Google and Apple and they have the resource to stay the course for decades to come. MS isn't going anywhere as a market. Even if MS only got 30% of the market, that would be more than sufficient to provide an incentive for developers. Even 10% would.
Vegetarians make up approximately 4% of the UK population. By Matt's logic, supermarkets would not sell specifically vegetarian-marketed food because "they go where the volume is" and yet I see shelves of Quorn, meat substitutes, vegetarian cheese. Garages would not stock parts for porsches. By Matt's logic, Android could never have got off the ground because at the time it appeared, the "volume" was iOS. A market doesn't have to have more than 50% to make it profitable to exploit. If you can see the flaw in any of my examples, then you can see the flaw in Matt's logic. I use the word tentatively.
"Microsoft could pull an Apple and sell a consolidated device like the Surface. I mean, really pull an Apple and dump its hardware partners."
No they couldn't. Doing this would immediately drive their partners to embrace Android and Linux en masse in sheer desperation. MS loves its partners, is tied to them, and quite frankly wants them to do well. That's obvious from their behaviour with the Surface.
"Apple is happy to occupy the premium segment of the market, even as Google's Android takes the mass-market lower-end"
You can buy high-end non-Apple devices. Always have been able to and they sell well enough. And as seen with the Surface, MS can produce something just as high-end as Apple. As to the low-end, MS are happy to compete there too. I have the Lumia 710. Got it for £160 SIM-free and it's even cheaper now. Great litle device and cheaper than many Android devices. And there are still WP7 devices being released so it's not cheap because it's old, it's targetted at this segment.
Almost nothing in this article is actually supported. It's just random statements, usually in contradiction to the actual facts or history. How can the author of this essay be "Vice President of Corporate Strategy". I think he actually just writes these articles in order to pick up clues from all the better informed people who respond. If that's the case, then clever, clever Matt. You can hire me as an actual consultant directly if you like. This post is a freebie.
It is surely only a matter of time until someone has a cross-platform compiler, or at least an appsource converter, then we move on from asking who has the most apps.
Microsoft might even be chasing that goal now.
Re: Cross-platform apps
Obviously not a developer. All these things already exist. There are lots of reasons why they are not much used. Apple banned apps built with them, every platform has a different user experience and a native app out-performs a cross-platform one any day.
Re: Cross-platform apps
I thought that was the intent of HTML5 ...
Apple hae surely already conceded the high-end of the mobile market to Android? As for iPad - again soon to be surpassed by uber-specced Windows 8 tabs? Yes, No?
owning the desktop is like being the sexiest nun in the convent
Ballmer in a wimple?!?!?
That's my fantasy ruined forever.
Re: Surface will FAIL
Obviously a total lack of understanding of the market. Just because *you* don't use it or see it being used doesn't mean it isn't being used.
Given that MS invented the tablet market with Windows XP tablets and invented the smart phone market with Windows Phone 6.5 its a bit difficult to see how they are copying Google and Apple. The fact that those products were too early and not very good doesn't mean they didn't create the segment.
Given how MS build markets over many years, e.g. DOS, Windows, Word, Excel, Office, XBox, etc, none of which were firsts, but are more Last Man Standing, I would think Apple and Google should be worried not the other way around.
I suppose you are too young to remember CP/M, OS/2, VisiCalc, Lotus 1-2-3, WordStar, WordPerfect, Corel Office or all the others that have fallen under the wheels of the MS Juggernaut.
Personally I've been watching this current strategy of PDA (Smart Phone) Tablet and Cloud develop for over a decade. Where did I first see is described? In a video from MS.
The fact that MS are no longer operating under the DOJ consent decree mean that the gloves are off and MS is free to compete again. The last year has seen a huge amount of new MS tech. Seeing how it will develop will be interesting, and I for one won't right off MS until they no longer sit on a huge pile of cash that allows them to do whatever it takes.
Re: Surface will FAIL
Did Wince 6.5 really fail?
I know it wasn't very good, and didn't beat Symbian, but it doesn't really compare to the rest does it?
(Windows 7 not beating Symbian when Nokia were trying really hard to deliver the death blow is what I'd call a proper fail.)
Re: Surface will FAIL
@Edon. The Newton pad (I was a user) was a PDA, not a tablet. You may as well say that a Palm Pilot or Psion was a tablet, if you're going down those lines and they definitely weren't.
Win CE 6.5 was also not just a phone, it runs on many other devices.
As for xbox being a photocopy of the playstation, you may as well complain that they copied the Atari 4bit console from the 80s.
Now, you clearly hate MS, and if you're into hating that's fine, but try to make your arguments coherent and informed.
