To Thine Own Self Be True
By Harry McCracken | Friday, September 17, 2010 at 10:06 am
Back in the 1990s, Microsoft was king of the world and Apple seemed to face death. So everyone told Apple that it was obvious it should follow Microsoft’s business strategy and segue from building its own computers into licensing its software to other hardware makers. Apple finally tried the idea, without much success.
Fast forward to this century. Apple seems to be doing rather well, and Microsoft–though still crazily successful–is a company whose products and business models can feel like part of tech’s past rather than its future. And so everyone is telling Microsoft that it should follow Apple’s lead and sell integrated software-hardware products in certain product categories rather than licensing its code to other companies.
Sometimes, Microsoft listens. Its Zunes have been decent products, but haven’t gone anywhere. The Kin was a disaster. And now Jeanette Borzo of the Wall Street Journal is quoting a Microsoft executive as saying that the company has no plans to sell any more phones under its own name. That doesn’t mean that there won’t be any other Microsoft phones, ever, or that the company won’t try to do everything itself in other categories. But it does sound like the folks in Redmond intend to focus on successfully licensing Windows Phone 7 rather than competing with their phone-manufacturing customers.
Microsoft does have one major software/hardware hit to its name, but it’s the Xbox 360, a product in an Apple-free category. When the company tries to channel Apple, it doesn’t work. And Apple, in the second Steve Jobs era, is smart enough to avoid channeling Microsoft.
Maybe the lesson here is that it’s easier to triumph by sticking to your core competencies than by pretending to be something you aren’t?
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September 17th, 2010 at 10:25 am
You forgot the excellent microsoft lines of keyboards, mice, and webcams, Harry.
Nitpicking over, I personally believe that even if Microsoft does not want to build its own devices or bran as such, they should commission reference designs to be built that embody their vision for that category, especially if it is a new category, or if there is an entrenched or iconic market leader.
They can then raffle off the design or concept to favored partners w/ proceeds going to charity or something.
Their problem, as I see it, is that their ODMs are bottom-feeders, for whom great design is alien.
September 17th, 2010 at 10:34 am
Microsoft does make some nice peripherals; I was thinking of hardware with an on-device software interface, such as PCs, consoles, phones, MP3 players, etc.
–Harry
September 17th, 2010 at 10:43 am
I knew what you meant, I was just giving you a hard time.
Still though, don't you feel that if for example, microsoft had created a reference hardware design for the 'Origami' UMPC, it might have fared better?
September 17th, 2010 at 10:27 am
You noted that it looks like Microsoft intends to "focus on successfully licensing Windows Phone 7."
I can't grasp what that would look like.
Unlike an operating system's higher licensing tag, mobile licenses are sold to OEM's for something like $10. So, if Windows Phone 7 is successful and sells as many units as, say the iPhone, that would be something like 40 million a year.
Well, that translates into $400 million a year. Certainly not chump change, but is that really a successful platform?
September 17th, 2010 at 10:33 am
Good point. I don't mean to say that Microsoft can or should apply the exact model that made it billions on the desktop to phones, just that pretending to be Apple isn't a viable strategy. Google is pursuing an interesting reinvention of the old Microsoft strategy–give away the OS for free in order to leverage future advantages from being everywhere. That strikes me as being closer to a logical path for Microsoft.
–Harry
September 17th, 2010 at 5:51 pm
Microsoft's magic seems to be in software and online services. The Live suite, Windows, and Office prove this. These are the core income sources for Microsoft.
Like mentioned in the article, any time they try a hardware-software integrated product, it winds up being mediocre at best; with the exception of the Xbox. The magic behind the Xbox was porting DirectX to a console and adding some more functionality to it outside of playing games (to compete with the PS2). Live just made it better! Oddly enough Apple did the Microsoft thing with game consoles: http://en.wikipedia.org/wiki/Apple_Pippin
Since this is where the magic is, I think Microsoft should just stick to licensing software and those few consumer products that seemed to work. Catering to enterprises and corporations will net you more money in the end anyway, and a rather large portion of software cost consists of R&D and intellectual property.