

Microsoft’s Long, Slow Decline - tumult
http://daringfireball.net/2009/07/microsofts_long_slow_decline

======
mrshoe
I think Gruber makes a lot of great points here and I agree with most of what
he says. However, I think he's missing one important point.

Microsoft doesn't think "it is sitting pretty because Best Buy has a 17-inch
Dell for $650." I can assure you that internal talks at Microsoft include very
worried discussions about how they're going to deal with Apple's quickly
growing market share.

Microsoft's response to "Macs are better" is "PCs are cheaper", not because
they think more PCs will sell because of these ads, per se, but because _they
want computers to be cheaper_. They want to frame the buying decision in terms
of price so they can drive prices down further. Oddly enough, this kind of
worked. Apple lowered their prices.

As Joel Spolsky says, "Smart companies try to commoditize their products'
complements... Microsoft's goal was to commoditize the PC market."
(<http://www.joelonsoftware.com/articles/StrategyLetterV.html>)

Microsoft does not think that it's OK to be inferior to Apple as long as
they're cheaper. They just really really want computers to be cheaper. They
always have. That's how they've made billions of dollars over the years. They
tie the success of their software business directly to falling prices in the
computer hardware industry. If they see any hint of that trend reversing
(rising prices in hardware), they're going to fight it tooth and nail.

I think what they really need to understand is that the race to the bottom in
the computer hardware market is generally over. We've arrived at (or near) the
bottom. People can afford just about as many computers as they could possibly
want now. If they want to further commoditize the personal computer, they
should be doing what Google is doing and writing a stripped-down OS that runs
on much weaker hardware but relies on the web for processing power. Insisting
on machines that are both cheaper and more powerful than the PCs of yesteryear
has reached the point of diminishing returns.

~~~
nopassrecover
Excellent points about commoditisation. I don't think Microsoft wants Macs to
be cheaper (though they still probably see increases in windows sales to mac
users if there is more money left over) but they do want this to be a price
argument because right now that's where they win.

I think Microsoft should do two things:

1\. Push Windows 7 as superior. In my experience and that of others who have
used it, so far it really is. (NB: The people that have used it were not die-
hard fans either way, so naturally there will be Mac fans who disagree but
this isn't the point).

2\. Offer a Mac-Only version of Windows at a cheaper price to get more windows
installs on mac (price of Windows OS for someone using it as a second OS is
quite prohibitive).

~~~
jwhitlark
I think the main problem for MS is that while Apple makes a premium product,
and is oriented around consistently turning out products that deserve their
reputation, MS is not. Lose the perception that running Windows is Inevitable,
and they don't have to turn out good products just once in a while, but almost
every time.

When you add Linux snapping at their heels with a free desktop, I think
they've got real problems. Especially when Shuttleworth is calling on Linux
developers to make something prettier than OSX. They won't necessarily
succeed, (although I hope we do), but simply playing in the space greatly
complicates Microsoft's issues.

~~~
nopassrecover
Yeah I think Windows 7 is a chance for MS to push premium and take down the
"big bad company" image a notch (as they've done with ASP.NET MVC by
interacting with the community and including well known developer figures in
the project).

I'm not sure Linux will ever pose a serious threat to the "home-user" market -
even developers I know tend to agree that Linux has never taken user-
interaction seriously. It might be prettier these days but that isn't the
concern, it's genuine "getting things working" and "using this day by day"
that is the problem. Most Linux users live by the terminal but home users
moved to the GUI a long time ago and aren't going back.

~~~
rubinelli
Linux will continue to steadily grow among home users if Windows 7 doesn't
provide better security than Vista. People do get tired of reformatting their
(or their relatives') machines every 4-6 months to get rid of all the sticky
malware that managed to get past their antivirus, even though said antivirus
has been eating large chunks of their memory and CPU time.

~~~
likpok
Vista doesn't have nearly the security problems of the XP and before systems.
Things like not running as root and integrity levels changed the security
landscape. In addition, I believe that in between XP and Vista they rewrote
much of the internal code to be more secure.

------
tumult
Normally, I wouldn't submit something with what I might consider to be an
inflammatory title, but I think John Gruber raises some interesting points on
Microsoft's current situation. They're a huge company with products which
register on my likability meter from "this is awesome" to "what is this crap?"

It will be interesting to see what happens with Windows 7. It's a good chance
for them to turn around the bad image that became associated with Vista. This
doesn't necessarily need any technical bearing.

Windows Mobile, to me, seems like a pretty dead platform. I've gone through a
couple of WM phones and I have no intention of going back, either as a
developer or a user.

~~~
tjmc
My personal prediction is that Windows 7 will be a big hit for Microsoft. I
installed the RC on a 3yo media PC with 1GB RAM and it’s really been quite
good – it found all the hardware including slightly obscure things like dual
tv tuners and an IR receiver on install. The only thing it missed was the
graphics card driver but it found it on the first update. The digital tv
playback is smoother than XP and it “just works” as a PVR – you can fully
control it with a remote from across the room. It plays Xvid and can burn DVDs
out of the box.