Re: Surface will FAIL
Being that symbian no longer exists for new production devices who do you think has won.......
I'm buying a surface.
Quite excited to get it actually.
Flame suit on.
Re: I'm buying a surface.
It must be better than being a dimensionless entity, I suppose...
I don't particularly care who 'wins'...
Jim Zemlin: "For many years, I've been predicting that hardware will soon be free, subsidized by service providers who use open source software to build low cost devices optimized for their services."
As long as this trend doesn't filter in to the desktop market and result in locked hardware.
show the readers a pic of the sexiest nun in the convent, pls. I guarantee the article will get 50x more clicks.
Re: Sexiest nun
Business business business
That's where it's at for Microsoft.
Despite the rather sappy consumer focussed Surface adverts - which had me somewhat confused about the direction of Microsoft - it's the business arena they will want to tackle with their mobile OS.
When you tie Office into the mix, fling on detachable keyboards, you have a relatively cheap hybrid device.
Apple and Google are currently targeting the consumer, as Matt points out, there's very little wiggle room in this market.
The way I see it, they could tie-up the business market if they target it right. There's *plenty* of space to be serious in that area. Current tablets are still perceived as being somewhat of a frivolous 'toy' in the workplace, despite the fact they could be exceptionally well suited to so many business sectors.
A serious tablet - forget the consumer targeted frills - a tablet for getting work done, presenting in a boardroom, sharing documents - *that's* where Microsoft *should* go.
Tablets that are easy for IT departments to lock down to only being able to perform core tasks. Security is a *big* issue with mobile computing in the workplace, so that needs to be firmly addressed.
I can't see Microsoft making serious inroads into the consumer space with the Surface - the price is just too high.
Re: Business business business
"I can't see Microsoft making serious inroads into the consumer space with the Surface - the price is just too high."
I really don't think they want to. If that was the plan, they would have made more and would be more bullish about extending the line. The Surface is almost certainly focused on two main goals. The first is to provide an impressive demonstration platform for the new Windows 8 and Windows RT OS. The second is as a pace-maker to the OEMs to get them to raise their game. The real question is not really whether they make inroads into the consumer space with the Surface, but whether they make inroads with Win8 and WinRT in general. And this encompasses not just the Surface at their given price point, but all sorts of other products from Lenovo, Samsung, Acer, Asus, Toshiba... pitched at different prices and with all sorts of different capabilities. It's the biggest thing to shake up the hardware market in years. Looking at designs like Dell's hybrid (with it's weird but cool swivel screen), Samsung's Ativ Smart PC (awesome active digitiser from what I've read), Lenovo's Yoga, the Surface itself, it feels like we're living in the Cambrian era prior to the mass extinctions. A massive array of wildly different lifeforms all competing to see what works and what will take off. If Surface only sells out its first run and they never do a second, MS will probably still be fine like that. Unlike Google with the Chromebook or Amazon's device which subsidize hoping to lock people in to buying more content for a long time afterwards, MS are making a healthy profit on each unit, I should think. Total Surface sales numbers are a small part of how things play out.
"Microsoft could pull an Apple and sell a consolidated device like the Surface. I mean, really pull an Apple and dump its hardware partners"
I thought that's just what they've already done - dump its hardware partners or delivery people as they're known in Redmond. Reason being the ongoing shrinking market. When Microsoft is getting out of its own market - then the writing is truely on the wall. Perhaps Microsofts old hardware 'partners' may consider moving to the Android.
Re: Consolidated Microsoft?
"I thought that's just what they've already done - dump its hardware partners or delivery people as they're known in Redmond"
You may not have noticed all the brand new devices and designs from Lenovo, Toshiba, Dell, Acer, Asus, probably others.You may also not have noticed that MS have produced a quite limited number of Surface devices. Just looking at devices like the Samsung Ativ SmartPC it's obvious that it's been developed in close partnership with MS - you can't roll out a device like that at the start of an OS release without long-term and very active support from the OS producer. MS obviously have not "dumped its hardware partners" nor is it in their interests to do so. Your impression is very much at odds with the facts.
After reading the article and the following discussions, I feel rather depressed. Tech used to be exciting. I'm off to homebrew my Nintendo Wii to cheer myself up.
"Tech used to be exciting. "
It still is. It's just some here are more interested in hating company X or Y to see what cool stuff they are doing.
Tech Is Exciting But Dumb Bloggers Love To Try To Ruin It
The number of people who troll sites just to make dumb comments on how whatever other OS is better or worse is ridiculous, if moderators (on big sites at least) could delete the dumb comments the world would be a smarter place!!
> "Tech used to be exciting. "
The exciting was that better tech arrived and got cheaper over time.