Gruber’s right that MS have lost the enthusiasts and yes, they’re now a bit
player at the top end of the market. But then again, so is Toyota. People who
use Windows are like people who have a car to get from A to B. MS have always
been about the mass market and that’s not changing. There’s still substantial
advantages in being the dominant platform – especially as the default business
desktop. I think Windows 7 is good enough that the great, unwashed hoards will
switch from XP in surprising numbers. But we’ll see…

~~~
dememarc
Very good point to parallel MS to Toyota. However, unlike MS, Toyota has
Lexus, a brand that does very well with consumers that are willing to pay a
premium for a premium experience. MS has no such offering.

(see also VW/Audi, Nissan/Infiniti, Honda/Acura, etc)

------
brisance
Microsoft is making the same mistake that Creative made with respect to the
iPod as an MP3 player. They are still stuck in the "hard disk size, amount of
RAM" rut. When was the last time you bought a computer (other than for gaming)
that really required that extra 0.2 GHz?

Even then, MSFT makes an disingenuous argument since they make no PC hardware.
So it is all spin.

People are buying solutions, not hardware. This is partly why the iPhone is so
successful even though there are literally hundreds of cheaper phones on the
market.

~~~
quantumhobbit
Agreed. Comparing something like a laptop on just memory and hard drive is
ignoring a huge list of other aspects which affect the quality of the user
experience such as battery life, keyboard and trackpad, and heat(Apple is just
as bad here if not worse than some).

To extend the GM analogy, it is like comparing sports cars based on horsepower
alone. You can get an American muscle car with a ton of power cheaply but it
will handle like crap or you can get a more expensive sports car with less
power but is actually pleasant to drive.

------
joechung
If you ignore the global economy, the magnitude of the sub-$1000 PC market
relative to the $1000+ PC market, and the fact that you can run Windows on an
Apple PC, then this article makes sense. Otherwise...

~~~
iamelgringo
The article makes even more sense if you ignore hardware geeks, PC gaming
enthusiasts and case modders. I don't see tons of teenage gamers lining up to
buy new motherboards and 3 PCIx graphics cards for their Mac Pro.

ref: <http://www.anandtech.com/> <http://www.tomshardware.com/us/#redir>
<http://www.overclockersclub.com/>
[http://images.google.com/images?client=opera&rls=en&...](http://images.google.com/images?client=opera&rls=en&q=case+mods&sourceid=opera&oe=utf-8&um=1&ie=UTF-8&ei=hWNySsf5BIy0sgOyiKDICA&sa=X&oi=image_result_group&ct=title&resnum=4)

~~~
jonny_noog
I used to be a case modder, put together my last three PCs myself. Got sick of
it. Now I have a Mac Pro.

~~~
PStamatiou
I'm exactly the same way as jonny_noog here. I grew up case modding, going to
lan parties, winning fastest-pc-build competitions and all of that. Then I
went to college and got a Mac mini a year into it after seeing some friends
with Macs. then I got a Macbook, then an iMac, then a MBP, then the new MBP,
then the MB Air, then the new MBP... now I'm a big Mac guy.

~~~
_pi
So you fell into the social pressure aspect of Apple's Marketing technique? I
thought of getting a Mac for college, however for the price it doesn't offer
much over a Lenovo or a Dell. You get alot of nice touches, but those things
I'd never use. Multi-touch trackpad? Unibody? There are products out there
that do those things much better, such as tablets and toughbooks. Mac is like
a DND bard, jack of all trades master of none, and not even better than a
master of one. They're nice, they're shiny, but you want toughness? Get a
toughbook. You want battery life? Get a Lenovo t400. You want something light
that you can surf the web with? Netbook.

If you want to impress your friends about how much better your purchase is,
then get a Mac.

~~~
PStamatiou
"They're nice, they're shiny, but you want toughness? Get a toughbook. You
want battery life? Get a Lenovo t400. You want something light that you can
surf the web with? Netbook."

At the time I wanted none of those.. I just wanted something small that could
run OS X (this was before OS x86 and hackintosh obviously) as I thought it was
a cool OS and had previously only used OS8-9 and not much OS X in high school.
As for "social pressure aspect of Apple's Marketing technique", I guess you
could pile me into that group but in a different way. Most of my friends were
hardcore linux types, and some just happened to have Macs as their weapon of
choice.

I could go on, but I don't feel like starting a huge Mac v PC war again. I'm
happy with my decision and that's all I care about. :) As for why I use a Mac
now in 2009, well I do lots of Rails and design stuff and there are just so
many great, small Mac apps that help out with this.

~~~
_pi
I don't get hardcore linux types who go for Mac. Mac ports is pretty bad for
porting things over, and there's problems with version handling. There are
some nightmare development stories on the Mac such that programs don't compile
because it's impossible to easily get specific dependencies.

Mac isn't Linux with a "more polished" interface, it's a closed system with
the stability of *NIX but none of the benefits of decent package management,
and a less developed system interface.

~~~
jonny_noog
Not sure how hardcore I am, but I would definitely consider myself a "linux
type". I take your point about the lack of a decent package management system.
I run Debian on my ThinkPad so I know what a good package management system
looks like. I also take your point about Macs being a more closed system.

But for me, being a web developer who doesn't do much in the way of kernel
hacking or other deeper system type work, OS X really is effectively Linux (or
Unix as the case may be) with a more polished interface. I would never have
considered getting a Mac if OS X was not based on Unix.

I am much happier with a combination of OS X on my desktop (used for work plus
multimedia entertainment) and Debian on my laptop (used for work) than I was
with Windows on my desktop and Debian on my laptop.

~~~
_pi
The problem for me is that OSX isn't linux. As a power user, I do some pretty
in-depth stuff that requires the proc file system. Not only that but Mac
drivers behave differently than linux ones in terms of the Unix philosophy.
And Mac doesn't support more hardware than Linux even though it's a commercial
operating system.

Example: I have a Hauppage HVR 1600 TV tuner with on board MPEG-TS transcoder.
What linux allows me to do using the character device /dev/video0 either
through netcat or through SSH stream the device across the network to another
computer, effectively creating an MPEG stream of live TV. I can change
channels using V4L2 architecture.

Thus when I'm in college my friends can record shows through my computer
through the network onto their laptops (obviously the same channel at a time)
simply by tapping the stream.

And because Mac doesn't have a great package management system you probably
spend more time than you should upgrading libraries you use (depending on your
setup obviously, I've never used Rails so I don't know what goes into that but
PHP could be a bear).

Personally I like the expose feature of Mac and I was upset that it took
either retarded compiz or a half broken hack to get it working on Linux. Then
kwin came along, which does all of what finder does and more. And I will give
Mac props for inventing that because it's one of the most useful window
management techniques (I find taskbars outdated), but when I look at their
system I can see that while I get stable polish, I get overall less features,
turning it off, then turning it on kills plasma rendering properly).

But in terms of raw features that are really nice and extensible albeit
crashy, commercial OSes, Mac included are always behind. (I mean seriously no
one has addressed dependencies and dynamic library management like Linux has.)

~~~
jonny_noog
I completely understand where you're coming from and totally agree that for
the kind of stuff you're talking about, Linux is the definitely the go.

Open source web dev tools are great on the Mac though. I get by just fine
using Ruby Gems for all my Ruby/Rails package management needs (the Ruby Gems
system actually makes sense on OS X where as on Debian, it just felt redundant
at best and annoying at worst) and I prefer to compile Ruby, MySQL, PHP, Git
etc. myself in /usr/local anyway. I feel like I've got more control of where
everything goes that way. When it comes to using these kinds of open source
tools, I very much prefer to have a Unix style terminal to work in rather than
what passes for a terminal in Windows.

I'll never totally give up Debian for OS X, but if it's a choice between
Windows and OS X for my general work/entertainment machine, I'll choose OS X.

------
adamhowell
The 91% retail computers number is crazy. My guess is it has to do with
several different factors, a few of which might be:

* Circuit City going under

* Best Buy now stocking Apple merchandise

* Wal-mart going almost entirely sub-$1000

* No one wanting a computer that comes with Vista (even my Mom bought a laptop the other day b/c it was $400 and came w/ XP)

* More Apple stores, meaning more free tech support (which is why Microsoft's going down that route soon)

~~~
Kadin
I think it's probably due in large part to near-total destruction of the
$1000-plus PC market. It's not that Apple has really _gained_ there as much as
the numbers would suggest, it's just that they've managed to hold on and get
people to continue shelling out, while other computer manufacturers have been
forced into a price war.

I suspect, if you were to go into Best Buy or Walmart, you would find only a
handful of non-Apple PCs for $1k+, if any at all.

Apple is doing well in the high end because they've successfully resisted
commoditization in a way that none of the other manufacturers have. (Sony has
tried hard, but they're not half as cool as they want to be in the eyes of the
average buyer.) Toughbooks are probably the only other brand that stick out as
demanding a premium and being likely to get it, but they're a specialty
product.

~~~
potatolicious
This is something I've been saying all along - and Sony too. Last year someone
at Sony lambasted the Eee PC, saying that netbooks will destroy the industry
by causing a "race to the bottom". People fought against that idea - and many
loudly proclaimed Sony to be a sore loser and sells overpriced crap.

Quote here:

<http://news.cnet.com/8301-10784_3-9879798-7.html>

And then it turns out they were right. The netbook has absolutely _gutted_ the
over-$1000 PC market to the point where Apple is now the only real player.
Margins are thinner than ever and I would not be surprised if manufacturers
start keeling over from selling too many netbooks.

I mean, that's what happens when you give up the business of selling kobe beef
and get into the business of selling grade-D ground beef...