Now there is little appreciable benefit to buying a faster CPU/GPU/disk, for most people, except to run AV faster. We've max'ed out the number of colours we can see on the screen, I don't know of anyone who's considering 128bit cpu's. While a larger-than-27"-screen is possible, it isn't easy to fit on a desk and becomes a bit overwhelming for normal work.
We could get better GPUs for realtime photo-realistic rendering but that isn't needed by most people (at least, not to the point where they want to pay for it).
It would be rather cool to get minority-report style hand-movement recognition in lieu of a large touchscreen for the desktop, but a mouse/keyboard is probably faster and easier. Mouse/keyboard would also cause fewer problems if you're inclined to gesticulate while talking on the phone or have annoying colleagues/children.
Software is incredibly bloated. I downloaded MS' ATI driver the other day - 9MB. ATI's own download came in at 150MB and their "detect hardware" didn't work on an old X1600 system.
Now the excitement is in cheap, less capable things - ARM chips and putting things in new places - phones etc. Even GPS and motion sensors are old hat.
Re: > "Tech used to be exciting. "
"Now there is little appreciable benefit to buying a faster CPU/GPU/disk"
"I don't know of anyone who's considering 128bit cpu's."
Only because it's not hitting the mainstream yet. When it does? Games.
"We could get better GPUs for realtime photo-realistic rendering but that isn't needed by most people (at least, not to the point where they want to pay for it).
Don't know many serious gamers, do you?
I still remember a friend splunking five thousand pounds on a gaming rig. A grand of which was the cooling system. He was running Crysis at full tilt when magazines were saying it was impossible and marking the game down for it.
Don't underestimate the power of shiny.
Re: > "Tech used to be exciting. "
"The exciting was that better tech arrived and got cheaper over time."
Really? To me the excitement has always been to see our species push the bounds of what is possible and the amazement that such things can become commonplace where once they were science-fiction. But you think "better tech" is not arriving and getting cheaper? How much would a device like the iPad cost you ten years ago? What were touch screens like just five years ago? If you don't feel the excitement of progress then you need to wake up.
"Now there is little appreciable benefit to buying a faster CPU/GPU/disk, for most people, except to run AV faster."
What about how they get smaller, using less power, enabling you to do one a phone all day what you couldn't do on a Desktop plugged into the wall just twelve years ago? And what about those other than "most people". Isn't it cool that I can now run Postgres on a system with six cores and 12GB of RAM at home. Isn't it awesome that I can rent a few servers for hosting and modern virtualization technology integrated into the CPUs enables the company at the other end to just press a few buttons and create those instances for me, rather than actually needing a real machine? Leading to massive efficiency gains and far reduced maintenance costs and increased reliability?
"While a larger-than-27"-screen is possible, it isn't easy to fit on a desk and becomes a bit overwhelming for normal work."
Who cares? You can't look at something like the HP Z1 All in One, or the new iMac and not think: "woah". Not if you have any feel for technology or not.
"I don't know of anyone who's considering 128bit cpu's."
There's a lot more to CPU development than the size of the registers. And we're not just talking about CPUs any more. AMD is going down the APU route and these have positive implications for portable devices and cheaper graphics power with better efficiency. I've not much interest in games, but they continue to get more and more amazing with every year.
"We could get better GPUs for realtime photo-realistic rendering but that isn't needed by most people "
I don't think we could, actually. Real time photo-realistic rendering is way beyond current technology. But it is wanted by people - better graphics will be for a long time. GPUs get more and more powerful and games take advantage of that. Again - it's exciting just to watch the pace of development.
"Software is incredibly bloated. I downloaded MS' ATI driver the other day - 9MB. ATI's own download came in at 150MB and their "detect hardware" didn't work on an old X1600 system."
WinRT is customized to the hardware to an impressive degree from what I've seen. Same with WP7. Win8 actually runs faster and tighter than Win7 on my same system. And if you really want lean, run Gentoo or some other compile-your-own Linux distribution. You can strip it to nothing. And if you think download size equates to memory footprint, you're mistaken. A module installed but not loaded into the kernel to run has an almost impercetible difference on the size of the kernel and the running code. Just because you got a 150MB download (which is a tiny fraction of modern storage), doesn't mean 150MB is loaded and running in your system. Also, modern GPUs are massively more sophisticated than those of yore.
"Now the excitement is in cheap, less capable things - ARM chips and putting things in new places - phones etc. Even GPS and motion sensors are old hat."
You are so fucking jaded. Read into this stuff in more depth. Technology is amazing.
"So much of the media's focus is on the battle between Android and Apple's iOS for the heart and soul of the mobile industry"
Which has always been a myth. The number one smartphone platform was Symbian until 2011. And today, there is no battle - Android is dominant, way ahead of anything else.