~~~
netsp
In a competitive market like this, it is not really about companies 'getting
into the business of selling...' Consumers are buying it.

------
jwhitlark
"That’s the business Wal-Mart wants to be in — selling a zillion cheap low-
margin items and turning a profit on volume. That’s not the business Microsoft
is in."

It should be noted that one of Wal-Mart's greatest advantages is that it
manages it's resources more efficiently than it's competitors. Being always
willing to risk that you can do a satisfactory job cheaper than anyone else is
a great attitude for a company that can out innovate its opponents. I can't
think of MS in those terms with a straight face.

~~~
jtfc
Apple (and Steve Jobs) has never tried to market anything in it's product line
to all consumers, they concentrate on the mid-high and highend market.

I don't want to sounds like a snob, I use macs for 20 years (I am a designer)
and I never go to Wal-Mart, but we have a Prius. Low price is never the first
priority for my family to choice any kind of product, and we try to not
purchase anything influence by marketing/advertising.

I do use VMWare with XP on my mac. Honestly I was very happy when Apple
switched to Intel so I never have to buy those not so well make hardware
again.

There will always be people that shop everything at Walmart, and people shop
at target/traderjoe, and another group shop only at Wholefood. We all
different but I am happy that we have different choice.

Can you imagine if Apple died in the 90s and nongeek like me now have to
choice between Windows and Linux?

------
fauigerzigerk
So when was Microsoft successfully competing in the market of fashionable
consumer gadgets?

If you're looking for Microsoft's decline you must look at the sectors they
actually dominate. And considering this whole question by way of intense
californian navel gazing is not going to predict anything in a world where
100% of growth happens in Asia.

Personally I don't get the kind of collective, almost supremacist, enthusiasm
for the quality of Apple products. I've been using some Apple products pretty
intensively (MacBook/MacOS X, iPod, Xcode) and I remain largely unconvinced.

I love computing. I love what I can make computers do in terms of analysing
and transforming data. But I don't like computers.

So when the first thing Apple tells me on their homepage is that some hardware
thingy is now "unibody" they get blank stares from me. I guess people are just
very different in that regard.

------
jsz0
Microsoft is getting its first taste of reality for a variety of different
reasons. I don't think there's any evidence to suggest they are in for a slow
bell curve style decline. Their business model will change of course but
probably won't decline much or at all. Eventually the economy will recover and
enterprise PC sales will pickup. On the consumer side it's probably inevitable
that Windows revenue will continue to shrink as consumers move more of their
computing online and to mobile devices.

The one area they can build on is the Xbox platform as a general purpose set
top platform that might serve some of the same functions as a traditional
desktop PC. For example: It could be a file server, print server, home
automation controller, media store, shopping front end, etc, etc. No other
company is in a good position to control the living room. Apple isn't
interested, Sony is patiently waiting to die, and Nintendo is firmly a gaming
company completely incapable of making a general purpose platform. Most
importantly the Xbox is one of the only new Microsoft products in the last
decade that has really caught on with consumers. Eventually they can probably
build on the success of the Xbox platform into mobile devices.

------
pbsteve70
Funny how this devolves into Apple v. Mac. Apple has gained share but I don't
believe Apple has much to do with MS' decline. The real cause is the
internet... it has slowly busting MS' monopoly power. It might have been
inevitable but I think MS helped cause it. Way back in the 90s, every time MS
saw a profitable Windows developer, they saw an opportunity to grow their own
software business. They would even advise Venture Funds not to invest in
certain areas. (Guess what.. venture investors want to make money, not battle
MS.)

Funding and innovation for desktop development (read: Windows development)
plummeted. Sure existing companies continued with their product lines and
hobbyists built a huge shareware market. Meanwhile MS got fat dominating the
market for software on their own platform, and with the increased PC sales for
the ultimate killer app--the internet. They looked brilliant.

BUT... innovation didn't die. It moved to the web. And today, while most
computers still run Windows, the dominant platform is NOT windows, it's the
internet itself. Cloud computing has some real advantages but real
disadvantages as well. But one of the advantages is that it was a workaround
for the 80 billion pound gorilla, when every business analysis started with:
Does this compete with MS?

Ironically, I see hints of Apple repeating the same mistake in its iphone... a
platform that really has the legs to dominate in a way the mac never has.
Financially and short term they're doing everything right and making billions.
And they'll grow much more, just like MS in the 90s. But their whole app
store/review approach is hostile to developers. In fact they're building a
market that resembles the modern Windows market--only its 99c instead of
shareware. Professional developers and capital and innovation is going away.
The PageMakers and Photoshops of this stage of computing are going to happen
on another platform. And Apple, like MS, a huge successful company with a
strong embedded culture is unlikely to see the cause and effect and change its
ways..

In the iphones case it won't take 15 years. But it will take a while. The
iphone's current momentum is daunting. However, when you're a platform, your
most valuable long term asset is your developers. But when your platform is a
runaway success it appears to be too tempting to abuse those developers for
short term gain. The absurdity of the Apple case is that Apple would seemingly
make more money if they loosened up on the app restrictions. MS at least made
serious money putting its developers out of business...

~~~
kgelner
I write iPhone applications for a living.

I don't see the App Store process as being developer hostile, at all. Yes
there are a few specific areas where it's basically a hostile environment for
development. But there is a far wider range of categories where the space is
wide open. And that space is wider still now that Apple is finally letting
people go hog wild with live video overlays in 3.1 (augmented reality stuff).
You only see the contractions, but it's more than offset by expansion... and
the contractions we do see, are bound to be temporary if other phones end up
having compelling things the iPhone does not because of them (and the
inevitable loss of AT&T exclusivity). That's far sooner than the 15 years you
give them...

~~~
pbsteve70
I'm actually a long time developer trying to write iphone apps for a living.
In app review purgatory for a simple app that can't possibly offend or harm
any one (including Apple, AT&T or the user's batteries). I'm glad you've found
your green fields. I'm having to play the game of "what do I need to do like
xxx who got approved so maybe I can get approved?" instead of "what is best
for the user?" I know from the web that I'm not alone. I'll also admit that
I'm biased... the last 35 days in app review, while the product closest in
functionality has 4 updates approved, has been emotional hell for this
once=lifetime-apple-fanboy. If Apple is only abusing me, obviously, it will
not hurt them. But I stand by my point that successful platforms that take
their developers for granted will one day regret it.

------
lamnk
_"Even without turning the machines on, anyone can see the difference in
design and build quality. In fact, you don’t even need eyes — just pick them
up and see which one squeaks. Apple is selling more MacBooks every quarter."_

Give me a break ... Design ? Yes. Build quality ? Hardly. The Macbook (not
pro) is a plastic toy. Its quality is just the same as of those Dell's
Inspirons. The Macbook Pro unibody may made a difference in build quality, but
definitely not the Macbook.

~~~
lg
A few months ago I spilled a full mug of coffee all over my white macbook
keyboard (no cream or sugar, tho). I didn't notice I'd knocked the mug over
(it was behind me) but after a few seconds the monitor went black and the
light on the power cord died. After a minute or so of me dabbing at it with a
tissue like an idiot, my coworker told me to take out the battery; I picked it
up and coffee spilled out the battery bay. But I took it out and set the
machine on my desk to dry over the weekend.

Monday I came in, put in the battery, turned it on, and everything worked
fine. And I mean everything, even the CD drive. I'm typing on it now. For
comparison, a guy I know had the same thing happened to his thinkpad with a
cup of plain water, and it just died.

~~~
mcarlin
I have a Macbook, and I love it to death, but I also know a guy who had this
happen to his thinkpad, and it was actually fine. It turned out the keyboard
was hermetically sealed from the rest of the machine, and it had drain holes
through the middle of the laptop. He let the water drain, let the whole thing
dry, and turned it back on, and it was in perfect shape.

------
ajg1977
Hey guess what - I'm one of those 91% consumers who bought an Apple computer
(a Macbook pro to be precise) this year. Now, guess what OS I'm running? Not
OSX that's for sure.

I'm also not really sure what DF's aim is here beyond recycling the favorite
talking points of Apple fans.

Vista sucks - check. Windows 7 is a do-over - check Consumers love Apple -
check Mac's can run Windows - check Laptop hunter Ads are lame - check PC's
are $700 pieces of crap - check

There's nothing really new here. Just some viewpoints with questionable
objectivity while conveniently ignoring the fact that a) The vast majority of
computers sold do not fall into the "$1000+ at retail" category and b) The
majority of users are perfectly happy with both Windows and their sub $1000
machines.

~~~
madars
> PC's are $700 pieces of crap - check

Ever tried a ThinkPad? The only thing ThinkPad's haven't got, I wish they had
is MagSafe.

~~~
blasdel
The Thinkpads that don't suck tend to cost as much or more than Apple laptops.

~~~
vetinari
Not really true, in my corner of woods (EU), top of line T400 (LED display,
P9500, hybrid graphics, 3G/HSPA modem etc) is cheaper than cheapest unibody
Macbook (13). Wondered about that too.

------
nazgulnarsil
microsoft is guilty of hubris. their corporate culture has convinced itself
that because it supplies the OS it needs to compete for your attention with
every aspect of computing. Microsoft could benefit greatly from shrinking and
gaining some focus.

~~~
DrJokepu
Agreed. I wouldn't be very surprised if we were seeing Bill Gates returning to
the cockpit again to sort things out in five years or so.