"we forget the meta-battle between both iOS and Android against yesterday's desktop market, still owned by Windows."
And rightly so. Sure, we love our Android smartphones, but we're not replacing our PCs for phones (including oversized phones that some people call tablets), nor are most other people.
I have been predicting <x> for many years to happen soon...
Does that not mean by definition of "soon" that you were wrong?
I personally think there is nothing wrong with being wrong every now and then, but then i try not to make everyone painfully aware of it...
another piece of Reporting or Research in the "DUH-blindingly obvious category"
Yes. It's a big ask. Nice to see the Monster (Google) get some competition.
"Google's Android takes the mass-market lower-end"
Looking at the wife's Samsung Galaxy S3, should this not read "mass-market higher-end"?
Re: Short Microsoft
Interesting advice. Are you yourself risking your money by shorting MS or is this just advice for other people's money? Because if the former, I think you're rather brave given the continued positive sales of Win7 and general positive feedback and coverage of Win8, RT and WP8. And if you're not willing to risk your money on this, do you think it's good to advise others to do so?
Evidently MS's goal is to step by step phase out win32 from Windows 8 altogether and then lock in applets from MS store. First step has been taken, hide the desktop and get rid of start. Next step will be to restrict the OS to running fewer and fewer win32 applications till only MS certified win32 applications can run. Next will be to change the requirements and price for certification till most competition gives up and starts either building applets or just go bust.
So Win 9 will be even less like win 7, win10 will be a locked system and they then hope to do an Apple on us. Business software will be transformed into applets format, which at 'the right price' a company can buy. With whole new service contracts obviously.
That's how i see it being played out in the MS mind. Whether this succeeds depends on the gullibility of endusers believing that win 8 will be followed by a better win 7. It won't.
Applet is here to stay, ModernUI is here to stay. Aero will be completely scrapped, desktop will be completely scrapped.
Stick with w7, it'll run for years to come.
I categorically reject the "Mobile is All" meme and any articles based upon it.
I've been in computers professionally since 1990 in one form or another. The meme has had many names including convergence, thin client, and cloud computing. It is always about the universal whatchamacallit. It's all horseshit.
There are many markets in computers, and desktop will always be a critical one. Personally I've always found least useful is invariably the HPC with built-in gaming, streaming, and DVD library support mobile phone.
we apparently don't mind being bought and sold
YOU might not mind Gurgle knowing all about you, but do not generalize that to mean that all of us want Paige and Brine to track our every visit, so they can help to blast us with the right ads. I recently searched for the word Google in all the places on my hard drive. You'd be surprised at how many programs and other things there are. What do they do on my computer and how did they get there? I decided to delete them all. No more tracking. Some web sites did not work properly. These are the ones that have a pact with the devil. The devil also claims not to be evil.
Google has a major problem with their strategy...most of their products suck. Aside from Google Maps, Android, and Search they produce garbage. GMail isn't an effective alternative to Outlook and Exchange, Google Docs isn't an effective alternative to Office (or iWork for that matter), Google Drive isn't a good alternative to Dropbox, Sugarsync or even Skydrive.
Google's business model is better if all things are equal. But all things aren't equal. That's where Apple has been able to provide an advantage and Microsoft can as well. Until they bring their product quality up you're just not going to see a true competitor to Microsoft's dominance.
On the question of whether Microsoft will ditch the hardware partners and become an Apple? No, they won't and they shouldn't for two important reasons. People who don't get business believe it's just a question of being both the hardware and software producer to be like Apple. The reality is it's not nearly so simple RIM, Nokia, Song, etc. have all done this and FAILED. Apple's success isn't just about being an integrated company, it's about a particular organizational structure and operational philosophy, as well as significant assets that allow them to do so. Microsoft can't reasonably replicate that, at least not anytime soon and shouldn't try. There's another more important reason though. Microsoft's partners are going to produce hardware with or without Microsoft so if Microsoft abandons them where will they go? They either create another software platform (more competition for Microsoft) or they go to Google and strengthen the Google platform (bad for Microsoft). So it's essential to their survival that they keep partnering with others. Eventually, an open system will win out, it just takes a lot of iteration to get there.
Is selling licenses an obsolete business model? Not so long as there is a lot more value for the license (this is particularly the case for business users), right now in Android there isn't much to be argued in any platform over Android but in other spaces there are still huge advantages others offer so it still makes sense. However, in reality as Ballmer has correctly stated, Microsoft needs to shift to being a devices and services company, which they'll do, probably successfully, not because they've been so adept at it, it's been pretty messy actually, but because the competition at moving in that direction has been so bad!
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