~~~
itgoon
I could see him doing it, but I don't see him actually sorting anything out.
His last years were not stellar. He did a fantastic job building the company,
but I don't think he's the right person to rebuild it.

~~~
streetstealth
There's one MS higher-up who I could see actually pulling it off: J Allard. If
the future of Windows were a tenth as innovative as the XBox division or even
Zune, MS could probably swing a turnaround like Palm is in the middle of.

In fact, I'm calling it now: Allard's going to be CEO of MSFT before 2020.
Maybe before 2015. You heard it here first.

------
frosty
you seem to be missing a very critical point in using financial projections.

Yeah, apple will keep gaining share in US but guess who will win in the
emerging markets like China, India and Brazil. Microsoft will now start
reaping rewards for its years of giving OS for free to these markets
(basically by not cracking on piracy).

In these countries, its not about coolness or design. Its about the price.

Want an example? Guess how many iPhones sold in India?

~~~
GeneralMaximus
iPhones are not sold here because they cost about $700. If they were as cheap
as they are in the US, _everyone_ would have an iPhone. In India, even the
people who don't have the resources to feed themselves own mobile phones.

And people do buy Macs here (mostly computer enthusiasts or programmers). You
can find _many_ Macs at FOSS conventions (I know, ironic).

~~~
vetinari
The iPhone is not cheap in US. Yes, you don't pay $700/€500 upfront, but you
will pay the amount through duration of the contract and by losing the option
to switch carriers during the next year or two. The cost is the same, just
hidden.

~~~
anatoli
I don't think you have an understanding of how much people make/stuff costs in
India, if you're actually comparing prices of iPhones in US with prices of
iPhones in India.

Hint: why do you think there's so much outsourcing to India?

------
froo
I think the OP is completely ignoring Microsoft's previous years financials
(strong consistent growth since before Vista and after) and instead basing his
argument on two data points (and not the whole data set) and pointing and
saying the sky is falling.

It appears that Microsoft can blame their quarterly's on the global financial
thing as that is a valid reason, when you take all other financial data points
into account. Saying it is all Vista's fault is a straw man argument, given
ALL of the data shows otherwise.

If anyone cares to look at the actual financial data, rather than making wild
claims, you would notice that Microsoft's Growth alone last year was about
half of Google's total revenue. Sure, Google is doing fantastic, but that's
not to say Microsoft is completely F-ing it up (like the Author claims when
comparing the two).

Secondly, I won't dispute the figures that Apple are outselling Microsoft in
the >$1000 market, because I don't have access to all the figures but I
personally would expect that would be the case given that is the market Apple
targets. I would suggest that if the Author wants to take a realistic view of
Microsoft's position in the computer market, he should look at TOTAL machines
sold, not just one market segment.

It would be like arguing that Ferrari dominate every other car manufacturer
worldwide because they make the most cars that are red that come from Italy...

[Disclaimer: Not a Microsoft Employee or Fanboy, just sick of propaganda]

EDIT - fixed an error with Google/Microsoft revenue/growth comparison

~~~
nwjsmith
You are wrong to call this propaganda.

The core of Gruber's argument is that Apple's market share (not Google's) is
growing quickly, whereas Microsoft's is falling.

Gruber also acknowledges that the numbers don't take into account the whole of
the PC market, and he brings up a couple of important points you need to
consider before thinking that Microsoft is making up for its losses in the
sub-$1000 PC market. Quotes:

"What is particularly alarming about Microsoft’s numbers is that revenue from
its Windows PC division suffered an even greater year-over-year revenue
decline than the company as a whole: 29 percent."

"Even given that NPD’s numbers represent only retail sales, is there any
reasonable doubt that Apple’s share of the non-retail market for $1,000+
computers is also growing?"

Also, it's misleading for you to suggest that Gruber implies that Microsoft is
"completely F-ing it up" when comparing them to Google. His 'working title'
aside, the purpose of the comparison was to demonstrate that other companies
in the industry are not falling short of projections, as Microsoft has. He is
suggesting that blaming the revenue decline on the economy isn't a strong
argument.

You use the term 'propaganda' pretty loosely. Many things written on Daring
Fireball are sarcastic and overly-dismissive when it comes to Microsoft, but
it's clear that John Gruber put a lot of thought and work into this essay. Try
to do the same with your criticism.

~~~
froo
_"Try to do the same with your criticism."_

You know, I still disagree with you but I think you're arguing from a
completely biased standpoint.

I looked through your all of your previous comments and noticed that ~85% of
them were on Apple related submissions.

So while I'm not going to blatantly call you a Fanboy, but... where there's
smoke...

As for Microsofts revenue decline, they had a bad product with Windows Vista..
they did the same thing before with Windows ME and I'll hazard a guess that
they'll probably screw up several OS's in the future.

The fact is, sometimes top tier companies make products that don't gel with
consumers.

Recent examples? Microsoft with Vista, Apple and the Apple TV, Google with
Knol...

While we're looking at company's failures, lets just ignore Apple's track
record when Jobs wasn't there shall we? I mean, its not like they've had any
bad products before </sarcasm>

Even still, Vista was released in January 07 (source: Wikipedia) and Microsoft
managed to have at least 1 full year of high growth during that time, which is
assumed to be during the "bad time" of Vista. So you could realistically argue
that this years numbers were a result of recession.

(I'd suggest that Microsoft's OS and the budget PC market is more sensitive to
financial downturns than Apple given it's marketed towards people who have
smaller incomes than your typical Apple consumer, thus people are less likely
to buy Windows based PC's when times are tough. That's just conjecture on my
part though)

Microsoft isn't on a long slow decline, it's a bump in the road, plain and
simple.

This article was nothing but propaganda (or blatant fanboyism, take your
pick).

 _"The core of Gruber's argument is that Apple's market share (not Google's)
is growing quickly, whereas Microsoft's is falling."_

He compared Google's revenue growth to Microsoft's (6th paragraph), so I
figured it was fair game to compare the two. I never compared Apple's revenue
to Microsoft's simply because I haven't bothered to look recently.

I just know these figures when I looked to verify or disprove a Google
fanboy's comment previously on HN

<http://news.ycombinator.com/item?id=671770>

~~~
jemmons
You're going to judge someone not by the merits of their arguments but by the
topics which they've chosen to argue? That is a weak, disgusting, small-minded
practice that has no place on HN. You should be ashamed.

~~~
pg
Will you guys please stop?

~~~
blasdel
I think this is the first time I've found myself downmodding _both_ flamers

------
ryanwaggoner
_Today, though, Microsoft is increasingly left only with customers whose
priority is price._

Yeah, but that's probably like 95% of people and companies. Computers may not
be commodities for the types of people who frequent HN, but they are for
almost everyone else.

~~~
thenduks
He's saying that the kind of people who frequent HN are indicators of what the
future might be like:

 _Regular people don’t think about their choice of computer platform in detail
and with passion like nerds do because, duh, they are not nerds. But nerds are
leading indicators._

~~~
ryanwaggoner
Nerds are leading indicators for some things, but not everything. Once
something has become commoditized, nerds may be leading indicators of what a
small niche will prefer, but most people will compare that commodity primarily
on price. Reversing commoditization is difficult and rare.

~~~
simonw
If nerds aren't going to be leading indicators for _computers_ , what are they
going to be indicators for?

~~~
ryanwaggoner
Are nerds the leading indicators for handheld calculators?

~~~
blasdel
Not at all: witness TI's total dominance of the graphing calculator market,
selling millions a year with _a fucking Z80_ and dogshit software for $80
each. Their 'high-end' calculators have decent software with an easy-to-use
CAS, but are crippled by their slow M68k processors, and cost $120.

~~~
krakensden
They have competitors?

------
cturner
When I buy a linux server at work, or one of those Linux Dells home machine
(not sure if they're still around - I got this end of last year), I feel like
I get a raw commodity. I wipe whatever crap the idiot manufacturer put on it,
install my OS on it with ease, and then it does what I want for the rest of
time. Server or desktop. Or both if I want. Multi-user from that moment, apt-
get takes care of my problems. When I buy a mac it's about the same. It's a
little harder to get new packages and some of the unix decisions are brainless
but it's better with drivers.

The commodity feel is not remotely the case with Windows. The manufacturer may
have left all sorts of crap over the install (toolbars and the like). I'll
need to download or even buy a bunch of stuff to get it to do stuff that for a
geek is basic (a pdf viewer and all of them stink, expandrive to be able to
mount drives effectively, virus protection in case I get compromised but this
makes my system less nice to use, putty so I can get to a real console). It
doesn't come with anything approaching an adequate text editor or basic
development tools. If it's a reinstall on a Dell the driver situation is very
painful, and product activation might require me to make phone calls.

------
kgelner
This new quote from Gruber underlies exactly where the decline really matters
most:

"It’s not that they need those customers, but that they used to drive the
industry’s technical agenda, but now they don’t."

Where is Microsoft really driving anything at this point? It's not on the
desktop. It's not in the mobile space. It's not even really in the enterprise.

The whole video tag argument in HTML 4 for example, is really between Apple
and Mozilla. Microsoft is not really even a consideration.

If Microsoft is not really driving anything anymore, then they are just
another company trying to comply with standards - and that means the
inevitable (although slow) end of dominance they once enjoyed. For the
computer industry, this is a good thing...

------
edw519
Has OP ever been in one of the 6 million businesses is the U.S. lately? If he
had he probably would have noticed that over 90% of the desktops running
Windows. Many of them with ie locked down. With the server rooms full of
Microsoft products. And those responsible for procurement unaware of much
else.

Microsoft may be in a long, slow decline in the consumer marketplace, but
you'd never know from those 100 million desktops.

Do you think that maybe Microsoft was smart enough to foresee this so that's
why they're so locked in in the enterprise?

~~~
mechanical_fish
I also see a lot of office furniture when I look inside a business. But nobody
cares much about office furniture. For most of the market, it's a boring
commodity that is bought by professional office managers who care a lot about
the price. It lasts a relatively long time and doesn't change very often.

It's also an intensely cyclical business, which is no doubt a big reason why
Microsoft's financials are so screwed.

The moral of this story is that the notion of Apple vs Microsoft is more stale
than it has ever been. They aren't even in the same _industry_ anymore. You
could imagine investing in both of them at once and calling it
_diversification_.

~~~
netsp
Completely true about apple vs msft.

I'm not sure I agree about the furniture implication. Maybe practically nobody
cares about furniture, but the suppliers do. If they sell 90% of all office
furniture at a great margin, they are a successful company. Commodity implies
close to perfect competitive markets. That is not the case here.

Anyway people buying servers care. They may not be cutting edge, but they care
what they use.

~~~
mechanical_fish
_I'm not sure I agree about the furniture implication._

Frankly, I'm not sure I agree either. But I decided to write it down anyway
and see how it looked on the screen.

------
Mark2000
Could someone PLEEEEAAASE tell me what makes 7 better than Vista? Please??!!!
The taskbar is changed to icons and there is a preview for each one. That's
really about it. The interface is still a mess with menubars hidden sometimes
and not others, there are still several hundred control panels, and the system
is still based on DLLs and a registry. Network navigation is a total joke.
Built in media viewing is not even a joke. And, yes, I've used 7 quite a bit
for my gaming needs so I know what a turd it still is.

It's a fundamentally confusing, unsafe, and bloated OS with the slightest
amount of polish added.

------
hcschmid
Seems to me, whatever problems Microsoft has, they'd do a lot better to not
give Apple an attention or comment. They should stick to the ignoring Apple.
Answer questions about "We do not comment on competitors or their products".

It certainly won't fix their products, but it would reduce the chances of them
putting their foot in their mouth, and that might be a starting point for
turning their image, then, their products around.

------
tybris
The legacy will make sure Microsoft is still the #1 Software company in 10
years and Windows the #1 Operating System.

~~~
olefoo
This is what IBM kept telling themselves in 1986.

The installed base of a legacy platform is not a guarantee of the health of
the platform owner. Other companies that made this mistake; DEC, SUN, AOL.

In ecological terms, MSFT has overshot the carrying capacity of it's niche,
and has not been able to exploit or create new habitat as an operating systems
company.

~~~
tybris
Are you referring to "the IBM"? The company with a Market Cap of $150 billion,
larger than Google, Apple, Cisco and every other IT company except Microsoft?
There's a big gap between what is true on the web and what is true in reality.
IBM is very much alive and kicking, still building mainframes and whatnot.

~~~
olefoo
Yes, after they lost something like a third of their market cap and shrank,
and reorganized and clawed their way back.

"""Gerstner quarterbacked one of history's most dramatic corporate
turnarounds. For those who follow business stories like football games, his
tale of the rise, fall and rise of IBM might be the ultimate slow-motion
replay. He became IBM's CEO in 1993, when the gargantuan company was near
collapse."""

From one of the reviews here [http://www.amazon.com/Elephants-Dance-Inside-
Historic-Turnar...](http://www.amazon.com/Elephants-Dance-Inside-Historic-
Turnaround/dp/0060523794)

------
csomar
windows will remain dominant in OS shares at least for the next 15 or 20
years; after that something new need to be made.

Like the jump from Dos to win 3.1 or win 3.1 to Win95; Microsoft needs to make
something more spectacular than an upgrade to 7; something more innovative and
productive.

if it does, than there are another 30 years for msft life.

~~~
Mark2000
Srsly? 15-20 year? I think Windows will be dead in 7-10 years. It shouldn't
still be alive today. Windows is an OS for physical media. It wasn't built for
networking and security. Windows'core needs to be scraped and MS needs to come
up with something fresh from the bottom up.

Actually, they don't need to do anything. Others have already. MS just needs
to bow out. You can't be on top forever.

------
budman
This guy is a tool. I stopped reading once I read this blanket assumptive
statement: _People who love computers overwhelmingly prefer to use a Mac
today_

Really? Did he go door to door? Because he missed my house and MANY other
people I know..

~~~
kgelner
Go to any modern technical conference (except the Microsoft specific ones of
course) and you can see the truth in what he is saying.

~~~
atacrawl
Better yet, go to an airport. Every time I go to the airport, any airport, I
see a higher percentage of Apple logos staring back at me than I did the
previous visit. It's kind of amazing. It wasn't that long ago that you almost
never saw any Apple laptops. Now they're everywhere.

